Health Economics: ICER and Cost-Effectiveness
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Questions and Answers

What does the Incremental Cost-effectiveness Ratio (ICER) measure?

  • The difference in health outcomes between two interventions
  • The total cost of an intervention divided by its effectiveness
  • The difference in costs divided by the difference in health outcomes (correct)
  • The value of QALYs gained from an intervention

    • What is the potential consequence of setting the cost-effectiveness threshold too high?

  • Valuable interventions will not be adopted.
  • It will ensure all interventions are adopted universally.
  • It can lead to underfunding of healthcare services.
  • It may waste NHS resources on ineffective treatments. (correct)

    • Why is determining an acceptable maximum value for ICER considered controversial?

  • Because it solely depends on government funding levels.
  • Because it is easy to quantify health outcomes reliably.
  • Because all countries agree on a standard threshold.
  • Due to the many factors influencing health outcomes and budget constraints. (correct)

    • How can countries establish a baseline value for a QALY?

    <p>By calculating the cost-effectiveness of treatments such as coronary bypass grafting.</p> Signup and view all the answers

    If a government bases its health spending threshold on per capita GDP, what does this imply?

    <p>Each individual could spend their fair share on health in one year.</p> Signup and view all the answers

    Study Notes

    Incremental Cost-Effectiveness Ratio (ICER)

    • ICER is the difference in costs between alternatives divided by the difference in outcomes measured
    • If the ICER of a new intervention is less than the acceptable cost-effectiveness threshold, the treatment should be adopted

    Cost-Effectiveness Threshold

    • The cost-effectiveness threshold is the value a decision-maker is willing to pay for a unit of health gained (e.g., QALY or LYG)
    • A high threshold leads to inefficient NHS resource use
    • A low threshold may prevent adoption of valuable interventions

    Factors Affecting ICER Threshold

    • The condition and population receiving the intervention
    • The intervention's innovation
    • Uncertainty in ICER calculations (data source issues)
    • Defining an acceptable threshold is complex and debatable

    Valuing a QALY or LYG

    • Determining the worth of an extra QALY or LYG is a value judgment
    • Public and patient willingness to pay for avoiding unfavorable outcomes can inform judgments
    • Setting thresholds: benchmarks from interventions (e.g., coronary bypass grafting) can establish a baseline
    • Some countries use a per capita GDP threshold for cost-effectiveness

    Per Capita GDP as a Threshold

    • Per capita GDP represents a fair share of national wealth
    • It could act as a maximum expenditure for health gains per individual per year

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    Description

    Explore the concepts of Incremental Cost-Effectiveness Ratio (ICER) and cost-effectiveness thresholds in health economics. This quiz delves into the factors that influence ICER calculations and the valuation of health outcomes like Quality-Adjusted Life Years (QALY) and Life Years Gained (LYG). Understand how these concepts impact decision-making in healthcare interventions.

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