Cost-Effectiveness Plane

The cost-effectiveness plane displays the joint difference in expected cost and expected health outcome between an intervention and its comparator. The sections below explain how a comparison is placed on the plane, what each quadrant means, how a threshold line supports interpretation, and how probabilistic results reveal decision uncertainty.

The plane must be read as a comparison rather than a picture of an intervention in isolation. Every plotted point depends on the chosen comparator, subtraction direction, outcome measure, perspective, time horizon and price basis.

What the cost-effectiveness plane shows

The horizontal axis represents incremental effectiveness and the vertical axis represents incremental cost. The origin represents no difference between the intervention and comparator in either cost or health outcome.

A point’s horizontal position shows whether the intervention produces more or less health than its comparator. Its vertical position shows whether the intervention costs more or less.

ΔE = Effect of intervention − Effect of comparator

ΔC = Cost of intervention − Cost of comparator

• A point to the right of the vertical axis has positive incremental effectiveness.
• A point to the left of the vertical axis has negative incremental effectiveness.
• A point above the horizontal axis has positive incremental cost.
• A point below the horizontal axis has negative incremental cost.
• A point at the origin indicates equal expected cost and equal expected effectiveness.

What the four quadrants mean

Each quadrant represents a different combination of incremental cost and incremental effectiveness. The quadrant should be identified before an ICER or threshold comparison is interpreted.

Two quadrants represent clear dominance conclusions, while two involve trade-offs. This is why the numerical sign of an ICER cannot determine the conclusion by itself.

Quadrant	Cost and health result	Interpretation
Northeast	More costly and more effective	Value additional health against additional cost
Southeast	Less costly and more effective	Intervention dominates
Southwest	Less costly and less effective	Value savings against health forgone
Northwest	More costly and less effective	Intervention is dominated

Points lying exactly on an axis require the same underlying logic. Equal cost with greater effectiveness or equal effectiveness with lower cost still favours the intervention, while the reverse comparison favours the comparator.

A worked expected-value example

Suppose a new treatment costs £12,500 per person and produces 3.4 QALYs, while current care costs £10,000 and produces 3.0 QALYs. The comparison uses the new treatment minus current care.

The new treatment costs £2,500 more and produces 0.4 additional QALYs. It is therefore plotted at the coordinate (0.4 QALYs, £2,500) in the northeast quadrant.

ΔC = £12,500 − £10,000 = £2,500

ΔE = 3.4 − 3.0 = 0.4 QALYs

ICER = £2,500 ÷ 0.4 QALYs = £6,250 per QALY

• The example uses synthetic values and does not describe a real treatment or reimbursement decision.
• The northeast position indicates a cost-versus-health trade-off.
• The quadrant alone does not determine whether the additional health is worth the additional cost.
• A relevant cost-effectiveness threshold or net-benefit calculation is needed to interpret the trade-off.

How the threshold line divides the plane

A threshold line shows combinations of incremental cost and effectiveness that produce zero incremental net monetary benefit. Its slope equals the cost-effectiveness threshold when incremental effectiveness is on the horizontal axis and incremental cost is on the vertical axis.

Points below the threshold line have positive incremental net monetary benefit and favour the intervention on cost-effectiveness grounds. Points above the line have negative incremental net monetary benefit and favour the comparator.

Threshold line: ΔC = λ × ΔE

INMB = (λ × ΔE) − ΔC

• A point on the threshold line represents a tie under the stated decision rule.
• A point below the threshold line produces positive INMB.
• A point above the threshold line produces negative INMB.
• Changing the threshold rotates the line around the origin.
• A higher positive threshold makes the line steeper because more cost is accepted for each additional unit of health.

Why negative ICERs are ambiguous

An ICER is negative whenever incremental cost and incremental effectiveness have opposite signs. This occurs in both the southeast and northwest quadrants, even though those quadrants have opposing interpretations.

In the southeast quadrant, the intervention is less costly and more effective and therefore dominates. In the northwest quadrant, the intervention is more costly and less effective and is therefore dominated.

• A southeast point produces a negative ICER with a favourable dominance conclusion.
• A northwest point produces a negative ICER with an unfavourable dominance conclusion.
• A negative ICER should not be compared mechanically with a positive threshold.
• Incremental cost and incremental effectiveness should always be reported alongside the ratio.
• Net-benefit methods provide a consistent interpretation across all four quadrants.

How the southwest trade-off is interpreted

A southwest point represents an intervention that is less costly but also less effective than its comparator. The decision requires judging whether the cost savings are sufficient to justify the health forgone.

The threshold line or incremental net benefit can make this trade-off explicit. A southwest point below the threshold line favours the intervention, while a point above it favours the comparator.

• The southwest quadrant does not automatically favour the cheaper intervention.
• The health forgone must be valued using the relevant threshold.
• The direction of the comparator matters because reversing the comparison moves the point to the opposite quadrant.
• Decision-makers should report the savings, health loss and threshold rather than describing only the ratio.

How one expected point differs from probabilistic scatter

A base-case plane commonly displays one point representing expected incremental cost and expected incremental effectiveness. That point summarises the comparison but does not show uncertainty around the estimates.

Probabilistic sensitivity analysis produces many simulated pairs of incremental cost and effectiveness. Plotting those pairs as a scatter cloud shows how parameter uncertainty spreads the comparison across quadrants and across the threshold line.

• The expected-value point shows the average incremental cost and average incremental effectiveness.
• Each probabilistic point represents one internally consistent model simulation.
• The proportion of points in each quadrant describes uncertainty in the cost-and-effect combination.
• The proportion below a threshold line relates to the probability of cost-effectiveness at that threshold.
• The scatter cloud should not replace the expected-net-benefit decision rule.

What confidence regions add

A confidence ellipse, credible region or other uncertainty contour can summarise the joint distribution of incremental cost and effectiveness. It helps readers see the direction, scale and correlation of uncertainty without relying only on a dense cloud of simulation points.

The region’s interpretation depends on the statistical method used. It should be labelled accurately and should not be described as a confidence interval around the ICER unless that is genuinely what the method estimates.

• A confidence region reflects frequentist uncertainty under its stated assumptions.
• A credible region reflects a Bayesian posterior distribution.
• A region crossing several quadrants indicates uncertainty about the underlying cost-and-effect pattern.
• A region crossing the threshold line indicates uncertainty about the cost-effectiveness conclusion.
• The method and probability level used to construct the region should be reported.

How the plane relates to the CEAC

A cost-effectiveness acceptability curve summarises the probability that an alternative is cost-effective across a range of thresholds. It converts the relationship between simulated points and threshold lines into a probability curve.

The plane and CEAC therefore communicate related but different information. The plane preserves the joint cost-and-effect distribution, while the CEAC focuses on decision uncertainty across thresholds.

• The cost-effectiveness plane shows where incremental cost-and-effect pairs occur.
• The CEAC shows the probability of cost-effectiveness at different thresholds.
• The plane reveals quadrant patterns that are not visible in the CEAC.
• The CEAC does not show the magnitude of net benefit.
• Expected net benefit, rather than probability alone, should identify the preferred option.

How the plane is used with several alternatives

A standard cost-effectiveness plane plots incremental comparisons relative to a defined comparator. When several mutually exclusive alternatives exist, separate points against one common baseline do not establish the efficient sequence among the options.

Fully incremental analysis is needed to identify strict dominance, extended dominance and the cost-effectiveness frontier. The final sequential comparisons can then be shown on the plane or interpreted with expected net benefit.

• A common-baseline scatter does not replace fully incremental analysis.
• Strictly dominated options should be removed before final sequential ICERs are calculated.
• Extendedly dominated options should be removed before the final frontier is interpreted.
• Adding or removing an alternative can change the relevant comparisons.
• Every plotted comparison should state its comparator explicitly.

How to create the plane in Excel

Excel can create a cost-effectiveness plane using an XY scatter chart. Incremental effectiveness belongs on the horizontal axis and incremental cost belongs on the vertical axis.

The worksheet should preserve the underlying intervention and comparator values as well as the calculated increments. Axis titles and units should remain visible so the chart cannot be mistaken for an unlabeled clinical or financial plot.

1. Calculate incremental cost with =InterventionCost-ComparatorCost.
2. Calculate incremental effectiveness with =InterventionEffect-ComparatorEffect.
3. Insert an XY scatter chart using incremental effectiveness as X and incremental cost as Y.
4. Set both axes to cross at zero.
5. Add axis titles with the health unit, currency and price year.
6. Add the expected-value point as a clearly labelled series.
7. Add probabilistic simulation points as a separate series when uncertainty is being shown.
8. Add the threshold line using two or more values satisfying ΔC=λ*ΔE.
9. State the threshold and units in the legend or caption.
10. Use direct labels or shapes as well as colour so quadrant meaning remains accessible.

Common mistakes and safeguards

Cost-effectiveness-plane errors often arise from reversing axes, mixing subtraction directions or interpreting the ICER before identifying the quadrant. These mistakes can reverse the apparent decision or produce a visually plausible but conceptually incorrect chart.

The safeguard is to define both axes and calculate every plotted pair consistently. The comparator, units, threshold and uncertainty method should remain visible.

• Placing incremental cost on the horizontal axis reverses the standard orientation.
• Reversing only one subtraction changes the quadrant and invalidates the interpretation.
• Comparing costs and effects from different populations or time horizons produces an invalid point.
• Treating every negative ICER as favourable confuses dominance with being dominated.
• Omitting the origin makes quadrant interpretation difficult.
• Drawing a threshold line without reporting its value and units makes the decision boundary uninterpretable.
• Plotting simulation-specific ICERs instead of paired costs and effects discards the joint uncertainty structure.
• Selecting the option with the highest probability of cost-effectiveness can differ from selecting the option with the greatest expected net benefit.
• Treating the plane as an affordability analysis confuses per-person cost-effectiveness with total budget impact.

What should be reported

A transparent cost-effectiveness plane should allow readers to reconstruct the plotted comparison and understand what each visual element represents. A chart without the underlying values and decision context is not sufficient.

The following information makes the figure auditable and prevents unsupported interpretation:

• Report the intervention and comparator for every plotted comparison.
• Report the population, perspective, time horizon and outcome measure.
• Report expected costs and expected health outcomes.
• Report incremental cost and incremental effectiveness with a consistent subtraction direction.
• Label both axes with complete units.
• Report the cost-effectiveness threshold and its source when a threshold line is shown.
• Identify the expected-value point separately from probabilistic simulation draws.
• Report the uncertainty method and number of simulations when applicable.
• Report the proportion of simulations by quadrant when that result is used.
• Report expected net benefit separately from probability of cost-effectiveness.
• Report budget impact and wider HTA considerations separately from the plane.