Signature
NMB_j = lambda * E_j - C_j
| Inputs | Definition | Unit |
|---|---|---|
lambda | Monetary value placed on one unit of health effect | currency per unit of health effect, for example £ per QALY |
E_j | Expected health effect of option j | health-outcome unit per defined population or person, for example QALYs |
C_j | Expected total relevant cost of option j | currency per defined population or person |
NMB_j | Expected health effect of option j valued at lambda, minus its expected cost | currency per defined population or person |
|---|
Function
Net monetary benefit function
Values an option's expected health effect in money at a stated cost-effectiveness threshold and subtracts its expected cost, placing health and cost on one monetary scale.
Try this function
Implementations
Excel
Calculate option-level NMB
Excel values expected health at the threshold and subtracts expected cost. The threshold sits in one named cell so that results can be recalculated at other values.
=Threshold*ExpectedEffect-ExpectedCost
Assumptions
Stated threshold
The value of lambda is stated with its currency, price year, outcome unit and source, because NMB and the ranking of options depend on it. The NICE manual asks for net health benefits at £25,000 and £35,000 per QALY and allows net monetary benefits to be shown alongside.
Common analytical basis for every option
Every option's NMB uses the same population, perspective, time horizon, price basis and discounting, and uses the option's own expected totals rather than values incremental to another option.
Worked examples
New intervention at £20,000 per QALY
A new intervention has an expected cost of £14,000 and 4.80 expected QALYs per patient. At an illustrative threshold of £20,000 per QALY its health is valued at £96,000, so its NMB is £82,000 per patient. Current care, at £10,000 and 4.50 QALYs, has an NMB of £80,000 at the same threshold.
lambda = 20000; E_j = 4.80; C_j = 14000; NMB_j = 82000
Common errors
Using incremental values in option-level NMB
Calculating NMB_j from incremental cost and effect against another option gives incremental net benefit, not the option's own NMB, and mixes the two quantities when options are ranked.
Reporting NMB without the threshold
An NMB figure has no meaning without the stated lambda, and values calculated at different thresholds, populations or price bases cannot be compared.
Sources
NICE manual on net benefit
National Institute for Health and Care Excellence. NICE technology appraisal and highly specialised technologies guidance: the manual (PMG36). Published 31 January 2022, last updated 31 March 2026. Chapter 4 Economic evaluation, section 4.2.16 (net health benefits at £25,000 and £35,000 per QALY; net monetary benefits may be shown alongside ICERs and net health benefits).
Decision modelling textbook on net benefit
Briggs A, Claxton K, Sculpher M. Decision Modelling for Health Economic Evaluation. Oxford: Oxford University Press; 2006.
Canonical Identity
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