Signature
ICER_i = (C_i - C_(i-1)) / (E_i - E_(i-1))
| Inputs | Definition | Unit |
|---|---|---|
C_i | Total relevant cost of alternative i | currency per defined population or person |
C_(i-1) | Total relevant cost of the next less effective non-dominated alternative | the same currency basis as C_i |
E_i | Expected outcome for alternative i | the shared natural outcome measure |
E_(i-1) | Expected outcome for the next less effective non-dominated alternative | the same natural outcome measure as E_i |
ICER_i | Additional cost per additional unit of effect for alternative i relative to the next less effective alternative | currency per outcome unit |
|---|
Function
Fully incremental cost-effectiveness function
Maps an effectiveness-ordered set of non-dominated alternatives to sequential incremental cost-effectiveness ratios.
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Implementations
Excel
Calculate a sequential ICER
Excel divides sequential incremental cost by sequential incremental effect using named ranges.
=(CurrentCost-PreviousCost)/(CurrentEffect-PreviousEffect)
Assumptions
Ordered by effectiveness
Alternatives are ordered from least to most effective before sequential comparisons are calculated.
Common outcome measure
Every alternative uses the same natural outcome definition and unit.
Strict dominance removed
Any alternative that costs more and produces no additional effect than another alternative is removed before calculation.
Extended dominance addressed
Alternatives subject to extended dominance are removed and sequential ICERs are recalculated.
Positive incremental effect
The denominator E_i minus E_(i-1) is greater than zero for every calculated sequential ICER.
Worked examples
Sequential comparison of three alternatives
Current care costs £10,000 and produces 8.0 life-years. Intervention A costs £12,500 and produces 8.5 life-years. Intervention B costs £16,000 and produces 8.8 life-years. The sequential ICERs are £5,000 and approximately £11,667 per life-year gained.
ICER_A = (12500-10000)/(8.5-8.0) = 5000; ICER_B = (16000-12500)/(8.8-8.5) = 11666.67
Common errors
Comparing every alternative with a common baseline
Using the same baseline for every ratio can retain dominated strategies and fails to construct the cost-effectiveness frontier.
Sources
NICE manual for cost-effectiveness analysis
NICE. Health technology evaluations: the manual. Section 4.6 Economic evaluation.
Canonical Identity
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