title: Cost-effectiveness thresholds in health care: a bookshelf guide to their meaning and use.
abstract: There is misunderstanding about both the meaning and the role of cost-effectiveness thresholds in policy decision making. This article dissects the main issues by use of a bookshelf metaphor. Its main conclusions are as follows: it must be possible to compare interventions in terms of their impact on a common measure of health; mere effectiveness is not a persuasive case for inclusion in public insurance plans; public health advocates need to address issues of relative effectiveness; a 'first best' benchmark or threshold ratio of health gain to expenditure identifies the least effective intervention that should be included in a public insurance plan; the reciprocal of this ratio - the 'first best' cost-effectiveness threshold - will rise or fall as the health budget rises or falls (ceteris paribus); setting thresholds too high or too low costs lives; failure to set any cost-effectiveness threshold at all also involves avertable deaths and morbidity; the threshold cannot be set independently of the health budget; the threshold can be approached from either the demand side or the supply side - the two are equivalent only in a health-maximising equilibrium; the supply-side approach generates an estimate of a 'second best' cost-effectiveness threshold that is higher than the 'first best'; the second best threshold is the one generally to be preferred in decisions about adding or subtracting interventions in an established public insurance package; multiple thresholds are implied by systems having distinct and separable health budgets; disinvestment involves eliminating effective technologies from the insured bundle; differential weighting of beneficiaries' health gains may affect the threshold; anonymity and identity are factors that may affect the interpretation of the threshold; the true opportunity cost of health care in a community, where the effectiveness of interventions is determined by their impact on health, is not to be measured in money - but in health itself.
authors.affiliation: 1Institute of Health Policy Management and Evaluation,University of Toronto,Toronto,Canada.
authors.forename: Anthony J
authors.initials: AJ
authors.lastname: Culyer
mesh_terms: D003362:Cost-Benefit Analysis; D003657:Decision Making; D003695:Delivery of Health Care / Q000191:economics*; D005102:Health Expenditures; D006291:Health Policy; D006297:Health Services Accessibility; D006801:Humans; D007343:Insurance Carriers; D009313:National Health Programs / Q000191:economics*; D011634:Public Health