Cost-utility analysis

Cost-utility analysis (CUA) is a specific type of cost-effectiveness analysis where the outcome is measured in terms of preference-based valuations of health, most commonly quality-adjusted life years (QALYs). CUA compares two or more alternative interventions by estimating the (incremental) cost per QALY gained. By using QALYs, CUA allows for comparisons of health outcomes across different disease areas, making it particularly valuable for broad healthcare resource allocation decisions. Health technology assessment (HTA) bodies frequently require CUA as part of its decision-making process.

The National Institute of Health and Care Excellence (NICE), the HTA body in England, specifically uses the QALY as its primary measure of health outcome and has a generally accepted willingness-to-pay threshold per QALY gained (often cited as £20,000 to £30,000). For example, if a cost-utility analysis showed that an intervention produced 0.5 additional QALYs and was associated with additional costs of no more than £10,000, it would be considered cost-effective under NICE’s threshold.