The threshold represents the opportunity cost of health foregone when deciding to reimburse/fund a new technology. The underlying economic principle is that given a fixed budget a decision to reimburse a new healthcare intervention implies that funds will not be available to fund some other intervention which would deliver health benefits, and that these health benefits would be obtained at the ‘marginal’ rate represented by the threshold. UK NICE Guidance for Technology Appraisals states that interventions with an incremental cost-effectiveness ratio (ICER) of less than £20,000 per QALY gained will generally be accepted as cost-effective. This threshold value has emerged empirically through experience of decision-making, but is not very well supported by theoretical research. As the magnitude of the ICER increases, or in some cases where the ICER is near the threshold as its uncertainty increases (wide confidence intervals), it becomes more likely that corresponding intervention will fail to be reimbursed.

How to cite: Cost-Effectiveness Threshold [online]. (2016). York; York Health Economics Consortium; 2016.

« Back to Glossary Index