Incremental cost-effectiveness ratio and incremental net-health benefit: two sides of the same coin

Abstract

In recent years, an alternative framework for cost-effectiveness analyses has been growing in popularity. Instead of the incremental cost-effectiveness ratio for which statistical inference is often difficult, the incremental net-health benefit (INHB), a linear transformation of incremental costs and effectiveness, has been utilized. The linear structure of this statistic allows easy computation and interpretation of confidence intervals, hypothesis tests and acceptability curves. It is often difficult, however, to switch decision-making procedures without first verifying the appropriateness of the new methods. In this paper, we demonstrate the decision-making similarities between the INHB and the incremental cost-effectiveness ratio and describe how the INHB can be used to clarify inference of the incremental cost-effectiveness ratio. We also describe the two statistics in terms of the DeltaE-DeltaC plane, thus allowing both a mathematical and graphical comparison of these similarities. We conclude with a general discussion of cost-effectiveness analyses and advocate Bayesian, rather than frequentist inference as the more intuitive and powerful decision-making framework.

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