Economic evaluations are how interventions such as pharmacological treatments or diagnostic tests are compared to determine the one that is the most efficient use of resources. They measure both costs and benefit. Costs are measured because they indicate the opportunity cost, which is the loss in benefit that could otherwise be gained by using those resources elsewhere.
Cost-effectiveness analysis (CEA) is the most common type of economic evaluation. Effectiveness is the measure of benefit and can be expressed in terms of natural units e.g., cases detected, quantity of life years, and/or quality adjusted life-years (QALYs). Cost-utility analysis (CUA) is the term often used when QALYs are measured.
The incremental cost-effectiveness ratio (ICER) is the most common way of estimating efficiency. It is the difference in cost between one intervention and the next best alternative divided by the difference in their effect: the lower the ICER the more efficient. ICER thresholds are used as decision making e.g., NICE generally approves interventions ≤ £30,000 per QALY.
A decision analytic model (DAM) is a mathematical framework to integrate assumptions and data, often from systematic reviews, on the efficacy, safety, quality of life and cost of interventions to estimate incremental costs and effectiveness, usually over the lifetime of patients.
Our team of health economists, reviewers, and information specialists have expertise in the design of DAMs for cost effectiveness analysis and the performance of systematic reviews and the conduct of various types of meta-analysis using both frequentist and Bayesian methods. We also have over 10 years’ experience of critically appraising and developing models as an Evidence Review Group in Technology Appraisals for NICE. KSR has also carried out CEAs in diverse areas such as cystic fibrosis, benign prostatic enlargement, cardiovascular disease, anaphylaxis, chronic obstructive pulmonary disease, and constipation.