Cost-utility analysis is a form of economic analysis used to guide procurement decisions, especially health technology assessment (HTA).

Description

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The cost is measured in monetary units such as pounds sterling or US dollars, and the benefit of the item being considered needs to be expressed in a quantitative form. Unlike cost-benefit analysis, this does not have to be in monetary terms. In HTAs it is usually expressed in quality-adjusted life years (QALYs). A threshold value of so many pounds (or dollars) per QALY is set.

As of January 2005, a figure of £30,000 per QALY is the normal British threshold value. Thus, any health intervention which has an incremental cost of more than £30,000 per additional QALY gained would normally be rejected and any intervention which has an incremental cost of less than or equal to £30,000 per extra QALY gained would be accepted as cost-effective.

Utility