Median-Based Incremental Cost-Effectiveness Ratio (ICER)

Abstract

Cost-effectiveness analysis (CEA) is a type of economic evaluation that examines the costs and health outcomes of alternative strategies and has been extensively applied in health sciences. The incremental cost-effectiveness ratio (ICER), which represents the additional cost of one unit of outcome gained by one strategy compared with another, has become a popular methodology in CEA. Despite its popularity, limited attention has been paid to summary measures other than the mean for summarizing cost as well as effectiveness in the context of CEA. Although some apparent advantages of other central tendency measures such as median for cost data that are often highly skewed are well understood, thus far, the median has rarely been considered in the ICER. In this paper, we propose the median-based ICER, along with inferential procedures, and suggest that mean and median-based ICERs be considered together as complementary tools in CEA for informed decision making, acknowledging the pros and cons of each. If the mean and median-based CEAs are concordant, we may feel reasonably confident about the cost-effectiveness of an intervention, but if they provide different results, our confidence may need to be adjusted accordingly, pending further evidence.

Keywords: cost-effectiveness analysis; cost-effectiveness plane; mean cost; median cost.

Reproduced with permission. Obenchain RL. J Biopharmaceut Stat. © 1999.

Figure 1. Cost-effectiveness plane using the mean (upper) vs. the median (lower): Schizophrenia study

The solid line indicates the point estimate, and the broken line indicates a 95% confidence interval for the ICER (connected by arc), obtained from the bootstrap-wedge method. Note that the scale is different on the y-axis.

Figure 2. Cost-effectiveness plane using the mean (upper) vs. the median (lower): Prostate cancer study

The solid line indicates the point estimate and the broken line indicate a 95% confidence interval for the ICER (connected by arc), obtained from the bootstrap-wedge method.

Figure 3. Cost-effectiveness plane using the mean (upper) vs. the median (lower): Simulated data

The solid line indicates the point estimate and the broken line indicate a 95% confidence interval for the ICER (connected by arc), obtained from the bootstrap-percentile method. Note that the scale is different on the y-axis.