Health-Economic Evaluation Types

A full economic evaluation compares two or more options on both their costs and their consequences. The four types differ only in how the outcome is measured. Cost-minimisation (CMA) assumes outcomes are equal → just pick the cheapest. Cost-effectiveness (CEA) measures outcomes in natural units (cost per life saved, per mmHg). Cost-utility (CUA) uses the QALY, so you can compare across diseases. Cost-benefit (CBA) puts costs and outcomes into money. The headline number is usually the ICER = Δcost ÷ Δeffect.

The same cost data can drive any of four analyses; the outcome unit is what changes. Only cost-utility (the QALY) gives a common currency that lets a cancer drug be judged against a hip replacement. CEA can only rank options sharing the same natural unit; CMA is valid only when outcomes truly are equivalent.

Find the outcome unit first — it tells you the analysis type and what comparisons are legitimate. Then read the ICER: the extra cost per extra unit of benefit. A low ICER (well under the threshold) signals good value. The cost-effectiveness acceptability curve (CEAC) plots the probability an option is cost-effective across a range of willingness-to-pay thresholds — it carries the decision uncertainty.

EM interventions compete with everything else the NHS funds. Knowing the evaluation type tells you whether a “cost-effective” claim is comparable to others — and whether the chosen ICER threshold (a value judgement, not a fact) actually supports adopting the intervention in your department.

• ICER = Δcost ÷ Δeffect (cost per extra QALY in CUA)
• QALY = 1 year in full health; lets CUA compare across diseases
• CEAC = probability of cost-effectiveness vs willingness-to-pay

NICE cost-per-QALY threshold — NICE has historically judged interventions against a willingness-to-pay band of roughly £20,000–£30,000 per QALY (a cost-utility framing). An ICER below this is usually deemed good value; above it, increasingly hard to justify without extra weighting (e.g. end-of-life or severity modifiers). The threshold is a value judgement, not a measured fact — it has been contested as too high or too low, and was set to rise (to ~£25,000–£35,000) from April 2026. Treat any single figure as a broad guide.

• Naming the wrong analysis type for the outcome unit described (CEA vs CUA vs CMA).
• Forgetting the QALY bakes in value judgements about quality-of-life weights.
• Treating the ICER threshold as a hard scientific cut-off rather than a contested policy choice.