A clinician's guide to correct cost-effectiveness analysis: Think incremental not average

Research output: Contribution to journalReview articlepeer-review

40 Scopus citations


Objective: To explain how to correctly report the results from a cost-effectiveness analysis (CEA). Methods: Results were used from a hypothetical clinical trial to illustrate how different ways of reporting economic results affect both presentation of findings and formulation of conclusions. To provide context, we reviewed some high-profile exchanges in the scientific literature. Results: The critical issue with which decision makers must grapple involves the trade-offs introduced by a new treatment or intervention. Specifically, are decision makers willing to pay the additional cost for the additional outcomes? This question cannot be considered without estimates of the additional cost and additional outcomes. Correct cost-effectiveness measures, such as the incremental cost-effectiveness ratio or the incremental net benefit, address this issue. Conclusions: As decision makers face the challenge of balancing increasing health care demand with cost containment, it will be crucial to identify cost-effective ways of providing care. Health care providers and other decision makers should not be misled by the results of improperly reported CEAs. Decisions around adoption of pharmaceuticals or implementation of new programs or interventions may be affected by which cost-effectiveness summary measure is reported. Thus consumers of CEA must have a basic understanding of why different methods give different results, and how the results should be interpreted.

Original languageEnglish (US)
Pages (from-to)267-274
Number of pages8
JournalCanadian Journal of Psychiatry
Issue number4
StatePublished - Apr 2008
Externally publishedYes


  • Cost-effectiveness analysis
  • Incremental cost-effectiveness ratio
  • Mental health economics
  • Net benefit regression

ASJC Scopus subject areas

  • Psychiatry and Mental health


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