Cost-utility analysis

Cost-utility analysis is a form of economic analysis used to guide procurement decisions, especially health technology assessment (HTA). The cost is measured in monetary units, such as British pounds 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.