Incremental cost-effectiveness ratio

The incremental cost-effectiveness ratio (ICER) is a statistic used in cost-effectiveness analysis to summarise the cost-effectiveness of a health care intervention. It is defined by the difference in cost between two possible interventions, divided by the difference in their effect. It represents the average incremental cost associated with 1 additional unit of the measure of effect. The ICER can be estimated as:

${\displaystyle ICER={\frac {(C_{1}-C_{0})}{(E_{1}-E_{0})}}}$,

where ${\textstyle C_{1}}$ and ${\displaystyle E_{1}}$ are the cost and effect in the intervention group and where ${\textstyle C_{0}}$ and ${\textstyle E_{0}}$ are the cost and effect in the control care group.^[1] Costs are usually described in monetary units, while effects can be measured in terms of health status or another outcome of interest. A common application of the ICER is in cost-utility analysis, in which case the ICER is synonymous with the cost per quality-adjusted life year (QALY) gained.