Using Cost-Effectiveness Evidence to Inform Decisions as to which Health Services to Provide

Abstract-This article focuses on three challenges concerning the use of cost-effectiveness thresholds to inform decision making regarding which services a third-party payer will fund. First, how is the appropriate cost-effectiveness threshold or threshold range to be determined or, indeed, should there be a single threshold or multiple thresholds? Second, how can the valuation of health benefits be refined to better capture the value of treatments to patients and to the economy as a whole? Third, how is the tension between cost-effectiveness and the affordability and sustainability of health services to be managed?It concludes that whatever other factors are considered in addition to cost-effectiveness, and whether the decision-making process is more or less deliberative, cost-effectiveness thresholds are important. Though there is a range of sources for identifying appropriate thresholds, using the opportunity cost in terms of the health benefits from displaced activities will minimize the problem of cost-effective interventions not being affordable and will facilitate the efficient use of scarce resources. Finally, although experience using weighted quality-adjusted life years (QALYs) is currently very limited, it is likely to be an important area in the future.