Cost-effectiveness analysis and incremental cost-effectiveness ratios: Uses and pitfalls

Kiran Bambha, W. Ray Kim

Research output: Contribution to journalReview articlepeer-review

23 Scopus citations


Cost-effectiveness analysis is a formal method of comparing alternative medical interventions with regard to their resource utilization (costs) and outcomes (effectiveness). The incremental cost-effectiveness ratio is an informative measure generated from such an analysis and represents the ratio of the difference in cost between two medical interventions to the difference in outcomes between the two interventions. Thus, the incremental cost-effectiveness ratio summarizes the additional cost per unit of health benefit gained in switching from one medical intervention to another. Although incremental cost-effectiveness ratios have limitations, when used in the proper context, these ratios serve as one of the important tools needed to help guide decisions about allocating scarce resources across competing medical programmes.

Original languageEnglish (US)
Pages (from-to)519-526
Number of pages8
JournalEuropean Journal of Gastroenterology and Hepatology
Issue number6
StatePublished - Jun 2004


  • Cost-effectiveness
  • Costs
  • Discounting
  • Economic analysis
  • Health care costs
  • Incremental cost-effectiveness ratio
  • Sensitivity analysis

ASJC Scopus subject areas

  • Hepatology
  • Gastroenterology


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