PRM207 - What’s The Matter With Average Cost-Effectiveness Ratios? A Simple Graphical Explanation

Abstract

Average cost-effectiveness ratios (ACERs) are not recommended because they are misleading, ignore available alternatives, and fail to maximize net health benefit; but these explanations can be challenging for consumers of health economic analyses to fully grasp. We present a simple intuitive graphical representation of ACERs to help students, clinicians, and decision makers understand the methodological shortcomings of ACERs. The ACER of a healthcare intervention is calculated by dividing the intervention cost by its effectiveness, and can be graphically represented by a line connecting the origin of the cost-effectiveness plane through the point consisting of the costs and effectiveness of the intervention. All points on this line share the same ACER. If we graphically compare the ACER of two interventions, the line with a lower slope has a lower ACER. Knowing just the ACER of two interventions, we can only be certain that the intervention with a higher ACER cannot dominate an intervention with a lower ACER. However, the relative costs and benefits of the interventions remain unknown. It is possible that the intervention with a lower ACER: (1) dominates the intervention with the higher ACER, (2) is more costly and more effective, or (3) is less costly and less effective. And if (2) or (3) are true, the relative magnitude of differences in cost and effectiveness between the interventions remains unknown. We utilize a simple and intuitive graphic to demonstrate these concepts and show that ACERs do not allow reliable comparisons. Therefore an incremental cost-effectiveness ratio is necessary to evaluate the relative costs and benefits between any two competing interventions. We also demonstrate how this applies to multiple-comparator analyses where each intervention is compared to a common comparator. A simple graphical analysis can help provide pedagogic support to demonstrate the limitations of using ACERs to make comparisons between healthcare interventions.