Calculating the marginal cost-effectiveness ratio can help to decide which management strategy to use when one is both more expensive and more effective than the other. It can be challenging to decide if the cost of the increased effectiveness is warranted.
For strategies A and B, where the cost and effectiveness of strategy A are greater than the cost and effectiveness of strategy B:
marginal cost =
= (cost of strategy A) - (cost of strategy B)
marginal effectiveness =
= (effectiveness measure for strategy A) - (effectiveness measure of strategy B)
where:
• Effectiveness may be measured in quality-adjusted life years (QALY).
marginal cost-to-effectiveness ratio =
= (marginal cost) / (marginal effectiveness)
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