Health economics · Cost-effectiveness
ICER, QALY & Net Benefit Calculator
Compare a new intervention with a comparator: the incremental cost-effectiveness ratio, the net monetary and net health benefit against a willingness-to-pay threshold, and where the result sits on the cost-effectiveness plane. With optional QALY-from-utility and discounting helpers.
QALYs = health utility (0 = death, 1 = full health) × years, optionally discounted.
Result
In plain English
Health economics asks not just “does it work?” but “is it worth the money?”. This compares a new treatment with the current one on both cost and health gained.
- QALY
- Quality-Adjusted Life Year. One year in perfect health = 1. A year at half-health, or two years at quarter-health, counts as about 0.5.
- ICER
- Incremental Cost-Effectiveness Ratio: the extra cost for each extra QALY the new option buys — cost divided by health gained.
- WTP threshold
- Willingness-To-Pay: the most a payer will spend per QALY (NICE uses roughly £20k–£30k). Come in below it and you're judged good value.
- net monetary benefit
- The health gain converted into money, minus the extra cost. Positive = worth it. A cleaner yes/no than the ratio.
- dominant / dominated
- Dominant = better and cheaper (obviously adopt). Dominated = worse and dearer (obviously reject).
Frequently asked
What is an ICER?
The Incremental Cost-Effectiveness Ratio — the extra cost divided by the extra health gain (in QALYs) of one option versus another. It answers “how much does each additional unit of health cost?” and is judged against a willingness-to-pay threshold.
What is a QALY?
A Quality-Adjusted Life Year: one year in perfect health = 1 QALY, weighted down for poorer health states. It lets very different treatments be compared on one scale — but the quality weights are value judgements, not pure facts.
What does net monetary benefit add over the ICER?
ICERs misbehave when differences are tiny or one option is both cheaper and better. Net benefit — health gain valued at the threshold, minus cost — stays well-behaved and ranks options cleanly, which is why this calculator shows it.
What is a willingness-to-pay threshold?
It is the most a payer will spend for one extra quality-adjusted life year — the line that turns an ICER into a yes/no decision. The UK’s NICE uses roughly £20,000–£30,000 per QALY; the figure varies by country and is partly a value judgement, not a scientific constant. An intervention is “cost-effective” only relative to the threshold you pick, so always state which one you used.