Cost Recommendations in the Second Edition of Cost

A 2nd edition of Cost-Effectiveness in Health and Medicine has now been published by a group of medical decision-making experts known collectively as the 2nd Panel. This is a critical review of the recommendations for how to deal with costs in cost-effectiveness analysis, recommendations that are contained in Chapter 8 of that edition, titled “Estimating Costs and Valuations of Non-Health Benefits in Cost-Effectiveness Analysis,” authored primarily but not exclusively by Anirban Basu. This review focuses on the correspondence between the costs in the numerator of the incremental cost-effectiveness ratio (ICER) and what is measured in the denominator of the ICER by the quality-adjusted life years (QALYs). Although it raises a number of issues regarding what is actually being measured in the numerator and denominator of the ICER, it primarily challenges the 2nd Panel’s recommendation that the costs of non-health consumption in any additional years of life generated by the intervention in question be accounted for in the numerator, even though no measures of the benefits are included in the QALYs in the denominator. This review is adapted from a review of the entire 2nd edition that was sent to the 2nd Panel steering committee on January 8, 2016