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Cost Utility Analysis

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Mental Health Economics

Abstract

Cost-utility analysis (CUA) has become widely used, particularly in the United Kingdom, compared with other techniques within cost-effectiveness analysis. CUA uses metrics such as the quality-adjusted life year (QALY) to assess the effectiveness of an intervention compared with an alternative. The QALY accounts for mortality (life years) and morbidity (severity of a state) in a single metric; the quality adjustment is based on stated preferences (also referred to as utility weights) that can be obtained from patients or the general public using preference elicitation techniques. For trial-based evaluations, preference-based measures have been developed to assess effectiveness and to elicit QALYs. Once the costs and QALYs for a study have been established, incremental cost-effectiveness ratios (ICERs) can be used as part of a decision rule whereby an ICER threshold (or league table) is set to inform decision makers about the potential comparative cost-effectiveness of an intervention. Within this chapter, extra-welfarism as the conceptual basis for CUA and reasons for the use of stated preference to represent utility weights are described. Preference-based outcome measures and how they are used as part of cost-per-QALY analysis are also described; disability-adjusted life years are also considered. How ICERs, thresholds, and league tables can be used to inform decision-making is also introduced. Throughout this chapter, examples within the context of mental health are used. A final section is dedicated to specific implications of using CUA for evaluating mental health interventions and aspects to consider as CUA evolves.

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  1. HEDS, School of Health and Related Research (ScHARR), University of Sheffield, West Court, 1 Mappin Street, Sheffield, S1 4DT, UK

    Matthew Franklin

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  1. Centre of Economic Mental Health, Department of Psychiatry, Universidade Federal de São Paulo, São Paulo, Brazil

    Denise Razzouk

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Franklin, M. (2017). Cost Utility Analysis. In: Razzouk, D. (eds) Mental Health Economics. Springer, Cham. https://doi.org/10.1007/978-3-319-55266-8_6

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  • DOI: https://doi.org/10.1007/978-3-319-55266-8_6

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