Mohan V. Bala

The appropriate interpretation of cost-effectiveness results and its use in treatment decision making have been debated vigorously. In this report we have summarized the decision rules described in the health economics literature to determine which intervention should be chosen from among multiple treatment options for a given disease, using a graphic framework. The implications of different means of expressing budget constraints on treatment choice are examined.

In this paper, we examine the problems associated with using quality adjusted life years (QALYs) as the measure of effectiveness to evaluate interventions for acute conditions. We illustrate the way in which using commonly accepted benchmarks for costs per QALY, in order to adopt interventions for acute conditions, might result in decisions that are not consistent with maximizing net societal benefit. We suggest that an alternate methodology, such as willingness to pay, may be more appropriate to make allocation decisions for acute conditions.