ICER Calculator

Formula

The formula to calculate the incremental cost-effectiveness ratio (ICER) is:

\[ ICER = \frac{CA - CB}{EA - EB} \]

Where:

$ ICER $ is the incremental cost-effectiveness ratio ($/effect).
$ CA $ is the cost of implementation A ($).
$ CB $ is the cost of implementation B ($).
$ EA $ is the effectiveness of implementation A.
$ EB $ is the effectiveness of implementation B.

What is ICER?

ICER, which stands for incremental cost-effectiveness ratio, is a relative measure of the ratio of cost to effectiveness of two different treatments or plans. This is calculated by dividing the difference between the cost by the difference between the effect. Most often this term is used in fields such as health care when analyzing the cost-benefits of different treatments on a patient’s outcome. It’s also used often in economics to determine how differing projects would affect the health and the economy of an area.

Example Calculation

Consider an example where:

Cost of Implementation A (CA): $50,000
Cost of Implementation B (CB): $30,000
Effectiveness of Implementation A (EA): 10 years
Effectiveness of Implementation B (EB): 8 years

Using the formula to calculate the ICER:

\[ ICER = \frac{50000 - 30000}{10 - 8} = 10000 \text{ dollars per year} \]

This means that the incremental cost-effectiveness ratio for this example is $10,000 per year.