costutility

Cost-utility refers to a form of economic evaluation used in health care and public health that compares the costs and impacts of interventions in terms of utility-based outcomes, most commonly quality-adjusted life years (QALYs). In a cost-utility analysis, effects are measured in QALYs, which combine the length of time gained with a weight reflecting the quality of life during that time. Utilities are typically derived from patient or population surveys using instruments such as the EQ-5D, HUI, or SF-6D, and are anchored between 0 (death) and 1 (perfect health), with some measures allowing negative values for states considered worse than death.

Cost-utility analysis is a specialized form of cost-effectiveness analysis. It contrasts differences in costs with differences in QALYs, yielding the incremental cost-utility ratio (ICUR): the additional cost per additional QALY gained. Decision-makers compare ICURs against acceptable willingness-to-pay thresholds to judge whether an intervention provides good value for money. Thresholds vary by country and context, and are often debated.

Data for CUAs come from clinical trials, observational studies, or decision-analytic models, with discounting applied to both costs and health outcomes to reflect time preference. Sensitivity analyses—one-way, multi-way, and probabilistic—assess uncertainty in model inputs and assumptions. Strengths of cost-utility analysis include comparability across different diseases and the explicit incorporation of quality of life; limitations involve measurement challenges for utilities, ethical concerns about valuing health states, and potential biases in utility elicitation.

Cost-utility is widely used by health technology assessment agencies, payer groups, and policymakers to inform resource allocation and reimbursement decisions.