A diagrammatic way of comparing technologies. A four-quadrant figure of cost difference plotted against effect difference yields quadrant I, intervention more effective and more costly than comparator; quadrant II, intervention more effective and less costly than comparator; quadrant III, intervention less
Change in cost (AC )
Change in effectiveness (AE)
78 Cost-effectiveness Ratio effective and less costly than comparator; and quadrant IV, intervention less effective and more costly than comparator. In quadrant II, the intervention dominates the comparator and, in quadrant IV, the comparator dominates the intervention. Quadrants I and III are the more interesting cases. Here the cost-effectiveness of the alternatives depends upon the size of the incremental cost-effectiveness ratio (AC/AE) and on whether the AE is positive or negative. Let there be a maximum amount a decision maker will pay for an increment of outcome (AE) indicated by the dotted line X. Any point to the left of X indicates that comparator treatment is more cost-effective, while points to the right of X indicate that intervention is more cost-effective. All points below X are in the 'region of acceptability' (note that AC/AE is lower -actually negative - than X in quadrant IV, but that this quadrant cannot be in the region of acceptability since AE is actually negative here). See also Confidence Box, Confidence Ellipse.
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