Cost-Utility Analysis (CUA)

Definition: Cost-utility analysis (CUA) is an economic evaluation method that compares the costs of different interventions relative to their health outcomes, measured in quality-adjusted life years (QALYs) or disability-adjusted life years (DALYs).

Typical ICUR formula (Incremental Cost-Utility Ratio): (Cost_A − Cost_B) / (QALY_A − QALY_B)

Key elements:

• Costs: Includes direct medical costs (e.g., drugs, surgery, hospitalization) and sometimes indirect costs (e.g., productivity losses).
• Utilities: Quantifies health-related quality of life on a scale from 0 (death) to 1 (perfect health).
• Outcome: Expressed as cost per QALY gained.

Purpose: Used to help policymakers determine whether a healthcare intervention offers good value for money compared to alternatives with different health effects.