The Inequality-Adjusted Incremental Cost-Effectiveness Ratio

OBJECTIVES: To adjust the incremental cost-effectiveness ratio (ICER) to capture trade-offs between maximization of total health and impact on social inequality in health. METHODS: We used equity weights derived from a social welfare function to calculate an inequality-adjusted ICER, both indirectly and directly. We demonstrated equivalence of decision rules based on the inequality-adjusted ICER and equity-weighted net health benefit. We defined a health inequality modifier (HIM) to the cost-effectiveness threshold-the ratio of the ICER to the inequality-adjusted ICER-and illustrated its application to hypothetical treatments for 1336 diseases in England. We used hospital admissions to estimate disease prevalence and health benefits by 5 social deprivation groups, assumed no social gradient in health opportunity costs and examined "high," "medium," and "low" health inequality aversion scenarios based on UK general public sample estimates. RESULTS: Assuming medium inequality aversion, the interpercentile HIM range was 0.96 to 1.18, indicating that inequality adjustment would reduce the threshold by 4% at the bottom percentile and increase it by 18% at the top percentile of diseases. The threshold was reduced by at least 10% for only 2 of 1336 (0.15%) diseases and raised by at least 10% for 142 of 1336 (10.6%). High inequality aversion widened the interpercentile HIM range to 0.93 to 1.31. CONCLUSIONS: Use of the inequality-adjusted ICER would effectively modify the cost-effectiveness threshold to consider health inequality impact. In England, the modification would rarely exceed 30%, even assuming high inequality aversion, but could exceed 10% for about one-tenth of diseases assuming medium aversion.