Ratio-based and net benefit-based approaches to health care resource allocation: proofs of optimality and equivalence

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Abstract
Both incremental cost‐effectiveness ratios and net benefits have been proposed as summary measures for use in cost‐effectiveness analyses. We present a unifying proof of the optimality and equivalence of ICER‐ and net benefit‐based approaches to the health resource allocation problem, including both ‘fixed budget’ and ‘fixed price’ decision rules. If internally consistent willingness‐to‐pay values are used, ratio‐ and net benefit‐based decision rules identify the same optimal allocation. Because they have identical resource allocation implications, use of one or other of the two approaches must be based on other criteria, such as their behaviour under conditions of uncertainty. Copyright © 1999 John Wiley & Sons, Ltd.

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