Why cost‐effectiveness should trump (clinical) effectiveness: the ethical economics of the South West quadrant

In many health decision making situations there is a requirement that the effectiveness of interventions, usually their ‘clinical’ effectiveness, be established, as well as their cost‐effectiveness. Often indeed this is effectively a prior requirement for their cost‐effectiveness being investigated. If, however, one accepts the ethical argument for using a threshold incremental cost‐effectiveness ratio (ICER) for interventions that are more effective but more costly (i.e. fall in the NE quadrant of the cost‐effectiveness plane), one should apply the same decision rule in the SW quadrant, where the intervention is less effective but less costly. This implication is present in most standard treatments of cost‐effectiveness analysis, including recent stochastic versions, and had gone relatively unquestioned within the discipline until the recent suggestion that the ICER threshold might be ‘kinked’. A kinked threshold would, O'Brien et al. argue, better reflect the asymmetrical individual preferences found in empirical studies of consumer's willingness to pay and willingness to accept and justify different decision rules in the NE and SW quadrants. We reject the validity of such asymmetric preferences in the context of public health care decisions and consider and counter the two main ‘ethical’ objections that probably underlie the asymmetry in this case – the objection to ‘taking away’ and the objection to being required to undergo treatment that is less effective than no treatment at all. Copyright © 2004 John Wiley & Sons, Ltd.