Examples
Worked examples
- Is an instance
A drug for rheumatoid arthritis and a drug for age-related macular degeneration cannot be compared on cost per case avoided, because the two conditions have no shared clinical endpoint. Expressed instead as cost per QALY gained -- a CUA -- both submissions land on the same scale, letting a single HTA body's appraisal committee weigh them against one common cost-effectiveness threshold.
- Is an instance
A CUA built as a Markov model simulates a cohort of patients moving between defined health states (e.g., stable disease, progression, death) over a lifetime horizon, applying a QALY utility weight to time spent in each state, to project long-run cost-per-QALY results beyond what a single clinical trial's follow-up period could observe directly.
Counter-examples
Looks similar, but isn't
- Not an instance
A study reporting cost per life-year gained, cost per case averted, or another natural clinical unit -- with no utility weighting applied -- is a cost-effectiveness analysis (CEA) in the broader sense, not a CUA. It only becomes a CUA once each outcome is weighted by a health-state utility value and expressed in QALYs specifically.
- Not an instance
A cost-minimisation analysis, which assumes two interventions produce clinically equivalent outcomes and compares only their costs, is not a CUA -- there is no outcome side to the ratio at all, because the analysis has already assumed effectiveness is identical.
Editorial commentary
A cost-utility analysis (CUA) is the specific form of cost-effectiveness analysis (CEA) that always measures health outcomes in quality-adjusted life years (QALYs) rather than a natural clinical unit tied to one specific condition. Because every CUA uses the same QALY denominator regardless of the disease area being studied, its results are directly comparable across completely different interventions — a cancer drug, a hip replacement, a talking therapy — on one common scale. That comparability is precisely why national health technology assessment bodies, most prominently NICE in the UK, designate CUA specifically, not CEA in general, as the reference-case method a submission is expected to use.
How a CUA is built
A CUA compares the incremental cost of an intervention against the incremental QALYs it produces, generating an incremental cost-effectiveness ratio (ICER) expressed as cost per QALY gained. Because a trial’s follow-up period is rarely long enough to observe a full lifetime of costs and health outcomes directly, most CUAs submitted to an HTA body are built as decision-analytic models — commonly Markov models or partitioned-survival models — that simulate a cohort of patients moving between defined health states over an extended time horizon, applying a QALY utility weight (typically derived from the EQ-5D-5L instrument) to time spent in each state, to project a lifetime cost-per-QALY estimate beyond what the underlying trial data alone could show.
CUA vs. cost-effectiveness analysis vs. cost-benefit analysis
CUA sits between two related methods, distinguished by how the outcome side of the ratio is measured:
- Cost-effectiveness analysis (CEA), broadly. Measures outcome in any natural clinical unit specific to the condition being studied. CUA is best understood as a specific, standardised subtype of CEA, not a wholly separate method — see CASRAI’s cost-effectiveness analysis entry for the broader family and how CEA and CBA differ from CUA.
- Cost-benefit analysis (CBA). Converts the health outcome itself into a monetary value, producing a net-benefit or benefit-cost-ratio figure rather than a cost-per-QALY ratio. HTA bodies overwhelmingly prefer CUA to CBA precisely because CUA does not require assigning a dollar value to a year of human life.
Why HTA bodies require CUA specifically
A submission to NICE, or an equivalent body such as the US nonprofit Institute for Clinical and Economic Review, is expected to report its economic evidence as a QALY-based CUA so that the appraisal committee’s cost-effectiveness judgement is built on a metric that is comparable to every other technology the committee has ever appraised, not just to the intervention’s direct comparator. CASRAI’s NICE technology appraisal process guide covers where that CUA-derived ICER sits inside a live appraisal decision, and CASRAI’s CHEERS 2022 checklist guide covers the current standard for reporting a CUA (or any other economic evaluation) transparently for publication.
Frequently asked questions
What is the difference between cost-effectiveness analysis and cost-utility analysis?
Cost-effectiveness analysis is the broader category: any method comparing cost against a health outcome measured in a natural clinical unit. Cost-utility analysis is the specific case where that outcome is always a QALY, which is what makes CUA results comparable across unrelated disease areas in a way a general CEA’s results are not.
Why do HTA bodies prefer QALYs over a natural clinical outcome?
A natural outcome like “cases of stroke averted” only lets you compare a stroke-prevention intervention against another stroke-prevention intervention. A QALY-based CUA lets an appraisal committee weigh a stroke drug against a cancer drug against a mental-health therapy on one shared scale, which is essential when a health system has to allocate one fixed budget across every disease area at once.
Is a CUA always built as a Markov model?
No. A trial-based CUA can, in principle, extract QALYs directly from within-trial quality-of-life data if the trial’s follow-up already spans the clinically relevant time horizon. Decision-analytic modelling (Markov or partitioned-survival) becomes necessary specifically when costs and outcomes need to be projected beyond the trial’s observed follow-up period, which is the more common case in a technology appraisal.
Machine-readable encodings
Use in your systems
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