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Cost-Effectiveness Thresholds: What Decision-Makers Need to Know
What cost-effectiveness thresholds are, the main approaches to setting them, the debate over GDP-based thresholds, and how to use thresholds carefully. Presents published evidence and debates; it does not recommend a threshold.
PDFUpdated 30 September 2026Economic evaluation & HTA
What's inside
- What a threshold is and how it is used with the ICER and net monetary benefit
- Two different ideas behind thresholds — willingness to pay and opportunity cost
- The history and critique of GDP-based thresholds
- Estimates based on health opportunity costs
- Practical ways to use thresholds without over-relying on them
Key points
- 01A threshold is the maximum a decision-maker will pay for a unit of health, such as a DALY averted.
- 02GDP-based thresholds were widely used but have been critiqued in the literature.
- 03Opportunity-cost research suggests thresholds consistent with many health budgets may be lower.
- 04Use national guidance where it exists, and show results across a range of thresholds.
Frequently asked questions
Does HEOR Africa recommend a threshold?
No. This guide summarises published evidence and debates. The choice of threshold belongs to national decision-makers and their guidance.
What is the difference between a demand-side and a supply-side threshold?
A demand-side threshold reflects how much society is willing to pay for health. A supply-side threshold reflects the health forgone elsewhere in the system when money is spent on something new — the opportunity cost.
Should a decision rest on the threshold alone?
No. Thresholds are one input. Budget impact, equity, severity, feasibility and other criteria also matter in priority setting.
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