A tool employed to assess the relative economic value of different interventions, typically in healthcare or public health, compares the costs of an action against its resulting health benefits, often expressed as cost per life-year gained or cost per quality-adjusted life-year (QALY). For example, comparing the cost of two different medications for treating the same condition by examining their cost in relation to the amount of symptom relief or years of life extended they provide facilitates informed decision-making.
This analytical method provides a framework for resource allocation decisions by objectively comparing the value obtained from various investments. Its use helps ensure limited resources are directed toward interventions offering the highest potential return in terms of health outcomes. Historically, the increasing cost of healthcare and the need to prioritize interventions led to the development and refinement of these evaluation tools.