Which of the following techniques should be used when conducting an economic appraisal of three or more treatment alternatives?

• A. Incremental benefit - cost ratio
• B. Net Present Value
• C. Cost-Effectiveness Analysis
• D. Return on Investment

Answer: (A)

When three or more treatment options are being compared, you assess them by looking at the additional benefit gained for each additional unit of cost as you move from one option to a more expensive one. This is the incremental benefit–cost ratio. It reveals the marginal value of upgrading to a higher-cost option and helps you decide whether the extra benefit justifies the extra cost at each step. By applying this incrementally, you can drop options that are dominated (more expensive and less beneficial) and determine, at the point where you stop, which option offers the best value given a willingness-to-pay threshold.

Net Present Value and Return on Investment focus on financial cash flows or returns, but don’t directly translate health benefits into a common decision metric across several alternatives. Cost-Effectiveness Analysis is useful, but when faced with multiple options, the step-by-step incremental approach with the incremental benefit–cost ratio specifically handles the trade-offs among several alternatives and guides the choice based on whether each upgrade meets the decision threshold.