Incremental cost

Incremental cost is the additional cost of a treatment compared to an alternative, i.e., the cost difference between them (Table 1). Incremental costs are used in cost-effectiveness analyses of alternative treatments to estimate the incremental cost-effectiveness ratio (ICER).

Table 1. Example of a pairwise incremental cost calculation

Treatment Total cost Incremental cost of A and B
A£24,000£6,000
B£18,000

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