This is lesson 4.1.3, Interpreting an ICER. As you may recall, in the previous lesson we discussed what the Incremental Cost Effectiveness Ratio is, or an ICER. The ICER is the ratio of the difference in the cost of treatment A minus the cost of treatment B, so that's the difference in the cost divided by the difference in the benefit of treatment A and the benefit of treatment B. So the change or difference in benefits. This ratio can also be expressed graphically in what is known as the Cost-Effectiveness Plane. The cost-effectiveness plane measures cost and effectiveness in a graphical representation. So cost is measured on the vertical axis with high cost towards the top, and low cost towards the bottom. And effectiveness is measured on the horizontal, or left to right with low effectiveness on the left and high effectiveness on the right. This results in four quadrants where the ICER could fall. The first is more expensive and more effective technologies. So higher cost and higher effectiveness. The second are less effective, but more expensive. So again, more expensive, but less effective. The third quadrant is both less effective and less expensive. And finally, in the fourth quadrant, an ICER demonstrates the technologies are more effective and less expensive. The ICER when plotted is equal to the slope of a line on the Cost-Effectiveness Plane. So the origin is the reference intervention. And the difference between the new technology and the origin gives you the effectiveness on the horizontal axis, or the change in X. Think change in cost from the origin or change in cost of the new technology relative to the reference intervention gives you the change in Y, so this ICER is simply the slope of the line of the change in cost over the change in benefits or effectiveness. There are two quadrants of the cost-effectiveness plane that are easy to interpret. The first is the cost saving quadrant or quadrant four. Here, technologies are more effective but lower cost. So there's higher effectiveness and lower costs. So these are always cost effective. Alternative in quadrant two, technologies are always dominated or not cost effective, so here, effectiveness is always lower and cost are always higher. So you have high cost, Higher cost and lower effectiveness. So these technologies are always dominated or not cost effective. Next, led us to discuss how to interpret the other two quadrants. First, there may be technologies that demonstrate large decreases in costs. So there Is a big change in cost. But they may result in a small decrease in effectiveness. For example, a new, single pill that replaces multiple pills per day may also have slight side effects but be substantially lower cost than multiple pills per day. So the changing cost outweighs the small reduction in benefits, resulting in a cost-effective technology. Alternatively, there may be instances where there is an increase in cost. So cost go up but there's also a large increase in benefits that outweighs what the offset or increase in costs is. So this may be the example of a breakthrough medical device for a condition that was previously untreated. The cost may be more expensive. Or there may have been no way to treat it before. But the benefits are substantially larger than any increase in cost. Resulting in an ICER that falls in quadrant one. But is demonstrating a cost-effective technology. Because of the large increase in benefits. It's important to interpret the ICER based on effectiveness relative to cost, and remember that in a cost-effectiveness plane, the slope of the line is simply the ICER.