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Cost-effectiveness analysis defines trade-offs between costs, harms, and benefits of alternative treatments and combines them into a single metric, the incremental cost-effectiveness ratio (ICER), that can inform decisions about which interventions to recommend when limited resources are available. Gillian Sanders-Schmidler, PhD, professor of population health sciences and medicine at Duke University, explains the method in terms clinicians can understand. Related Articles: Overview of Cost-effectiveness Analysis Choosing a Time Horizon in Cost and Cost-effectiveness Analyses