Purpose: Economic evaluations can mask important sources of heterogeneity that may lead to suboptimal reimbursement decisions for subgroups of patients. For dichotomous characteristics (i.e. sex) heterogeneity can easily be incorporated in economic evaluations using subgroups. However, when the characteristic is continuous (i.e. age), the optimal cut-off point for subgroups is uncertain. This study provides a stepwise method to determine cut-off points based on incremental net monetary benefit (iNMB), as opposed to the traditional cut-off based on clinical effectiveness or costs.
Methods: First, an economic evaluation is performed on all available evidence, including parameter uncertainty and possible sources of heterogeneity. Incremental cost-effectiveness ratios (ICERs), cost-effectiveness acceptability curves and expected value of perfect information are calculated for the total population. When decision uncertainty exists, the second step is to examine the relationship between the source of heterogeneity and iNMB. The third step is to repeat step 1 for a range of cut-off points for subgroups. As an illustration we use a hypothetical economic evaluation of a new treatment for lung cancer. Heterogeneity is incorporated in terms of the continuous characteristic tumor size (range 1-8 centimeters). The relation between tumor size and probability of recurrence is incorporated using regression analysis.
Results: First, an ICER of €87149 per quality adjusted life year (QALY) for the population was estimated. Assuming a maximum threshold of €40000 per QALY, this resulted in a negative iNMB and a cost-effectiveness probability of 27%. Second, regression analysis showed that the iNMB was higher for smaller tumor sizes. The maximum tumor size for which treatment was cost-effective depended on the threshold value for a QALY (Figure 1). Third, narrowing the indication to a subgroup with a maximum tumor size of 4 centimeters decreased the ICER to €23270. For a threshold value of €40000 per QALY, the cost-effectiveness probability for this subgroup was 79%.
Conclusions: The present study illustrates a possible solution for incorporating continuous heterogeneity characteristics in economic evaluations and decision-making. Instead of basing subgroups on clinical evidence, the relationship between the characteristic and the iNMB, for a range of thresholds, is examined, to give decision-makers the opportunity to define for which subgroups the treatment cost-effectiveness is acceptable. Still, more research is needed on methodology for incorporating and presenting heterogeneity for continuous parameters in economic evaluation. 
Candidate for the Lee B. Lusted Student Prize Competition