Calculate incremental cost effectiveness ratio

What it's for

Answers whether a more expensive initiative buys enough additional outcome, exposes dominated proposals, and shows how the answer changes with the organization's value threshold.

What you give it

Every tool is a pure function: it computes from what you pass it and reads nothing on its own. Inputs split into evidence you supply from your connected systems, calibration your team owns, and numerical controls that affect precision but never the result's meaning.

{
  "alternatives": [
    {
      "cost_scenarios": [
        0,
        0
      ],
      "effect_scenarios": [
        0,
        0
      ],
      "id": "retain"
    },
    {
      "cost_scenarios": [
        80,
        120
      ],
      "effect_scenarios": [
        8,
        14
      ],
      "id": "automate"
    },
    {
      "cost_scenarios": [
        130,
        170
      ],
      "effect_scenarios": [
        16,
        20
      ],
      "id": "redesign"
    }
  ],
  "comparator_id": "retain",
  "preferred_willingness_to_pay": 10,
  "scenarios": [
    {
      "id": "base",
      "probability": 0.7
    },
    {

What you get back

This is the actual output of running the example above — computed by the same function the platform calls, not an illustration.

{
  "acceptability_curve": [
    {
      "expected_net_benefit": 0,
      "highest_expected_net_benefit_alternative_id": "retain",
      "probabilities_by_alternative": {
        "automate": 0,
        "redesign": 0,
        "retain": 1
      },
      "probability_cost_effective": 1,
      "willingness_to_pay": 5
    },
    {
      "expected_net_benefit": 30,
      "highest_expected_net_benefit_alternative_id": "redesign",
      "probabilities_by_alternative": {
        "automate": 0,
        "redesign": 1,
        "retain": 0
      },
      "probability_cost_effective": 1,
      "willingness_to_pay": 10
    },
    {
      "expected_net_benefit": 202,
      "highest_expected_net_benefit_alternative_id": "redesign",
      "probabilities_by_alternative": {
        "automate": 0,
        "redesign": 1,
        "retain": 0
      },
      "probability_cost_effective": 1,
      "willingness_to_pay": 20
    }
  ],
  "alternative_diagnostics": [
    {
      "alternative_id": "redesign",
      "dominance_status": "not_dominated",
      "dominance_witness_id": null,
      "expected_cost": 142,
      "expected_effect": 17.2,
      "expected_net_benefit_at_preferred_threshold": 30,

How it works

Statistical audit & measurement — Check whether a number is fit to decide on: coverage, timing, reconciliation, and the gaps a dashboard hides.

1. 1 Define comparable alternatives, an explicit comparator, jointly aligned incremental cost/effect scenarios and governed willingness-to-pay values for one effect unit.
2. 2 Sort expected cost and effect, remove strict and extended dominance, and calculate successive frontier incremental costs, effects and ICERs only where a ratio is meaningful.
3. 3 Calculate scenario net monetary benefit at every threshold, probability each alternative is cost-effective and the preferred-threshold recommendation without breaking cost/effect dependence.

Before you trust it

Every tool in the catalog ships with the conditions under which its answer is meaningful — and the conditions under which it should abstain instead of guessing.

Calibrating it to your org

Calibration workflow

1. 1 Define the management decision, target outcome, aggregate unit, privacy boundary, cadence, and prediction/intervention horizon for this organization.
2. 2 Build a tenant-scoped historical cohort using only information available before each prediction or decision; preserve zero periods, censoring, assignment probabilities, and unresolved outcomes when the method requires them.
3. 3 Estimate statistical parameters on training history, but obtain costs, utilities, risk tolerance, practical-effect thresholds, capacity, and policy constraints from accountable decision owners.
4. 4 Validate on later time windows or held-out aggregate units at the deployment grain, against a simple baseline and the function-specific validation strategy.
5. 5 Deploy only if the returned decision clears evidence, overlap, calibration, robustness, and guardrail checks; warning, unsupported, schema-gap, and fallback decisions are abstentions.
6. 6 Monitor realized outcomes, data drift, coverage, and decision regret; recalibrate at a governed cadence or after a detected regime/definition change, never merely because a stakeholder dislikes the result.

Call it from your AI

You don't wire up 388 tools in your MCP client. The GitRevio MCP server exposes 20 tools, three of which let an agent search the catalog, read a tool's schema, and run it — so the assistant finds this one on its own.

gitrevio_capabilities_search
  { "q": "construct a probabilistic incremental costeffectiveness frontier" }
  → finds "calculate_incremental_cost_effectiveness_ratio"

gitrevio_capability_describe
  { "capability_id": "calculate_incremental_cost_effectiveness_ratio" }
  → returns the input schema and agent guidance shown on this page

gitrevio_capability_run
  { "capability_id": "calculate_incremental_cost_effectiveness_ratio", "arguments": { ... } }
  → returns the result shown above

Works in Claude Desktop, Claude Code, Cursor, Cline, Continue.dev, Goose and Aider. See the MCP server.

Related tools

See every tool in Delivery forecasting & commitments →