Which of the following best describes the relationship between ICER and health economics?

The correct answer highlights that Incremental Cost-Effectiveness Ratio (ICER) is a crucial metric in health economics used to assess the value of medical interventions, including genetic testing. ICER compares the relative costs and outcomes (effectiveness) of two or more healthcare strategies. By measuring how much additional cost is incurred for a unit of effectiveness, ICER helps healthcare decision-makers identify the most cost-effective solution, thereby allowing for the optimal allocation of resources in healthcare systems.

This understanding is vital as it informs policy-making, funding decisions, and clinical practices by emphasizing interventions that provide the greatest benefit relative to their costs. In the context of genetic testing, using ICER is fundamental to determining which tests should be prioritized based on their economic value and health outcomes achieved per dollar spent.

The other options mention aspects that are not central to the definition or application of ICER in health economics. For example, quantifying psychological impacts and addressing legality are not the focus of ICER, nor does it evaluate biological effects. Instead, it specifically centers on economic efficiency in healthcare solutions.