Aims To assess the cost-effectiveness of an improved automated grading algorithm for diabetic retinopathy against a previously described algorithm, and in comparison with manual grading. Methods Efficacy of the alternative algorithms was assessed using a reference graded set of images from three screening centres in Scotland (1253 cases with observable/referable retinopathy and 6333 individuals with mild or no retinopathy). Screening outcomes and grading and diagnosis costs were modelled for a

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... ohort of 180 000 people, with prevalence of referable retinopathy at 4%. Algorithm (b), which combines image quality assessment with detection algorithms for microaneurysms (MA), blot haemorrhages and exudates, was compared with a simpler algorithm (a) (using image quality assessment and MA/dot haemorrhage (DH) detection), and the current practice of manual grading. Results Compared with algorithm (a), algorithm (b) would identify an additional 113 cases of referable retinopathy for an incremental cost of £68 per additional case. Compared with manual grading, automated grading would be expected to identify between 54 and 123 fewer referable cases, for a grading cost saving between £3834 and £1727 per case missed. Extrapolation modelling over a 20-year time horizon suggests manual grading would cost between £25 676 and £267 115 per additional quality adjusted life year gained. Conclusions Algorithm (b) is more cost-effective than the algorithm based on quality assessment and MA/DH detection. With respect to the value of introducing automated detection systems into screening programmes, automated grading operates within the recommended national standards in Scotland and is likely to be considered a cost-effective alternative to manual disease/no disease grading.