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Implications of an economic model of health states worse than dead

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  • Sharma, Rajiv
  • Stano, Miron
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    Abstract

    We introduce a formal definition of health equivalent to dead into a standard model to develop previously unrecognized insights. We find that the health state viewed as equivalent to dead will depend on an individual's health prognosis, probability of survival, and rate of time preference. Our work on maximum endurable time shows that using QALY scores based on long-run preferences to value health states that last for shorter periods can alter cardinal and ordinal valuations. Simulations show that errors of substantial magnitude in QALY scores can consequently result. We describe situations where biases are likely and identify possible corrections.

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    File URL: http://www.sciencedirect.com/science/article/B6V8K-505F9CK-1/2/05019d6cacd8cadf6cc4b2d7425623d2
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    Bibliographic Info

    Article provided by Elsevier in its journal Journal of Health Economics.

    Volume (Year): 29 (2010)
    Issue (Month): 4 (July)
    Pages: 536-540

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    Handle: RePEc:eee:jhecon:v:29:y:2010:i:4:p:536-540

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    Web page: http://www.elsevier.com/locate/inca/505560

    Related research

    Keywords: Economic evaluation Health equivalent to dead Health worse than dead Maximum endurable time QALYs;

    References

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    14. Torrance, George W., 1986. "Measurement of health state utilities for economic appraisal : A review," Journal of Health Economics, Elsevier, vol. 5(1), pages 1-30, March.
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    16. Viscusi, W Kip & Evans, William N, 1990. "Utility Functions That Depend on Health Status: Estimates and Economic Implications," American Economic Review, American Economic Association, vol. 80(3), pages 353-74, June.
    17. Felder, Stefan & Meier, Markus & Schmitt, Horst, 2000. "Health care expenditure in the last months of life," Journal of Health Economics, Elsevier, vol. 19(5), pages 679-695, September.
    18. David M. Cutler & Elizabeth Richardson, 1997. "Measuring the Health of the U.S. Population," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 217-282.
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    20. Sharma, Rajiv & Stano, Miron & Haas, Mitchell, 2004. "Adjusting to changes in health: implications for cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 23(2), pages 335-351, March.
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