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The Interpretation of results of economic evaluation: explicating the value of health

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  • Andre Ament
  • Rob Baltussen

Abstract

Theoretically it can be proven that an optimal allocation of resources within a constrained budget can be reached by considering cost‐effectiveness ratios (CERs). In this paper, the complex priority setting process regarding compatible and incompatible alternatives of medical interventions is clarified. Priority setting in the context of compatible alternatives may refer to the selection of more than one, possibly all, alternatives. Inherent to a set of incompatible alternatives is that only one alternative can be selected. This latter situation frequently occurs in health care. The value that society attaches to a unit of effectiveness (e.g. a QALY) has an important impact on the priority ranking of medical interventions. By explicating this value and by using the ‘net‐value’ approach, a graphical framework is presented that allows decision‐makers a better understanding on the impact of particular levels of these values on their optimal policy choices. For illustrative purposes, it is shown that by the erroneous application of decision rules, some recent papers have provided sub‐optimal recommendations for health care policy. © 1997 John Wiley & Sons, Ltd.

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  • Andre Ament & Rob Baltussen, 1997. "The Interpretation of results of economic evaluation: explicating the value of health," Health Economics, John Wiley & Sons, Ltd., vol. 6(6), pages 625-635, November.
    • Handle: RePEc:wly:hlthec:v:6:y:1997:i:6:p:625-635
    DOI: 10.1002/(SICI)1099-1050(199711)6:6<625::AID-HEC309>3.0.CO;2-O
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    References listed on IDEAS

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    1. Birch, Stephen & Gafni, Amiram, 1992. "Cost effectiveness/utility analyses : Do current decision rules lead us to where we want to be?," Journal of Health Economics, Elsevier, vol. 11(3), pages 279-296, October.
    2. Birch, Stephen & Donaldson, Cam, 1987. "Applications of cost-benefit analysis to health care : Departures from welfare economic theory," Journal of Health Economics, Elsevier, vol. 6(3), pages 211-225, September.
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    Cited by:

    1. George Laking & Joanne Lord & Alastair Fischer, 2006. "The economics of diagnosis," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1109-1120, October.
    2. Joanne Lord & George Laking & Alastair Fischer, 2006. "Non‐linearity in the cost‐effectiveness frontier," Health Economics, John Wiley & Sons, Ltd., vol. 15(6), pages 565-577, June.
    3. Andrew Willan, 2011. "Sample Size Determination for Cost-Effectiveness Trials," PharmacoEconomics, Springer, vol. 29(11), pages 933-949, November.
    4. Christopher J.L. Murray & David B. Evans & Arnab Acharya & Rob M.P.M. Baltussen, 2000. "Development of WHO guidelines on generalized cost‐effectiveness analysis," Health Economics, John Wiley & Sons, Ltd., vol. 9(3), pages 235-251, April.
    5. Simon Eckermann & Andrew R. Willan, 2009. "Globally optimal trial design for local decision making," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 203-216, February.
    6. Andrew R. Willan & Andrew H. Briggs & Jeffrey S. Hoch, 2004. "Regression methods for covariate adjustment and subgroup analysis for non‐censored cost‐effectiveness data," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 461-475, May.

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