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Advances in cost-effectiveness analysis of health interventions

In: Handbook of Health Economics

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Author Info
Garber, Alan M.
Abstract

Recent work has clarified the welfare implications of the application of cost-effectiveness analysis to the allocation of health care. Although cost-effectiveness analysis shares many similarities with cost-benefit analysis, it did not develop as an outgrowth of neoclassical welfare economics. Consequently, even though the welfare implications of public decisionmaking based on cost-benefit analysis have long been understood, until recently the conditions under which decisions made on the basis of cost-effectiveness criteria lead to potential Pareto improvement had received little attention.This chapter describes the welfare economic foundations of cost-effectiveness analysis and how such foundations can be applied to resolve controversies in the application of the technique. It also discusses procedures for applying the technique, the circumstances under which decision rules based on cost-effectiveness analysis have desirable welfare economic properties, the appropriate perspective for the analysis, and issues in measuring outcomes. Even when standard welfare economic assumptions are not fully accurate descriptions of the markets and conditions in which health care is delivered, cost-effectiveness analysis can be a useful guide to allocation decisions.

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This chapter was published in: A. J. Culyer & J. P. Newhouse (ed.) Handbook of Health Economics, , chapter 04, pages 181-221, 2000.

This item is provided by Elsevier in its series Handbook of Health Economics with number 1-04.

Handle: RePEc:eee:heachp:1-04

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Related research
This chapter was published in the following book, which is listed on IDEAS:
A. J. Culyer & J. P. Newhouse (ed.), 2000. "Handbook of Health Economics," Handbook of Health Economics, Elsevier, edition 1, volume 1, number 1, September. [Downloadable!] (restricted)
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I1 - Health, Education, and Welfare - - Health

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  1. Hoel, Michael, 2005. "Prioritizing public health expenditures when there is a private alternative," Memorandum 16/2005, Oslo University, Department of Economics. [Downloadable!]
  2. Carmen Herrero & Juan D. Moreno-Ternero, 2005. "A new outcome measure for cost-utility analyses of screening programs," Economics Bulletin, Economics Bulletin, vol. 9(7), pages 1-8. [Downloadable!]
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  3. Bengt Liljas & Göran S. Karlsson & Nils-Olov Stålhammar, 2008. "On future non-medical costs in economic evaluations," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 579-591. [Downloadable!]
  4. Anirban Basu & Bhakti V. Arondekar & Paul J. Rathouz, 2006. "Scale of interest versus scale of estimation: comparing alternative estimators for the incremental costs of a comorbidity," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1091-1107. [Downloadable!]
  5. Anupam Jena & Tomas Philipson, 2009. "Endogenous Cost-Effectiveness Analysis in Health Care Technology Adoption," NBER Working Papers 15032, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  6. Carmen Herrero & Juan Moreno-Ternero, 2008. "Opportunity analysis of newborn screening programs," Review of Economic Design, Springer, vol. 12(4), pages 259-277, December. [Downloadable!] (restricted)
    Other versions:
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