Advanced Search
MyIDEAS: Login to save this paper or follow this series

Allocating health care resources when people are risk averse with respect to life time

Contents:

Author Info

  • Hoel, Michael

    ()
    (Department of Economics)

Registered author(s):

    Abstract

    The criterion of cost-effectiveness in health management may be given a welfaretheoretical justification if people are risk neutral with respect to life years. With risk aversion, the optimal allocation of health expenditures change: Compared to the costeffective allocation, more resources should be allocated to health cases for which the expected outcomes even after treatment are worse than average. The consequences of medical interventions are usually not known with certainty. Given this type of uncertainty, simple application of cost-effectiveness analysis would recommend maximization of expected health benefits given the health budget. We show that when people are risk averse with respect to the number of life years they live, the uncertainty associated with different types of interventions should play a role on allocating the health budget.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.hero.uio.no/publicat/2001/HERO2001_10.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Oslo University, Health Economics Research Programme in its series HERO On line Working Paper Series with number 2001:10.

    as in new window
    Length: 13 pages
    Date of creation: 30 Jun 2009
    Date of revision:
    Handle: RePEc:hhs:oslohe:2001_010

    Contact details of provider:
    Postal: HERO / Institute of Health Management and Health Economics P.O. Box 1089 Blindern, N-0317 Oslo, Norway
    Phone: 2307 5309
    Fax: 2307 5310
    Email:
    Web page: http://www.hero.uio.no/eng.html
    More information through EDIRC

    Related research

    Keywords: Health management; risk aversion; QALY; HYE;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Dolan, Paul, 1998. "The measurement of individual utility and social welfare," Journal of Health Economics, Elsevier, vol. 17(1), pages 39-52, January.
    2. Pratt, John W & Zeckhauser, Richard J, 1996. "Willingness to Pay and the Distribution of Risk and Wealth," Journal of Political Economy, University of Chicago Press, vol. 104(4), pages 747-63, August.
    3. Garber, Alan M. & Phelps, Charles E., 1997. "Economic foundations of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 1-31, February.
    4. Culyer, A. J. & Wagstaff, Adam, 1993. "QALYs versus HYEs," Journal of Health Economics, Elsevier, vol. 12(3), pages 311-323, October.
    5. Olsen, Jan Abel, 1997. "Theories of justice and their implications for priority setting in health care," Journal of Health Economics, Elsevier, vol. 16(6), pages 625-639, December.
    6. Wagstaff, Adam, 1991. "QALYs and the equity-efficiency trade-off," Journal of Health Economics, Elsevier, vol. 10(1), pages 21-41, May.
    7. Bleichrodt, Han & Wakker, Peter & Johannesson, Magnus, 1997. "Characterizing QALYs by Risk Neutrality," Journal of Risk and Uncertainty, Springer, vol. 15(2), pages 107-14, November.
    8. Bleichrodt, Han & Quiggin, John, 1999. "Life-cycle preferences over consumption and health: when is cost-effectiveness analysis equivalent to cost-benefit analysis?," Journal of Health Economics, Elsevier, vol. 18(6), pages 681-708, December.
    9. Johannesson, Magnus & Weinstein, Milton C., 1993. "On the decision rules of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 12(4), pages 459-467, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:hhs:oslohe:2001_010. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Anbjørg Kolaas).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.