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Economics of Individualization in Comparative Effectiveness Research and a Basis for a Patient-Centered Health Care

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  • Anirban Basu

Abstract

The United States aspires to use information from comparative effectiveness research (CER) to reduce waste and contain costs without instituting a formal rationing mechanism or compromising patient or physician autonomy with regard to treatment choices. With such ambitious goals, traditional combinations of research designs and analytical methods used in CER may lead to disappointing results. In this paper, I study how alternate regimes of comparative effectiveness information help shape the marginal benefits (demand) curve in the population and how such perceived demand curves impact decision-making at the individual patient level and welfare at the societal level. I highlight the need to individualize comparative effectiveness research in order to generate the true (normative) demand curve for treatments. I discuss methodological principles that guide research designs for such studies. Using an example of the comparative effect of substance abuse treatments on crime, I use novel econometric methods to salvage individualized information from an existing dataset.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16900.

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Date of creation: Mar 2011
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Publication status: published as Basu, Anirban, 2011. "Economics of individualization in comparative effectiveness research and a basis for a patient-centered health care," Journal of Health Economics, Elsevier, vol. 30(3), pages 549-559, May.
Handle: RePEc:nbr:nberwo:16900

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Cited by:
  1. Basu, Anirban & Jena, Anupam B. & Philipson, Tomas J., 2011. "The impact of comparative effectiveness research on health and health care spending," Journal of Health Economics, Elsevier, vol. 30(4), pages 695-706, July.
  2. Karl Claxton & Stephen Palmer & Louise Longworth & Laura Bojke & Susan Griffin & Claire McKenna & Marta Soares & Eldon Spackman & Jihee Youn, 2011. "Uncertainty, evidence and irrecoverable costs: Informing approval, pricing and research decisions for health technologies," Working Papers 069cherp, Centre for Health Economics, University of York.
  3. Meliyanni Johar & Shiko Maruyama, 2011. "Does Coresidence Improve an Elderly Parent’s Health?," Discussion Papers 2011-08, School of Economics, The University of New South Wales.
  4. Evans, H.; & Basu, A;, 2011. "Exploring comparative effect heterogeneity with instrumental variables: prehospital intubation and mortality," Health, Econometrics and Data Group (HEDG) Working Papers 11/08, HEDG, c/o Department of Economics, University of York.
  5. Anirban Basu, 2012. "Estimating Person-Centered Treatment (PeT) Effects Using Instrumental Variables," NBER Working Papers 18056, National Bureau of Economic Research, Inc.

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