Advances in Cost-Effectiveness Analysis of Health Interventions
Abstract
The growing application of cost-effectiveness (CE) analysis and controversies about its methods has led to a need to explore its welfare economic foundations. Examination of its welfare theoretic foundations can provide a rationale for selecting specific standards for the application of CE analysis while deepening our understanding of the implications of alternative methodological approaches. In this paper, I explore conditions under which decision making based on CE analysis, carried out a specific way, leads to a distribution of resources that has desirable social welfare properties. The first section describes the basics of CE analysis and how it can be applied to aid decisions about the allocation of health resources. The paper then turns to the potential welfare economic foundations of CE analysis, and addresses specific issues in carrying out CE analysis, such as which costs to include, whose perspective matters in the analysis, and how health outcomes are measured. It demonstrates how a welfare economic foundation can help resolve ambiguities and uncertainties about the application of CE analysis. The paper also discusses the limitations of such an approach, which indeed reflect limitations of CE analysis as an analytic framework. Finally, it addresses unresolved issues such as the difficulties in using the results of CE analysis to make health policy at the societal or group level.Download Info
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7198.Length:
Date of creation: Jun 1999
Date of revision:
Handle: RePEc:nbr:nberwo:7198
Note: HC
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Related research
Keywords:Find related papers by JEL classification:
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
This paper has been announced in the following NEP Reports:
- NEP-ALL-1999-07-28 (All new papers)
References
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- Meltzer, David, 1997. "Accounting for future costs in medical cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 33-64, February.
- Kenkel, Don, 1997. "On valuing morbidity, cost-effectiveness analysis, and being rude," Journal of Health Economics, Elsevier, vol. 16(6), pages 749-757, December.
- 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.
- David Meltzer, 1997. "Accounting for Future Costs in Medical Cost-Effectiveness Analysis," NBER Working Papers 5946, National Bureau of Economic Research, Inc.
- 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.
- Birch, Stephen & Gafni, Amiram, 1994. "Cost-effectiveness ratios: in a league of their own," Health Policy, Elsevier, vol. 28(2), pages 133-141, May.
- Weinstein, Milton C. & Manning, Willard Jr., 1997. "Theoretical issues in cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 121-128, February.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Tomas J. Philipson & Anupam B. Jena, 2005.
"Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs,"
NBER Working Papers
11810, National Bureau of Economic Research, Inc.
- Tomas J. Philipson & Anupam B. Jena, 2006. "Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs," Forum for Health Economics & Policy, De Gruyter, vol. 0, pages 3.
- 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.
- Jena, Anupam B. & Philipson, Tomas J., 2008. "Cost-effectiveness analysis and innovation," Journal of Health Economics, Elsevier, vol. 27(5), pages 1224-1236, September.
- Tomas J. Philipson & Anupam B. Jena, 2006.
"Surplus Appropriation from R&D and Health Care Technology Assessment Procedures,"
NBER Working Papers
12016, National Bureau of Economic Research, Inc.
- Tomas J. Philipson & Anupam B. Jena, 2005. "Surplus Appropriation from R&D and Health Care Technology Assessment Procedures," Public Economics 0511021, EconWPA.
- Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010.
"Terminal Care and The Value of Life Near Its End,"
NBER Working Papers
15649, National Bureau of Economic Research, Inc.
- Tomas Philipson & Gary S. Becker & Dana Goldman & Kevin Murphy, 2010. "Terminal care and the value of life near its end," Working Papers 2010-005, Becker Friedman Institute for Research In Economics.
- Gary Becker & Kevin Murphy & Tomas Philipson, 2007.
"The Value of Life Near its End and Terminal Care,"
NBER Working Papers
13333, National Bureau of Economic Research, Inc.
- Gary Becker & Kevin Murphy & Tomas Philipson, 2007. "The Value of Life Near its End and Terminal Care," Levine's Working Paper Archive 122247000000001428, David K. Levine.
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