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Cost - Effectiveness Analysis, Extended Dominance, and Ethics

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  • Scott B. Cantor

Abstract

The principle of extended dominance is applied in incremental cost-effectiveness analysis to eliminate from consideration strategies whose costs and benefits are improved by a mixed strategy of two other alternatives. Ethical considerations arise, however, in that equal care is not provided to all of the population. To explore these concerns, the authors establish a theoretical health care example with three diagnostic strategies. They demonstrate, both algebraically and geometrically, how to calculate the set of all possible mixed strategies that dominate the strategy eliminated by extended dominance. With the consideration of budget constraints, they define the "coefficient of inequity" as the minimum proportion of the pop ulation that would receive an inferior health care strategy if a mixed strategy were to be used instead of the dominated strategy. The implications of cost-effectiveness analysis are made explicit, revealing classic economic concerns about the tradeoff of equity and efficiency. Key words: cost-effectiveness analysis; extended dominance; economics; ethics. (Med Decis Making 1994;14:259-265)

Suggested Citation

  • Scott B. Cantor, 1994. "Cost - Effectiveness Analysis, Extended Dominance, and Ethics," Medical Decision Making, , vol. 14(3), pages 259-265, August.
    • Handle: RePEc:sae:medema:v:14:y:1994:i:3:p:259-265
    DOI: 10.1177/0272989X9401400308
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    References listed on IDEAS

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    1. Andrew Walker & David K. Whynes, 1992. "Filtering Strategies in Mass Population Screening for Colorectal Cancer," Medical Decision Making, , vol. 12(1), pages 2-7, February.
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    1. Constanza L Vargas & Manuel A Espinoza & Andrés Giglio & Alejandro Soza, 2015. "Cost Effectiveness of Daclatasvir/Asunaprevir Versus Peginterferon/Ribavirin and Protease Inhibitors for the Treatment of Hepatitis c Genotype 1b Naïve Patients in Chile," PLOS ONE, Public Library of Science, vol. 10(11), pages 1-16, November.
    2. Eugene M. Laska & Morris Meisner & Carole Siegel & Joseph Wanderling, 2002. "Statistical determination of cost‐effectiveness frontier based on net health benefits," Health Economics, John Wiley & Sons, Ltd., vol. 11(3), pages 249-264, April.
    3. Scott B. Cantor, 2004. "Clinical Applications in the Decision Analysis Literature," Decision Analysis, INFORMS, vol. 1(1), pages 23-25, March.
    4. Elamin H. Elbasha, 2005. "Risk aversion and uncertainty in cost‐effectiveness analysis: the expected‐utility, moment‐generating function approach," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 457-470, May.
    5. Pinkerton, Steven D. & Johnson-Masotti, Ana P. & Derse, Arthur & Layde, Peter M., 2002. "Ethical issues in cost-effectiveness analysis," Evaluation and Program Planning, Elsevier, vol. 25(1), pages 71-83, February.
    6. Lisa Boden & Ian Handel & Neil Hawkins & Fiona Houston & Helen Fryer & Rowland Kao, 2012. "An Economic Evaluation of Preclinical Testing Strategies Compared to the Compulsory Scrapie Flock Scheme in the Control of Classical Scrapie," PLOS ONE, Public Library of Science, vol. 7(3), pages 1-8, March.
    7. Elamin H. Elbasha & Mark L. Messonnier, 2004. "Cost‐effectiveness analysis and health care resource allocation: decision rules under variable returns to scale," Health Economics, John Wiley & Sons, Ltd., vol. 13(1), pages 21-35, January.

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