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Threshold analysis in the presence of both the diagnostic and the therapeutic risk

Author

Listed:
  • Stefan Felder

    (University of Basel
    University of Duisburg-Essen)

  • Thomas Mayrhofer

    (Stralsund University of Applied Sciences)

Abstract

The well-established a priori probability of illness threshold in medical decision making, introduced by Pauker and Kassirer (N Engl J Med 293:229–234, 1975; N Engl J Med 302:1109–1117, 1980), involves the diagnostic risk only. We generalize the threshold analysis by adding the therapeutic risk, i.e., in accounting for the risk that a treatment might sometimes fail. We derive a priori probability of illness threshold as a function of the probability of successful treatment, as well as the inverted function, where the successful treatment probability threshold is a function of the a priori probability of illness. The thresholds in the general model are higher than those in the special cases where one of the two risks is absent. Applications show that the changes in the thresholds can be substantial. Our general model might explain empirical findings of much higher thresholds than the Pauker–Kassirer model suggests.

Suggested Citation

  • Stefan Felder & Thomas Mayrhofer, 2018. "Threshold analysis in the presence of both the diagnostic and the therapeutic risk," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(7), pages 1019-1026, September.
  • Handle: RePEc:spr:eujhec:v:19:y:2018:i:7:d:10.1007_s10198-017-0951-1
    DOI: 10.1007/s10198-017-0951-1
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    References listed on IDEAS

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    17. Felder, Stefan & Mayrhofer, Thomas, 2011. "Higher-Order Risk Preferences – Consequences for Test and Treatment Thresholds and Optimal Cutoffs," Ruhr Economic Papers 287, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

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    3. Christophe Courbage & Richard Peter, 2021. "On the effect of uncertainty on personal vaccination decisions," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2937-2942, November.

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    More about this item

    Keywords

    Decision thresholds; Diagnostics; Treatment; Diagnostic risk; Therapeutic risk;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I19 - Health, Education, and Welfare - - Health - - - Other

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