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Opportunity costs and uncertainty in the economic evaluation of health care interventions

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  • P. Sendi
  • A. Gafni
  • S. Birch

Abstract

Considerable methodological research has been conducted on handling uncertainty in cost‐effectiveness analysis. The current literature suggests the concepts of net health benefits and cost‐effectiveness accepta‐bility curves to circumvent the technical shortcomings of cost‐effectiveness ratio statistics. However, these approaches do not provide a solution for the inherent problem that the threshold cost‐effectiveness ratio itself is unknown. The authors suggest analysing uncertainty in cost‐effectiveness analysis by directly addressing the concept of opportunity costs using the decision rule described by Birch and Gafni (1992) and introduce a new graphical framework (the ‘decision making plane’) for communicating with policy makers. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • P. Sendi & A. Gafni & S. Birch, 2002. "Opportunity costs and uncertainty in the economic evaluation of health care interventions," Health Economics, John Wiley & Sons, Ltd., vol. 11(1), pages 23-31, January.
  • Handle: RePEc:wly:hlthec:v:11:y:2002:i:1:p:23-31
    DOI: 10.1002/hec.641
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    References listed on IDEAS

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    Cited by:

    1. Stephen Birch & Amiram Gafni, 2012. "Decision Rules in Economic Evaluation Revisited," Chapters, in: Andrew M. Jones (ed.), The Elgar Companion to Health Economics, Second Edition, chapter 49, Edward Elgar Publishing.
    2. Raymond C. W. Hutubessy & Louis W. Niessen & Rob F. Dijkstra & Ton F. Casparie & Frans F. Rutten, 2005. "Stochastic league tables: an application to diabetes interventions in the Netherlands," Health Economics, John Wiley & Sons, Ltd., vol. 14(5), pages 445-455, May.
    3. A. Gafni & S. D. Walter & S. Birch & P. Sendi, 2008. "An opportunity cost approach to sample size calculation in cost‐effectiveness analysis," Health Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 99-107, January.
    4. Rocco Palumbo, 2017. "Toward a new conceptualization of health care services to inspire public health. Public national health service as a “common pool of resources”," International Review on Public and Nonprofit Marketing, Springer;International Association of Public and Non-Profit Marketing, vol. 14(3), pages 271-287, September.
    5. Steven Simoens, 2010. "Health Economic Assessment: Cost-Effectiveness Thresholds and Other Decision Criteria," IJERPH, MDPI, vol. 7(4), pages 1-6, April.
    6. Amiram Gafni & Stephen Walter & Stephen Birch, 2013. "Uncertainty And The Decision Maker: Assessing And Managing The Risk Of Undesirable Outcomes," Health Economics, John Wiley & Sons, Ltd., vol. 22(11), pages 1287-1294, November.
    7. Gafni, Amiram & Birch, Stephen, 2006. "Incremental cost-effectiveness ratios (ICERs): The silence of the lambda," Social Science & Medicine, Elsevier, vol. 62(9), pages 2091-2100, May.
    8. Amiram Gafni, 2006. "Economic Evaluation of Health-care Programmes: Is CEA Better than CBA?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 34(3), pages 407-418, July.
    9. Rob M.P.M. Baltussen & Raymond C.W. Hutubessy & Jan J. Barendregt & David B. Evans & Christopher J.L. Murray, 2003. "Formal response to ‘Determining the optimal combinations of mutually exclusive interventions: a response to Hutubessy and colleagues’," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 163-164, February.
    10. Baines, Darrin & Disegna, Marta & Hartwell, Christopher A., 2021. "Portfolio frontier analysis: Applying mean-variance analysis to health technology assessment for health systems under pressure," Social Science & Medicine, Elsevier, vol. 276(C).
    11. 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.
    12. Nicolas Krucien & Nathalie Pelletier-Fleury & Amiram Gafni, 2019. "Measuring Public Preferences for Health Outcomes and Expenditures in a Context of Healthcare Resource Re-Allocation," PharmacoEconomics, Springer, vol. 37(3), pages 407-417, March.
    13. Adang, Eddy & Voordijk, Leo & Jan van der Wilt, Gert & Ament, Andre, 2005. "Cost-effectiveness analysis in relation to budgetary constraints and reallocative restrictions," Health Policy, Elsevier, vol. 74(2), pages 146-156, October.
    14. Ahmet Kara, 2013. "A low quality–high cost–low satisfaction trap in public health care: a model and an efficiency-quality-welfare improving stochastic resolution," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(4), pages 2081-2093, June.
    15. F. J. Vázquez‐Polo & M. A. Negrín Hernández & B. González López‐Valcárcel, 2005. "Using covariates to reduce uncertainty in the economic evaluation of clinical trial data," Health Economics, John Wiley & Sons, Ltd., vol. 14(6), pages 545-557, June.
    16. Krucien, Nicolas & Heidenreich, Sebastian & Gafni, Amiram & Pelletier-Fleury, Nathalie, 2020. "Measuring public preferences in France for potential consequences stemming from re-allocation of healthcare resources," Social Science & Medicine, Elsevier, vol. 246(C).

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