IDEAS home Printed from https://ideas.repec.org/a/wly/hlthec/v16y2007i3p307-317.html
   My bibliography  Save this article

Discounting in economic evaluations: stepping forward towards optimal decision rules

Author

Listed:
  • Hugh Gravelle
  • Werner Brouwer
  • Louis Niessen
  • Maarten Postma
  • Frans Rutten

Abstract

The National Institute for Clinical Excellence has recently changed its guidelines on discounting costs and effects in economic evaluations. In common with most other regulatory bodies it now requires that health effects should be discounted at the same rate as costs. We show that the guideline leads to sub‐optimal decisions because it fails to account for the changing value of health. NICE (and other regulatory bodies) should either use differential discounting or stipulate how the changing value of health should otherwise be dealt with. We also show how binding health service budget constraints should be incorporated in evaluations. Copyright © 2006 John Wiley & Sons, Ltd.

Suggested Citation

  • Hugh Gravelle & Werner Brouwer & Louis Niessen & Maarten Postma & Frans Rutten, 2007. "Discounting in economic evaluations: stepping forward towards optimal decision rules," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 307-317, March.
    • Handle: RePEc:wly:hlthec:v:16:y:2007:i:3:p:307-317
    DOI: 10.1002/hec.1168
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/hec.1168
    Download Restriction: no
    File URL: https://libkey.io/10.1002/hec.1168?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Hugh Gravelle & Dave Smith, 2001. "Discounting for health effects in cost–benefit and cost‐effectiveness analysis," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 587-599, October.
    2. Ben A. Van Hout, 1998. "Discounting costs and effects: a reconsideration," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 581-594, November.
    3. Karl Claxton & Mark Sculpher & Anthony Culyer & Chris McCabe & Andrew Briggs & Ron Akehurst & Martin Buxton & John Brazier, 2006. "Discounting and cost‐effectiveness in NICE – stepping back to sort out a confusion," Health Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 1-4, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mareike Schad & Jürgen John, 2012. "Towards a social discount rate for the economic evaluation of health technologies in Germany: an exploratory analysis," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(2), pages 127-144, April.
    2. Arthur E. Attema & Werner B. F. Brouwer & Karl Claxton, 2018. "Discounting in Economic Evaluations," PharmacoEconomics, Springer, vol. 36(7), pages 745-758, July.
    3. Ana Bobinac & Werner Brouwer & Job van Exel, 2011. "Discounting future health gains: an empirical enquiry into the influence of growing life expectancy," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 111-119, January.
    4. Kontodimopoulos, Nick & Niakas, Dimitris, 2008. "An estimate of lifelong costs and QALYs in renal replacement therapy based on patients' life expectancy," Health Policy, Elsevier, vol. 86(1), pages 85-96, April.
    5. Arthur E. Attema & Han Bleichrodt & Olivier L’Haridon & Patrick Peretti-Watel & Valérie Seror, 2018. "Discounting health and money: New evidence using a more robust method," Journal of Risk and Uncertainty, Springer, vol. 56(2), pages 117-140, April.
    6. Cairns, John, 2006. "Developments in discounting: With special reference to future health events," Resource and Energy Economics, Elsevier, vol. 28(3), pages 282-297, August.
    7. Erik Nord, 2011. "Discounting future health benefits: the poverty of consistency arguments," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 16-26, January.
    8. Karl Claxton & Mike Paulden & Hugh Gravelle & Werner Brouwer & Anthony J. Culyer, 2011. "Discounting and decision making in the economic evaluation of health‐care technologies," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 2-15, January.
    9. M. Parouty & H. Le & D. Krooshof & M. Postma, 2014. "Differential Time Preferences for Money and Quality of Life," PharmacoEconomics, Springer, vol. 32(4), pages 411-419, April.
    10. Steve Harris & Jan Weinzettel & Gregor Levin, 2020. "Implications of Low Carbon City Sustainability Strategies for 2050," Sustainability, MDPI, vol. 12(13), pages 1-23, July.
    11. Stephen Martin & Peter C Smith & Sheila Leatherman, 2006. "Value for money in the English NHS: Summary of the evidence," Working Papers 018cherp, Centre for Health Economics, University of York.
    12. John Hutton, 2012. "‘Health Economics’ and the evolution of economic evaluation of health technologies," Health Economics, John Wiley & Sons, Ltd., vol. 21(1), pages 13-18, January.
    13. Hugh Gravelle & Dave Smith, 2001. "Discounting for health effects in cost–benefit and cost‐effectiveness analysis," Health Economics, John Wiley & Sons, Ltd., vol. 10(7), pages 587-599, October.
    14. Gretchen B. Chapman, 2002. "Your Money or Your Health: Time Preferences and Trading Money for Health," Medical Decision Making, , vol. 22(5), pages 410-416, October.
    15. Pieter H. M. van Baal & Talitha L. Feenstra & Johan J. Polder & Rudolf T. Hoogenveen & Werner B. F. Brouwer, 2011. "Economic evaluation and the postponement of health care costs," Health Economics, John Wiley & Sons, Ltd., vol. 20(4), pages 432-445, April.
    16. Angelina Lazaro & Ramon Barberan & Encarnacion Rubio, 2001. "Private and social time preferences for health and money: an empirical estimation," Health Economics, John Wiley & Sons, Ltd., vol. 10(4), pages 351-356, June.
    17. Olivier Chanel & Pascale Scapecchi & Jean-Christophe Vergnaud, 2006. "How to correctly assess mortality benefits in public policies," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 49(5), pages 759-776.
    18. Fred Hellinger, 2015. "Measuring the Cost Effectiveness of HIV Prevention Interventions in the US: Pitfalls and Problems," Applied Health Economics and Health Policy, Springer, vol. 13(2), pages 129-133, April.
    19. Ben Groom & Cameron Hepburn & Phoebe Koundouri & David Pearce, 2005. "Declining Discount Rates: The Long and the Short of it," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 445-493, December.
    20. Rutten, Frans & Bleichrodt, Han & Brouwer, Werner & Koopmanschap, Marc & Schut, Erik, 2001. "Handbook of Health Economics," Journal of Health Economics, Elsevier, vol. 20(5), pages 855-879, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:hlthec:v:16:y:2007:i:3:p:307-317. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/cgi-bin/jhome/5749 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.