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Discounting in economic evaluations: stepping forward towards optimal decision rules

  • Hugh Gravelle

    (National Primary Care Research and Development Centre (NPCRDC), Centre for Health Economics, University of York, UK)

  • Werner Brouwer

    (Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre | Erasmus University Rotterdam, The Netherlands)

  • Louis Niessen

    (Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre | Erasmus University Rotterdam, The Netherlands)

  • Maarten Postma

    (Groningen University Institute for Drug Exploration | University of Groningen Research Institute of Pharmacy (GUIDE|GRIP), The Netherlands)

  • Frans Rutten

    (Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre | Erasmus University Rotterdam, The Netherlands)

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.

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File URL: http://hdl.handle.net/10.1002/hec.1168
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Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 16 (2007)
Issue (Month): 3 ()
Pages: 307-317

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Handle: RePEc:wly:hlthec:v:16:y:2007:i:3:p:307-317
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. 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.
  2. 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.
  3. Ben A. Van Hout, 1998. "Discounting costs and effects: a reconsideration," Health Economics, John Wiley & Sons, Ltd., vol. 7(7), pages 581-594.
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