Ratio-based and net benefit-based approaches to health care resource allocation: proofs of optimality and equivalence
Both incremental cost-effectiveness ratios and net benefits have been proposed as summary measures for use in cost-effectiveness analyses. We present a unifying proof of the optimality and equivalence of ICER- and net benefit-based approaches to the health resource allocation problem, including both 'fixed budget' and 'fixed price' decision rules. If internally consistent willingness-to-pay values are used, ratio- and net benefit-based decision rules identify the same optimal allocation. Because they have identical resource allocation implications, use of one or other of the two approaches must be based on other criteria, such as their behaviour under conditions of uncertainty. Copyright © 1999 John Wiley & Sons, Ltd.
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Volume (Year): 8 (1999)
Issue (Month): 2 ()
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- Weinstein, Milton & Zeckhauser, Richard, 1973. "Critical ratios and efficient allocation," Journal of Public Economics, Elsevier, vol. 2(2), pages 147-157, April.
- Meltzer, David, 1997. "Accounting for future costs in medical cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 33-64, February.
- Weinstein, Milton C. & Manning, Willard Jr., 1997. "Theoretical issues in cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 121-128, February.
- Stinnett, Aaron A. & Paltiel, A. David, 1996. "Mathematical programming for the efficient allocation of health care resources," Journal of Health Economics, Elsevier, vol. 15(5), pages 641-653, October.
- Tambour, Magnus & Zethraeus, Niklas & Johannesson, Magnus, 1997. "A Note on Confidence Intervals in Cost-Effectiveness Analysis," SSE/EFI Working Paper Series in Economics and Finance 181, Stockholm School of Economics.
- Johannesson, Magnus & Weinstein, Milton C., 1993. "On the decision rules of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 12(4), pages 459-467, December.
- David Meltzer, 1997. "Accounting for Future Costs in Medical Cost-Effectiveness Analysis," NBER Working Papers 5946, National Bureau of Economic Research, Inc.
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