Should Health Economic Evaluations Undertaken from a Societal Perspective Include Net Government Spending Multiplier Effects?

Jonathan Karnon () and Brita Pekarsky
Additional contact information
Jonathan Karnon: Flinders Health and Medical Research Institute
Brita Pekarsky: South Australian Ambulance Service

Applied Health Economics and Health Policy, 2020, vol. 18, issue 4, No 3, 467-475

Abstract: Abstract The fiscal multiplier represents the ratio of the change in national income to an associated increase in government spending. Fiscal multiplier effects are commonly estimated to justify options for government spending. Multiplier effects are not considered in economic evaluations of healthcare, but alternate forms of healthcare spending are expected to have varying multiplier effects. This paper describes the estimation and application of net government spending multiplier effects to two published economic evaluations. Negative net multiplier effects are estimated for an evaluated pharmaceutical for the treatment of stable cardiovascular disease, with a resulting increase in the published incremental cost per quality-adjusted life-year (QALY) gained from AU$31,244 to 47,311. Positive net multiplier effects are estimated for an evaluated healthcare delivery model for frail older people, with a resulting decrease in the published incremental cost per QALY gained from AU$8129 to 7669. The inclusion of net multiplier effects in economic evaluations undertaken from a societal perspective can have important effects on the estimated value of evaluated health technologies and services. The potential for government spending on healthcare to crowd out existing spending is considered low, but further investigation of crowding-out effects is warranted.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://link.springer.com/10.1007/s40258-020-00556-x Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:aphecp:v:18:y:2020:i:4:d:10.1007_s40258-020-00556-x

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40258

DOI: 10.1007/s40258-020-00556-x

Access Statistics for this article

Applied Health Economics and Health Policy is currently edited by Timothy Wrightson

More articles in Applied Health Economics and Health Policy from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().