Estimating the marginal cost of a life year in Sweden’s public healthcare sector

Jonathan Siverskog () and Martin Henriksson
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Jonathan Siverskog: Linköping University
Martin Henriksson: Linköping University

The European Journal of Health Economics, 2019, vol. 20, issue 5, No 11, 762 pages

Abstract: Abstract Although cost-effectiveness analysis has a long tradition of supporting healthcare decision-making in Sweden, there are no clear criteria for when an intervention is considered too expensive. In particular, the opportunity cost of healthcare resource use in terms of health forgone has not been investigated empirically. In this work, we therefore seek to estimate the marginal cost of a life year in Sweden’s public healthcare sector using time series and panel data at the national and regional levels, respectively. We find that estimation using time series is unfeasible due to reversed causality. However, through panel instrumental variable estimation we are able to derive a marginal cost per life year of about SEK 370,000 (EUR 39,000). Although this estimate is in line with emerging evidence from other healthcare systems, it is associated with uncertainty, primarily due to the inherent difficulties of causal inference using aggregate observational data. The implications of these difficulties and related methodological issues are discussed.

Keywords: Opportunity cost; Threshold; Healthcare expenditure; Mortality; Life expectancy; Cost-effectiveness analysis (search for similar items in EconPapers)
JEL-codes: C32 C33 C36 I10 I18 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (6)

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DOI: 10.1007/s10198-019-01039-0

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