The Value of Health in a Cost-Effectiveness Analysis: Theory Versus Practice

Bram Wouterse (), Pieter Baal, Matthijs Versteegh and Werner Brouwer
Additional contact information
Bram Wouterse: Erasmus University Rotterdam
Pieter Baal: Erasmus University Rotterdam
Matthijs Versteegh: Erasmus University Rotterdam

PharmacoEconomics, 2023, vol. 41, issue 6, No 1, 607-617

Abstract: Abstract A cost-effectiveness analysis has become an important method to inform allocation decisions and reimbursement of new technologies in healthcare. A cost-effectiveness analysis requires a threshold to which the cost effectiveness of a new intervention can be compared. In principle, the threshold ought to reflect opportunity costs of reimbursing a new technology. In this paper, we contrast the practical use of this threshold within a CEA with its theoretical underpinnings. We argue that several assumptions behind the theoretical models underlying this threshold are violated in practice. This implies that a simple application of the decision rules of CEA using a single estimate of the threshold does not necessarily improve population health or societal welfare. Conceptual differences regarding the interpretation of the threshold, widely varying estimates of its value, and an inconsistent use within and outside the healthcare sector are important challenges in informing policy makers on optimal reimbursement decision and setting appropriate healthcare budgets.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://link.springer.com/10.1007/s40273-023-01265-8 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:pharme:v:41:y:2023:i:6:d:10.1007_s40273-023-01265-8

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40273

DOI: 10.1007/s40273-023-01265-8

Access Statistics for this article

PharmacoEconomics is currently edited by Timothy Wrightson and Christopher I. Carswell

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