Future Costs, Fixed Healthcare Budgets, and the Decision Rules of Cost‐Effectiveness Analysis

Pieter van Baal, David Meltzer and Werner Brouwer

Health Economics, 2016, vol. 25, issue 2, 237-248

Abstract: Life‐saving medical technologies result in additional demand for health care due to increased life expectancy. However, most economic evaluations do not include all medical costs that may result from this additional demand in health care and include only future costs of related illnesses. Although there has been much debate regarding the question to which extent future costs should be included from a societal perspective, the appropriate role of future medical costs in the widely adopted but more narrow healthcare perspective has been neglected. Using a theoretical model, we demonstrate that optimal decision rules for cost‐effectiveness analyses assuming fixed healthcare budgets dictate that future costs of both related and unrelated medical care should be included. Practical relevance of including the costs of future unrelated medical care is illustrated using the example of transcatheter aortic valve implantation. Our findings suggest that guidelines should prescribe inclusion of these costs. Copyright © 2014 John Wiley & Sons, Ltd.

Date: 2016
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https://doi.org/10.1002/hec.3138

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Persistent link: https://EconPapers.repec.org/RePEc:wly:hlthec:v:25:y:2016:i:2:p:237-248

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