Treatment Decisions

Stefan Felder () and Thomas Mayrhofer ()
Additional contact information
Stefan Felder: University of Basel
Thomas Mayrhofer: Stralsund University of Applied Sciences

Chapter Chapter 4 in Medical Decision Making, 2022, pp 53-85 from Springer

Abstract: Abstract We present the cornerstone of medical decision making under uncertainty. If no diagnostic test is available, the physician faces the risk of a misdiagnosis: They may either treat a patient who is healthy or fail to treat one who is sick. We assume that the physician knows the patient’s utility gain from treatment in the sick state and the patient’s utility loss from treatment in the healthy state. This allows us to derive the treatment threshold, which identifies the prior probability of disease at which the physician is indifferent between treatment and no treatment. This threshold provides for a decision rule: Treat if the prior probability of disease is above the threshold, do not treat if it is below. We show that a risk-averse physician treats the patient at a lower prior probability of disease than a risk-neutral physician because the risk-averse physician values the utility gain to the sick more and the utility loss to the healthy less than the risk-neutral physician. We also analyze the therapeutic risk (i.e., the risk that treatment fails) and derive the threshold of the probability of success above which the physician decides to treat the patient. In contrast to the diagnostic risk, the treatment threshold is higher for a risk-averse physician than for a risk-neutral one. Finally, we combine the diagnostic risk and the therapeutic risk and study the effects on the thresholds if both risks are considered simultaneously.

Date: 2022
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:sprchp:978-3-662-64654-0_4

Ordering information: This item can be ordered from
http://www.springer.com/9783662646540

DOI: 10.1007/978-3-662-64654-0_4

Access Statistics for this chapter

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