Accounting for Future Costs in Medical Cost-Effectiveness Analysis

David Meltzer

No 5946, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Most medical cost-effectiveness analyses include future costs only for related illnesses but this approach is controversial. This paper demonstrates that cost-effectiveness analysis is consistent with lifetime utility maximization only if it includes all future medical and non-medical expenditures. Estimates of the magnitude of these future costs suggest that they may substantially alter both the absolute and relative cost-effectiveness of medical interventions intervention increases length of life more than quality of life. In older populations, current methods overstate the cost-effectiveness of interventions which extend life compared to" interventions which improve the quality of life.

JEL-codes: D61 I18 (search for similar items in EconPapers)
Date: 1997-02
Note: EH PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (122)

Published as Journal of Health Economics, Vol.16, no.1 (1997): 33-64.

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