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

Bram Wouterse*, Pieter van Baal, Matthijs Versteegh, Werner Brouwer

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

4 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)607-617
Number of pages11
JournalPharmacoEconomics
Volume41
Issue number6
Early online date18 Apr 2023
DOIs
Publication statusPublished - Jun 2023

Bibliographical note

Funding Information:
This study was sponsored by AstraZeneca and Amgen through an unrestricted research grant. The grant agreement guaranteed academic independence and the right to publish research results without interference of the sponsor.

Publisher Copyright:
© 2023, The Author(s).

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