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Longevity bias in cost-effectiveness analysis

✍ Scribed by Liqun Liu; Andrew J. Rettenmaier; Thomas R. Saving

Publisher
John Wiley and Sons
Year
2008
Tongue
English
Weight
126 KB
Volume
17
Category
Article
ISSN
1057-9230

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✦ Synopsis

Abstract

We use a simple lifetime utility maximization model to study the problem of medical resource allocation. This model leads to a welfare specification with a QALY (quality‐adjusted life‐year) component that captures an individual's preferences over both life expectancy and health status. The goal of medical cost‐effectiveness analysis (CEA) is characterized as maximizing the QALY measure for a given total medical expenditure. We show that the CEA with such a goal has a longevity bias: the CEA‐based division of a given total medical expenditure between extending life and improving health gives the former a larger share than is called for by welfare maximization. Copyright © 2007 John Wiley & Sons, Ltd.

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