Lomas, James orcid.org/0000-0002-2478-7018, Claxton, Karl orcid.org/0000-0003-2002-4694, Martin, Stephen et al. (1 more author) (2018) Resolving the ‘cost-effective but unaffordable’ ‘paradox’: estimating the health opportunity costs of non-marginal budget impacts:Estimating the Health Opportunity Costs of Nonmarginal Budget Impacts. Value in Health. pp. 266-275. ISSN 1524-4733
Abstract
Considering whether or not a proposed investment (an intervention, technology, or program of care) is affordable is really asking whether the benefits it offers are greater than its opportunity cost. To say that an investment is cost-effective but not affordable must mean that the (implicit or explicit) "threshold" used to judge cost-effectiveness does not reflect the scale and value of the opportunity costs. Existing empirical estimates of health opportunity costs are based on cross-sectional variation in expenditure and mortality outcomes by program budget categories (PBCs) and do not reflect the likely effect of nonmarginal budget impacts on health opportunity costs. The UK Department of Health regularly updates the needs-based target allocation of resources to local areas of the National Health Service (NHS), creating two subgroups of local areas (those under target allocation and those over). These data provide the opportunity to explore how the effects of changes in health care expenditure differ with available resources. We use 2008-2009 data to evaluate two econometric approaches to estimation and explore a range of criteria for accepting subgroup specific effects for differences in expenditure and outcome elasticities across the 23 PBCs. Our results indicate that health opportunity costs arising from an investment imposing net increases in expenditure are underestimated unless account is taken of likely nonmarginal effects. They also indicate the benefits (reduced health opportunity costs or increased value-based price of a technology) of being able to "smooth" these nonmarginal budget impacts by health care systems borrowing against future budgets or from manufacturers offering "mortgage" type arrangements.
Metadata
Item Type: | Article |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | © 2017, International Society for Pharmacoeconomics and Outcomes Research (ISPOR). Published by Elsevier Inc. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. |
Keywords: | Journal Article |
Dates: |
|
Institution: | The University of York |
Academic Units: | The University of York > Faculty of Social Sciences (York) > Centre for Health Economics (York) The University of York > Faculty of Social Sciences (York) > Economics and Related Studies (York) |
Depositing User: | Pure (York) |
Date Deposited: | 08 Jan 2018 10:50 |
Last Modified: | 16 Oct 2024 14:15 |
Published Version: | https://doi.org/10.1016/j.jval.2017.10.006 |
Status: | Published |
Refereed: | Yes |
Identification Number: | 10.1016/j.jval.2017.10.006 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:125965 |
Download
Filename: author_accepted_version_nonmarg.docx
Description: author accepted version nonmarg
Licence: CC-BY-NC-ND 2.5