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Proceedings Paper

Cost-effectiveness analysis: problems and promise for evaluating medical technology
Author(s): Timothy R. Juday
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Paper Abstract

Although using limited financial resources in the most beneficial way is, in principle, a laudable goal, actually developing standards for measuring the cost-effectiveness of medical technologies and incorporating them into the coverage process is a much more difficult proposition. Important methodological difficulties include determining how to compare a technology to its leading alternative, defining costs, incorporating patient preferences, and defining health outcomes. In addition, more practical questions must be addressed. These questions include: who does the analysis? who makes the decisions? which technologies to evaluate? what resources are required? what is the political and legal environment? how much is a health outcome worth? The ultimate question that must be answered is what is a health outcome worth? Cost-effectiveness analysis cannot answer this question; it only enables comparison of cost- effectiveness ratios across technologies. In order to determine whether a technology should be covered, society or individual insurers must determine how much they are willing to pay for the health benefits. Conducting cost-effectiveness analyses will not remove the need to make difficult resource allocation decisions; however, explicitly examining the tradeoffs involved in these decisions should help to improve the process.

Paper Details

Date Published: 6 December 1994
PDF: 6 pages
Proc. SPIE 2307, Health Care Technology Policy I: The Role of Technology in the Cost of Health Care, (6 December 1994); doi: 10.1117/12.195481
Show Author Affiliations
Timothy R. Juday, Project HOPE Ctr. for Health Affairs (United States)

Published in SPIE Proceedings Vol. 2307:
Health Care Technology Policy I: The Role of Technology in the Cost of Health Care
Warren S. Grundfest M.D., Editor(s)

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