Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Robert J. Brent

Cost–benefit analysis is the only method of economic evaluation that can effectively indicate whether a health care treatment or intervention is worthwhile. In this thoroughly updated and revised second edition, Robert Brent expands the scope of the field by including the latest concepts and applications throughout all regions of the world. This book attempts to strengthen the link between cost–benefit analysis and the mainstream health care evaluation field, which is dominated by non-economists. The need to build a bridge between the two is more important than ever before, as the general understanding of cost-benefit analysis appears to have regressed.

Chapter 7: Further issues of cost-effectiveness analysis

Robert J. Brent

Subjects: economics and finance, health policy and economics, valuation, environment, valuation, social policy and sociology, health policy and economics


Although economists are unanimous in adopting discounting for costs, there is no such widespread agreement in the health care field for discounting effects. If costs are discounted and effects are left undiscounted, obviously C/E ratios would be radically altered. Even when discounting of effects is accepted, not everyone agrees that the discount rate on effects should be the same as that used for costs. The second section addresses these issues. From there we proceed to a second main theme, that is, how do CEAs need to be conducted and interpreted when the values that we use for C and E are average ones that may come from a sample with a large amount of sampling variation and hence great uncertainty? Our first task is to cover some background issues concerning these two themes.

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