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Endogenous Cost-Effectiveness Analysis in Health Care Technology Adoption

Author: Anupam Jena; Tomas Philipson
Publisher: Cambridge, Mass. National Bureau of Economic Research 2009.
Series: Working paper series (National Bureau of Economic Research), no. w15032.
Edition/Format:   eBook : Document : EnglishView all editions and formats
Summary:
Increased health care spending has been argued to be largely due to technological change. Cost-effectiveness analysis is the main tool used by private and public third-party payers to prioritize adoption of the new technologies responsible for this growth. However, such analysis by payers invariably reflects prices set by producers rather than resources used to produce treatments. This implies that the “costs” in  Read more...
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Details

Material Type: Document, Internet resource
Document Type: Internet Resource, Computer File
All Authors / Contributors: Anupam Jena; Tomas Philipson
OCLC Number: 1027350338
Notes: June 2009.
Description: 1 online resource.
Details: Mode of access: World Wide Web.
Series Title: Working paper series (National Bureau of Economic Research), no. w15032.
Responsibility: Anupam Jena, Tomas Philipson.

Abstract:

Increased health care spending has been argued to be largely due to technological change. Cost-effectiveness analysis is the main tool used by private and public third-party payers to prioritize adoption of the new technologies responsible for this growth. However, such analysis by payers invariably reflects prices set by producers rather than resources used to produce treatments. This implies that the “costs” in cost-effectiveness assessments depend on endogenous markups which are, in turn, influenced by demand factors of patients, doctors, and payers. Reimbursement policy based on endogenous cost-effectiveness levels may therefore bear little relationship to efficient use of scarce medical resources. Using data on technology appraisals in the United Kingdom, we test for conditions under which adoption based on endogenous cost-effectiveness may lead to adoption of more inefficient treatments in terms of resource use.

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