Accounting for Future Costs in Medical Cost-Effectiveness Analysis

41 Pages Posted: 9 Jul 2000 Last revised: 2 Oct 2022

See all articles by David Meltzer

David Meltzer

University of Chicago - Departments of Medicine and Economics, and Harris School

Date Written: February 1997

Abstract

Most medical cost-effectiveness analyses include future costs only for related illnesses but this approach is controversial. This paper demonstrates that cost-effectiveness analysis is consistent with lifetime utility maximization only if it includes all future medical and non-medical expenditures. Estimates of the magnitude of these future costs suggest that they may substantially alter both the absolute and relative cost-effectiveness of medical interventions intervention increases length of life more than quality of life. In older populations, current methods overstate the cost-effectiveness of interventions which extend life compared to" interventions which improve the quality of life.

Suggested Citation

Meltzer, David Owen, Accounting for Future Costs in Medical Cost-Effectiveness Analysis (February 1997). NBER Working Paper No. w5946, Available at SSRN: https://ssrn.com/abstract=225726

David Owen Meltzer (Contact Author)

University of Chicago - Departments of Medicine and Economics, and Harris School ( email )

5841 S. Maryland Ave.
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Chicago, IL 60637
United States

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