Accounting for Future Costs in Medical Cost-Effectiveness Analysis
41 Pages Posted: 9 Jul 2000 Last revised: 2 Oct 2022
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.
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