Unbiased Analysis of Today's Healthcare Issues
Discount rates are commonly used in the world of finance. Would you rather have $1 today or $1 in 5 years? Most people would prefer $1 today. For instance, if you had $1 today and put it in a bank account, it would be worth more than $1 in 5 years. Thus, when making financial…
This question seems simple, but answering the key factors that impact your happiness is complex. Is happiness based on your personal situation (e.g., family, job, income, health) measured in an absolute sense or relative to others? If measured in a relative sense, what reference point is used? One approach to measuring your life satisfaction is…
Tyler Cowen has an interesting interview with Harvard health economist David Cutler speaking about (what else?) health economics. Below is an excerpt: CUTLER: Everything that we know in healthcare is that people have difficulty choosing on the basis of price and quality. It goes back a little bit to some of the behavioral issues that…
I have written previously about the need for distributional cost-effectiveness analysis (DCEA) which would increase the value of treatments who improve the health for individuals who currently have the worst expected quality-adjusted life expectancy (QALE). I’ve written about this in AJMC and Health Affairs among other places. One key question many individuals may have is…
An interesting result from Courbage and Peter (2021): …uncertainty about the probability of side effects and the efficacy of the vaccine always reduces take-up under ambiguity aversion. However, uncertainty about the underlying disease, being the probability of sickness or the probability of a severe course of disease, may either encourage or discourage vaccination. Because vaccination…
COVID-19 has increased job insecurity for many workers around the world. At the same time, after vaccinations, job growth is slowly coming back. Will increased job security undo deleterious impacts of previous job insecurity worries? An interesting finding from Lepinteur (2021) weighs in on the topic: Is workers’ health more sensitive to losses than gains…
Joe Newhouse has a nice overview article on the value of preventive care in the latest edition of the Journal of Economic Literature. He makes three key points: Preventive care may save money, but often does not. That does not mean that they are not high value. Preventive care should be seen as an insurance…
The cost to bring a drug to market is a hotly debated topic. The costs include not only the costs for basic science and clinical trials. However, one must also take into account the cost of capital (since most cost are incurred up front, but revenue begins only after drug approval) and the likelihood of…
Quality of care is difficult to measure. Even if you had a perfect measure of quality in terms of health outcomes, risk adjustment is imperfect. For instance, academic medical centers are often assumed to have high quality, but actual outcomes observed in the data may not be that good if they also receive the sickest,…
Standard cost-effectiveness analysis assumes that any gain in quality-adjusted life years (QALYs) should be valued equally. This does not sound unreasonable, but is it true in practice? Consider two potential violations of constant value of QALY gains: scope insensitivity and severity independence. I define each of these below: Scope insensitivity. This assumes that individuals value…