Cost-Effectiveness Threshold for Healthcare

Justification and Quantification

Bibliographic Data

ID13776190
AuthorsKonstantin Yanovskiy (0000-0002-7014-0522, Jerusalem College of Technology), Ori Levy (Jerusalem College of Technology), Ori N Levy (Jerusalem College of Technology), Yair Y Shaki (0000-0002-0933-9583, Jerusalem College of Technology), Avi Zigdon (0000-0003-1849-7206, Disaster Research Center, IL, Ariel University, Ariel, Israel, corresponding author), Yehoshua Socol (0000-0003-4167-248X, Jerusalem College of Technology, corresponding author)
Year2022
Volume59
Pages469580221081438-469580221081438
Publication date2022-01-01
Open AccessYes
TypeARTICLE
VenueINQUIRY The Journal of Health Care Organization Provision and Financing (JOURNAL)
Journal identifiersISSN: 0046-9580 • E-ISSN: 1945-7243
PublisherSAGE Publishing (PUBLISHER • US)
DOI10.1177/00469580221081438
PMID35549935
OpenAlexW4280569758
LanguageEN
Citations received1
References cited30

Every public health expenditure, including the one that saves lives or extends life expectancy of particular persons (target population), bears a cost. Although cost-effectiveness analysis (CEA) is routinely performed in health policy, ethical justification of CEA is rarely discussed. Also, there is neither consensus value nor even consensus method for determining cost-effectiveness threshold (CET) for life-extending measures. In this study, we performed ethical analysis of CEA by policy impact assessment based on connection of health and wealth (poorer people have statistically shorter life expectancies) and concluded that CEA is not only a practical but also an ethical necessity. To quantify CET, we used three independent methods: (1) literature survey of analyzing salaries in risky occupations, (2) utilizing Prospect Theory suggesting that people value their lives in monetary terms twice more than their lifetime earnings, and (3) literature survey of the U.S. current legal practice. To the best of our knowledge, nobody applied method (2) to determine CET. The three methods yielded rather similar results with CET about 1.0 ± 0.4 gross domestic product per capita (GDPpc) per quality-adjusted life-year. Therefore, a sum of not higher than 140% GDPpc is statistically sufficient to "purchase" an additional year of life-or, alternatively, to "rob" one year of life if taken away. Therefore, 140% GDP per capita per quality-adjusted life-year should be considered as the upper limit of prudent and ethically justified expenditure on life extension programs

Economics · Health care · Risk analysis (engineering · Computer Science · Health Systems, Economic Evaluations, Quality of Life · Healthcare cost, quality, practices · Healthcare Policy and Management · Medicine

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