Understanding the risks associated with resource allocation decisions in health
An illustration of the importance of portfolio theory
Bibliographic Data
| ID | 20511323 |
|---|---|
| Authors | John F P Bridges (0000-0002-3082-5535, Johns Hopkins University, corresponding author), John Bridges (0000-0003-3874-7428) |
| Year | 2004 |
| Volume | 6 |
| Issue | 3 |
| Pages | 257-275 |
| Publication date | 2004-09-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Health Risk & Society (JOURNAL) |
| Journal identifiers | ISSN: 1369-8575 • E-ISSN: 1469-8331 |
| Publisher | Informa UK Limited (PUBLISHER • GB) |
| DOI | 10.1080/1369857042000275669 |
| OpenAlex | W2057282550 |
| Language | EN |
| Citations received | 4 |
While a number of health economists have recently applied portfolio theory to the economic evaluation of health care, its importance for resource allocation and medical decision making has not been well illustrated. Portfolio theory is concerned with optimal investment strategies, based on both return and risk, and demonstrates the potential benefits from pooling different investments into a single portfolio. Portfolio theory differs from other methods that focus on risk in medicine as it focuses on the variance around the mean for a single aggregated health outcome measure. This paper demonstrates the importance of using a portfolio theory framework when evaluating a number of health interventions from the perspective of a representative individual and it expands upon the existing literature on portfolio theory in several ways. First, it highlights the importance of distinguishing between risk and uncertainty. Next, it demonstrates that portfolio theory has implications for all types of statistical analysis of multiple interventions in medicine and not only for issues of resource allocation. Through a number of included simulations, this paper also illustrates the importance of accounting for covariance (the relationship between risks) and synergies (the relationship between outcomes). Finally, possible applications and limitations to implementing portfolio theory in medical and resource decision making are discussed. Keywords: RiskUncertaintyPortfolioEconomic Evaluation
Actuarial science · Application portfolio management · Business · Economics · Financial economics · Health care · Management · Management science · Microeconomics · Modern portfolio theory · Pooling · Portfolio · Project portfolio management · Psychological intervention · Resource allocation · Computer Science · Health Systems, Economic Evaluations, Quality of Life · Healthcare Policy and Management · Medicine
How health managers think about risk and the implications for portfolio theory in health systems
Optimal allocation of limited resources to biosecurity surveillance using a portfolio theory methodology
A Stochastic Economic Framework for Partitioning Biosecurity Surveillance Resources
Public preferences for the allocation of societal resources over different healthcare purposes
| Unique citing works | 4 |
|---|---|
| Citations per year | 0.24 |
| Citation span | 2009 - 2024 (16) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 4 |