Posted by Michael Wonder on 22 Mar 2018
Resolving the “cost-effective but unaffordable” paradox: estimating the health opportunity costs of non-marginal budget impacts
22 March 2018 - Considering whether or not a proposed investment (an intervention, technology, or program of care) is affordable is really asking whether the benefits it offers are greater than its opportunity cost.
To say that an investment is cost-effective but not affordable must mean that the (implicit or explicit) “threshold” used to judge cost-effectiveness does not reflect the scale and value of the opportunity costs.
Existing empirical estimates of health opportunity costs are based on cross-sectional variation in expenditure and mortality outcomes by program budget categories and do not reflect the likely effect of non-marginal budget impacts on health opportunity costs.
