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Discounting in economic evaluations: stepping forward towards optimal decision rules
Author(s) -
Gravelle Hugh,
Brouwer Werner,
Niessen Louis,
Postma Maarten,
Rutten Frans
Publication year - 2007
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/hec.1168
Subject(s) - discounting , nice , excellence , value (mathematics) , actuarial science , economics , differential (mechanical device) , guideline , economic evaluation , quality adjusted life year , microeconomics , public economics , medicine , operations management , computer science , cost effectiveness , political science , finance , engineering , pathology , machine learning , law , programming language , aerospace engineering
Abstract The National Institute for Clinical Excellence has recently changed its guidelines on discounting costs and effects in economic evaluations. In common with most other regulatory bodies it now requires that health effects should be discounted at the same rate as costs. We show that the guideline leads to sub‐optimal decisions because it fails to account for the changing value of health. NICE (and other regulatory bodies) should either use differential discounting or stipulate how the changing value of health should otherwise be dealt with. We also show how binding health service budget constraints should be incorporated in evaluations. Copyright © 2006 John Wiley & Sons, Ltd.