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A new approach for estimating the indirect costs of disease, which explicitly considers economic circumstances that limit production losses due to disease, is presented (the friction cost method). For the Netherlands the short-term friction costs in 1990 amount to 1.5-2.5% of net national income (NNI), depending on the extent to which short-term absence from work induces production loss and costs. The medium-term macro-economic consequences of absence from work and disability reduce NNI by an additional 0.8%. These estimates are considerably lower than estimates based on the traditional human capital approach, but they better reflect the economic impact of illness. [ABSTRACT FROM AUTHOR]

The article describes the nature of medium term consequences and the method of health estimation using Dutch macro-economic sectoral models. These models are reply to comments given by authors Magnus Johanneson and Göran Karlsson on indirect costs estimation of medical care. The controversy arises with respect to long term absence, disability and mortality of their comments. Johanneson and Karlsson argue that no indirect costs of disease will occur after the friction period. They focus on the role of internal labour reserves and the role of unemployment in their method. They find indirect costs much smaller than estimates based on human capital approach. The article presents the model to advise Dutch government and parliament on short term and medium term economic development. The economic aspects of medium term concern the influence of absence in work on labour productivity, labour costs per unit of output and the degree of international competitiveness. This also holds for the impact of disability premiums on labour supply and labour costs.

The aim of this study was to elicit the individual willingness to pay (WTP) for a quality-adjusted life-year (QALY). In a Web-based questionnaire containing contingent valuation exercises, respondents valued health changes in five scenarios. In each scenario, the respondents first valued two health states on a visual analog scale (VAS) and expressed their WTP for avoiding a decline in health from the better health state to the worse, using a payment scale followed by a bounded open contingent valuation question. WTP per QALY was calculated for QALY gains calculated using VAS valuations, as well as the Dutch EQ-5D tariffs, the two steps in the WTP estimations and each scenario. Heterogeneity in WTP per QALY ratios was examined from the perspective of: 1) household income; and 2) the level of certainty in WTP indicated by respondents. Theoretical validity was analyzed using clustered multivariate regressions. A total of 1091 respondents, representative of the Dutch population, participated in the survey. Mean WTP per QALY was €12,900 based on VAS valuations, and €24,500 based on the Dutch EuroQoL tariffs. WTP per QALY was strongly associated with income, varying from €5000 in the lowest to €75,400 in the highest income group. Respondents indicating higher certainty exhibited marginally higher WTP. Regression analyses confirmed expected relations between WTP per QALY, income, and other personal characteristics. Individual WTP per QALY values elicited in this study are similar to those found in comparable studies. The use of individual valuations in social decision-making deserves attention, however. [ABSTRACT FROM AUTHOR]

Portfolio theory has been suggested as a means to improve the risk–return characteristics of investments in health-care programs through diversification when costs and effects are uncertain. This approach is based on the assumption that the investment proportions are not subject to uncertainty and that the budget can be invested in toto in health-care programs.In the present paper we develop an algorithm that accounts for the fact that investment proportions in health-care programs may be uncertain (due to the uncertainty associated with costs) and limited (due to the size of the programs). The initial budget allocation across programs may therefore be revised at the end of the investment period to cover the extra costs of some programs with the leftover budget of other programs in the portfolio.Once the total budget is equivalent to or exceeds the expected costs of the programs in the portfolio, the initial budget allocation policy does not impact the risk–return characteristics of the combined portfolio, i.e., there is no benefit from diversification anymore.The applicability of portfolio methods to improve the risk–return characteristics of investments in health care is limited to situations where the available budget is much smaller than the expected costs of the programs to be funded. [ABSTRACT FROM AUTHOR]

Objectives: Type 2 diabetes (T2D) treatment involves complex interactions between biological, psychological, and behavioral factors of care, requiring multifaceted efforts in clinical practice and disease management to reduce health and economic burdens. We aimed to quantify correlations among these factors and characterize their level of inclusion in economic analyses that are part of informed medical decision-making. Methods: A comprehensive, stepwise systematic literature review was performed on published articles dated 1993 to 2008 using medical subject heading and keyword searches in electronic reference libraries. Data were collected using standardized techniques and were analyzed descriptively. Results: A total of 97 articles fulfilling all inclusion criteria were reviewed, including 16 on economic models (17% of articles). Most studies were retrospective (41 of 97; 42%) and from managed care perspectives (66%). Oral antidiabetic drugs were a central focus, appearing in 83% of studies. Patient behaviors, particularly medication adherence and persistence in real-world settings, are well researched (n = 65) and may influence diabetes outcomes, cardiovascular risk, mortality rates, and treatment-specific resource use (e.g., hospitalizations) and costs (≤$3400 annually per patient). Nevertheless, they are absent from current economic models. Conclusions: Strong correlations exist between patient behaviors, perspectives of care, health outcomes, and costs in T2D. Enhancing their inclusion in pharmacoeconomic modeling, notably the influence on clinical effectiveness of variation in self-management between treatments, should ultimately lead to more accurate estimates of comparative cost-effectiveness, and thereby improve value-based resource allocation and patient access to appropriate therapy. [ABSTRACT FROM AUTHOR]

Objectives: To quantify the uncertainty in the cost-effectiveness of lifestyle intervention versus standard care in overweight and obese people in Switzerland and to determine if further research is necessary based on current information. There has been an increasing interest in using value of information analysis in medical decision-making to quantify the uncertainty in decision-making, and to identify the need for further research. Methods: Value of information analysis was applied on a probabilistic cost-effectiveness model to evaluate the uncertainty by calculating the patient expected value of perfect information (EVPI), population EVPI, and partial EVPI. The costs were expressed in Swiss Francs (CHF), price year 2006. Results: Overall, the EVPI was higher in overweight than in obese people. The maximum population EVPI was CHF 6.8 million in overweight people and CHF 3.2 million in moderate obese people, representing the upper limit on costs associated with decision uncertainty. The partial EVPI estimated a higher uncertainty in the model parameters such as utilities, body mass index, cardiovascular risk factors, and systolic blood pressure in overweight and moderate obese subjects. Conclusions: The EVPI analysis indicates that there is some uncertainty regarding the choice between lifestyle intervention and standard care. The parameter EVPI suggests that if further research is commissioned, this should focus on the effectiveness of lifestyle intervention on cardiovascular risk factors and utilities. [ABSTRACT FROM AUTHOR]

It is normally stated that an economic evaluation should take the societal perspective and that this implies the incorporation of all costs and effects, regardless of where these occur. Nevertheless, this broad perspective may be in conflict with the narrower perspective of the health-care decision-makers we are usually trying to aid. In this article, it is argued that not all costs have to be considered equally important for health-care decision-making and that there is a discrepancy between the economically preferred societal perspective and the aim of aiding health-care decision-makers. This is related to the concept of local rationality. Three reasons why some costs may be considered more important for health-care decision-makers than others are: 1) relevance; 2) equity; and 3) responsibility. We suggest that it may be useful to adopt a two-perspective approach as a standard, presenting one cost-effectiveness ratio following a strict health-care perspective and one following the common societal perspective. The health-care perspective may assist the health-care policymaker better in achieving health-care goals, while the societal perspective indicates whether the local rationality of the narrow health-care perspective is also in line with societal optimality. More research on actual decisions should provide more insight into the relative weights attached to different types of costs. [ABSTRACT FROM AUTHOR]