title: Allocating health expenditures to treatment and prevention.
abstract: Rational evaluation of important health sector issues requires more formal analysis of the optimal allocation of resources to treatment and prevention. The suggested approach imbeds a Markov model of the disease process in a simple budget-constrained nonlinear program. Expenditures are allocated to prevention and treatment of a given disease so as to maximize the expected fraction of time spent in the undiseased state by a group of individuals. Random-parameter simulations of a plausible form of the model produce qualitatively different expansion paths for the optimal spending mix, suggesting the need for a flexible policy stance until the parameters of such models can be estimated.
mesh_terms: D005102:Health Expenditures; D006295:Health Resources / Q000600:supply & distribution*; D008962:Models, Theoretical; D011314:Preventive Health Services / Q000191:economics*; D014481:United States