title: Addressing risk preferences in cost-effectiveness analyses.
abstract: Cost-effectiveness analysis is a form of economic evaluation that compares that compares the costs and effectiveness of health interventions, where effectiveness is measured in a single scale. Despite the growth in the popularity of cost-effectiveness analysis, very few cost-effectiveness analyses adequately measure and account for uncertainty. In the health economics literature, two schools of thought are emerging. The first takes a statistical approach to uncertainty by focusing on the likelihood that a decision making error will be made. The second approach applies and develops economic theories of risk preference that consider the welfare implications for a patient when they are presented with interventions that have uncertain health outcomes. Cost-effectiveness analyses need to account for risk preferences if they claim to be increasing patient welfare.
authors: Department of Health Policy and Management, Mailman School of Public Health, International Center for Health Outcomes and Innovation Research, Columbia University, New York, NY, USA.
authors: Joshua Graff
authors: JG
authors: Zivin
authors: John F
authors: JF
authors: Bridges
mesh_terms: D003362:Cost-Benefit Analysis / Q000379:methods; D006292:Health Priorities; D006801:Humans; D016013:Likelihood Functions; D017060:Patient Satisfaction / Q000191:economics*; D018570:Risk Assessment / Q000191:economics*; D012309:Risk-Taking; D016896:Treatment Outcome; D035501:Uncertainty; D014481:United States; D026712:Value of Life / Q000191:economics*