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A fair approach to discounting future effects: taking a societal perspective
W Brouwer1, B van Hout, F Rutten
1Institute for Medical Technology Assessment, Erasmus University Rotterdam, The Netherlands.
Journal of Health Services Research & Policy
|August 18, 2000
Summary
Future health effects should not be discounted at the same rate as costs. Societal valuation of health changes over time due to factors like increased life expectancy, necessitating a separate discount rate for health effects.
Area of Science:
- Health Economics
- Societal Valuation
Background:
- Standard practice discounts future costs and health effects at the same rate (typically 5%).
- This approach assumes a consistent societal valuation of costs and health over time.
Purpose of the Study:
- To challenge the uniform discounting of future costs and health effects from a societal perspective.
- To propose an alternative approach for discounting health effects based on their changing societal valuation over time.
Main Methods:
- Theoretical analysis of discount rate application in health economics.
- Examination of factors influencing societal valuation of health, including life expectancy and diminishing marginal utility.
Main Results:
- The uniform discounting of costs and health effects may be inappropriate for societal cost-benefit analysis.
- A distinct discount rate for health effects is advocated, reflecting changes in societal valuation.
Conclusions:
- Societal valuation of health effects evolves due to factors like increased life expectancy.
- Discount rates for health effects should be based on these evolving societal values, not solely on cost discount rates.
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