Cost-effectiveness analysis and health care resource allocation: decision rules under variable returns to scale
Related Experiment Video
Updated: Aug 12, 2026

Operant Protocols for Assessing the Cost-benefit Analysis During Reinforced Decision Making by Rodents
Published on: September 10, 2018
Elamin H Elbasha1, Mark L Messonnier
1US Centers for Disease Control and Prevention, USA. elamin_elbasha@merck.com
Abstract:
We argue that health programs are administered in settings that often violate the frequently stated assumption of constant returns to scale in the provision of health services. Three types of returns to scale are identified from the general economic literature: returns to scale with respect to population, effectiveness, and quality. We show that decision rules based on incremental cost-effectiveness ratios or cost-benefit tests are not optimal if returns to scale are not constant. We derive the optimal decision rules under variable returns to scale using optimization techniques, and employ several examples to illustrate the concepts and methods.
Related Concept Videos
Methods Of Healthcare Delivery System
Managed Care System:
The managed care system is designed to control the cost while maintaining the quality of care. The patient's care from admission to discharge is planned by the primary care provider or the case manager, also known as the gatekeeper. In a managed care system, the number of care providers is limited...
Issues And Trends In Healthcare Delivery System
Cost Containment
Payment for healthcare services has historically promoted adoption of costly and often unnecessary or inefficient...
Methods of Documentation VI: Case Management Model
For example, a patient with a chronic illness...
Health Information Technology and Healthcare Information System
Health Information Technology, commonly called HIT, integrates advanced information systems and technology in healthcare settings. Its primary functions include:
Types of Biopharmaceutical Studies: Controlled and Non-Controlled Approaches
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast, controlled...
Methods of Medium Optimization

