Related Experiment Video
Updated: Jul 19, 2026
07:47
Measuring Delay Discounting in Humans Using an Adjusting Amount Task
Published on: January 9, 2016
Discounting in economic evaluations: stepping forward towards optimal decision rules.
Hugh Gravelle1, Werner Brouwer, Louis Niessen
1National Primary Care Research and Development Centre (NPCRDC), Centre for Health Economics, University of York, UK.
Health Economics
|September 29, 2006
Summary
National Institute for Clinical Excellence (NICE) guidelines on discounting costs and effects in economic evaluations lead to suboptimal decisions. The current approach fails to account for the changing value of health, necessitating revised methods for cost-benefit analysis.
Area of Science:
- Health economics
- Economic evaluation
- Cost-benefit analysis
Background:
- The National Institute for Clinical Excellence (NICE) updated guidelines for economic evaluations.
- Current guidelines mandate equal discounting rates for costs and health effects.
Purpose of the Study:
- To evaluate the impact of NICE's updated discounting guidelines on economic evaluations.
- To demonstrate the sub-optimal decision-making resulting from current discounting practices.
- To propose alternative approaches for incorporating the value of health over time.
Main Methods:
- Analysis of economic evaluation principles under different discounting scenarios.
- Modeling the implications of uniform versus differential discounting for health effects.
- Examination of methods for integrating budget constraints into economic evaluations.
Main Results:
- The guideline requiring equal discounting rates for costs and health effects leads to sub-optimal decisions.
- Current practices do not adequately account for the changing value of health over time.
- Binding health service budget constraints can be effectively incorporated into evaluations.
Conclusions:
- NICE and other regulatory bodies should adopt differential discounting for health effects or alternative methods to address the changing value of health.
- Revised guidelines are needed to ensure optimal resource allocation in healthcare economic evaluations.
Related Concept Videos
01:09Decision Making: P-value Method
The process of hypothesis testing based on the P-value method includes calculating the P- value using the sample data and interpreting it.
First, a specific claim about the population parameter is proposed. The claim is based on the research question and is stated in a simple form. Further, an opposing statement to the claim is also stated. These statements can act as null and alternative hypotheses: a null hypothesis would be a neutral statement while the alternative hypothesis can have a...
First, a specific claim about the population parameter is proposed. The claim is based on the research question and is stated in a simple form. Further, an opposing statement to the claim is also stated. These statements can act as null and alternative hypotheses: a null hypothesis would be a neutral statement while the alternative hypothesis can have a...
01:14Decision Making: Traditional Method
The process of hypothesis testing based on the traditional method includes calculating the critical value, testing the value of the test statistic using the sample data, and interpreting these values.
First, a specific claim about the population parameter is decided based on the research question and is stated in a simple form. Further, an opposing statement to this claim is also stated. These statements can act as null and alternative hypotheses, out of which a null hypothesis would be a...
First, a specific claim about the population parameter is decided based on the research question and is stated in a simple form. Further, an opposing statement to this claim is also stated. These statements can act as null and alternative hypotheses, out of which a null hypothesis would be a...
01:23Types of Biopharmaceutical Studies: Controlled and Non-Controlled Approaches
Biopharmaceutical studies constitute a vital field aiming to enhance drug delivery methods and refine therapeutic approaches, drawing upon diverse interdisciplinary knowledge. In research methodologies, the choice between controlled and non-controlled studies significantly influences the study's reliability and accuracy.
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast, controlled...
Non-controlled studies, commonly employed for initial exploration, lack a control group, rendering them susceptible to biases and external influences. In contrast, controlled...
01:20Decision Making
Decision-making is a fundamental cognitive process that involves evaluating alternatives and selecting among them. This process can range from simple choices, such as deciding what to wear, to complex decisions, like choosing a major in college or a career path. The complexity of the decision often dictates the approach we use, which can be broadly categorized into two types: automatic and controlled decision-making.
Automatic decision-making is fast, intuitive, and relies on gut feelings...
Automatic decision-making is fast, intuitive, and relies on gut feelings...
01:37Reason and Intuition
The human brain processes information for decision-making using one of two routes: an intuitive system and a rational system (Epstein, 1994; popularized by Kahneman, 2011 as System 1 and System 2, respectively). The intuitive system is quick, impulsive, and operates with minimal effort, relying on emotions or habits to provide cues for what to do next, while the rational system is logical, analytical, deliberate, and methodical. Research in neuropsychology suggests that the brain can only use...
01:15Impact of Pharmacokinetic–Pharmacodynamic Models: Regulatory Decisions
PK–PD modeling has significantly influenced FDA regulatory decisions, particularly drug approval, dosage optimization, and labeling. These models integrate pharmacokinetics (PK) and pharmacodynamics (PD) to predict drug behavior and effects, aiding in optimizing dosing regimens and enhancing the probability of clinical trial success.One notable example is Nesiritide (Natrecor®), a recombinant human brain natriuretic peptide for treating acute decompensated congestive heart failure (CHF).