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Endogenous patient responses and the consistency principle in cost-effectiveness analysis
Liqun Liu1, Andrew J Rettenmaier1, Thomas R Saving1
1Texas A&M University, College Station, TX (LL, AJR, TRS)
Summary
This study clarifies the consistency principle in cost-effectiveness analysis (CEA). Including or excluding costs and benefits of patient responses does not change CEA results, but including survival consumption and earnings is recommended.
Area of Science:
- Health Economics
- Medical Decision Making
- Pharmacoeconomics
Background:
- Medical interventions have direct costs and health benefits, but also indirect financial and health impacts.
- Determining which costs and benefits to include in cost-effectiveness analysis (CEA) is crucial.
- The consistency principle mandates including or excluding both costs and utility benefits of a change.
Purpose of the Study:
- To address the consistency principle in CEA by distinguishing exogenous and endogenous changes.
- To determine how to choose between exclusion/inclusion rules for CEA.
- To clarify the treatment of consumption costs and earnings in CEA.
Main Methods:
- Distinguishing exogenous (intervention-driven) and endogenous (patient response) changes.
- Utilizing a lifetime utility maximization framework.
- Analyzing the impact of inclusion/exclusion rules on CEA outcomes.
Main Results:
- Excluding or including both costs and utility benefits of endogenous changes does not affect CEA results.
- Welfare maximization supports including consumption costs and earnings in CEA.
- The study provides guidance on applying the consistency principle.
Conclusions:
- The consistency principle in CEA is clarified, particularly regarding endogenous changes.
- Including consumption costs and earnings in CEA aligns with welfare maximization.
- This research aids in more accurate and comprehensive economic evaluations of medical interventions.
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