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Area of Science:

  • Health Economics
  • Health Policy Analysis
  • Resource Allocation

Background:

  • Growing interest in cost-effectiveness thresholds for health care resource allocation.
  • Supply-side cost-effectiveness thresholds aim to represent health system opportunity costs.

Purpose of the Study:

  • To consider the role of empirical estimates of supply-side thresholds in policy-making.
  • To summarize limitations of current threshold estimation approaches.
  • To provide recommendations for policymakers using emerging evidence.

Main Methods:

  • Distinguishing types of point estimates (marginal productivity, average displacement, outcome elasticity).
  • Summarizing limitations in theory, methods, and data of current approaches.
  • Highlighting questions from alternative interpretations of thresholds.

Main Results:

  • Current empirical approaches to estimating supply-side cost-effectiveness thresholds have theoretical, methodological, and data limitations.
  • Alternative interpretations of thresholds raise policy-relevant questions.
  • Evidence base for empirical estimates is often emerging or incomplete.

Conclusions:

  • Policymakers must clearly define threshold scope and ensure theoretical consistency.
  • Establish a process for evidence assessment and threshold updates.
  • Maintain flexibility in threshold application within decision-making.
  • Provide decision-maker support for threshold use and implementation.