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The Concept of Cost in the Economic Evaluation of Health Care: A Theoretical Inquiry

Published online by Cambridge University Press:  10 March 2009

Magnus Johannesson
Affiliation:
Stockholm School of Economics and Harvard School of Public Health

Abstract

The costs included in economic evaluations of health care vary from study to study. Based on the theory of cost-benefit analysis, the costs that should be included in an economic evaluation are those not already included in the measurement of willingness to pay (net willingness to pay above any treatment costs paid by the individual) in a cost-benefit analysis or in the easurement of effectiveness in a cost-effectiveness analysis. These costs can be defined as the onsumption externality of the treatment (the change in production minus consumption for those included in the treatment program). For a full economic evaluation, the consequences for those included in the treatment program and a caring externality (altruism) should also be added.

Type
General Essays
Copyright
Copyright © Cambridge University Press 1994

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