| Discounting in the economic evaluation of health care interventions. | |
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MedLine Citation:
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PMID: 8501989 Owner: NLM Status: MEDLINE |
Abstract/OtherAbstract:
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Do economic theories that underlie discounting have specific implications for program evaluation in health? In this study, both the contemporary practice and the theoretical foundations of discounting are reviewed. The social discount rate controversy is considered, and the two major concepts (i.e., opportunity cost and time preference) involved in the formulation of a social discount rate are outlined. Also described are the arguments for discounting proposed by thinkers in non-economic disciplines. Finally, the implications of choosing a discount rate for evaluation of individual health care programs are considered. It is argued that the conventional practice of discounting all health care programs at a rate of 5% may not consistently reflect societal or individual preference. Specific recommendations arising from this paper are: 1) given the considerable disagreement at the theoretical level as to the appropriate social discount rate, analysts should be specific about what theoretical approach underlies their choice of rate, especially when the analytic result is sensitive to the discount rate; 2) the discount rate chosen should be appropriate for the perspective of the analysis (social vs. individual vs. institutional, etc.); 3) when appropriate, measures should be taken to avoid double discounting, because some health related outcome measures already incorporate individuals' time preference; and 4) it is suggested that the political process may serve as the appropriate means of reflecting social values in the choice of a discount rate. In addition, the authors argue that a consensus conference approach, with political participation, offers a flexible, pragmatic, and explicit way of synthesizing the empirical, normative, and ethical considerations that underlie choice of a discount rate. |
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Authors:
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M Krahn; A Gafni |
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Publication Detail:
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Type: Journal Article; Review |
Journal Detail:
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Title: Medical care Volume: 31 ISSN: 0025-7079 ISO Abbreviation: Med Care Publication Date: 1993 May |
Date Detail:
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Created Date: 1993-07-01 Completed Date: 1993-07-01 Revised Date: 2005-11-16 |
Medline Journal Info:
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Nlm Unique ID: 0230027 Medline TA: Med Care Country: UNITED STATES |
Other Details:
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Languages: eng Pagination: 403-18 Citation Subset: IM |
Affiliation:
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Department of Medicine, Toronto Hospital, Ontario, Canada. |
Export Citation:
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APA/MLA Format Download EndNote Download BibTex |
| MeSH Terms | |
Descriptor/Qualifier:
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Cost of Illness Cost-Benefit Analysis / methods* Economic Competition Health Care Costs Health Resources / economics* Health Services Research / methods* Humans Models, Econometric* Program Evaluation / economics Quality of Life Value of Life |
From MEDLINE®/PubMed®, a database of the U.S. National Library of Medicine
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