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A model to correct for short-run inefficiencies in economic evaluations in healthcare

Health economics, 2012-03, Vol.21 (3), p.270-281 [Peer Reviewed Journal]

Copyright © 2011 John Wiley & Sons, Ltd. ;Copyright Wiley Periodicals Inc. Mar 2012 ;ISSN: 1057-9230 ;EISSN: 1099-1050 ;DOI: 10.1002/hec.1705 ;PMID: 21322084 ;CODEN: HEECEZ

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Title:
A model to correct for short-run inefficiencies in economic evaluations in healthcare
Author: Van de Wetering, Gijs ; Woertman, Willem H. ; Adang, Eddy M. M.
Subjects: Attitudes ; Cost analysis ; cost behavior ; Cost effectiveness ; Cost-Benefit Analysis ; cost-effectiveness analysis ; Decision makers ; Decision Making, Organizational ; Delivery of Health Care - economics ; Dialysis ; Diffusion of Innovation ; economic evaluation ; Economic models ; Efficiency ; efficiency losses ; Efficiency, Organizational ; Health care ; Health economics ; Health services ; Humans ; Models, Econometric ; Organizational Innovation - economics ; Radiography ; Radiology - economics ; Radiology - methods ; Renal Dialysis - economics ; short-run inefficiency ; Studies ; technology substitution
Is Part Of: Health economics, 2012-03, Vol.21 (3), p.270-281
Description: SUMMARY Important assumptions that underlie cost‐effectiveness analysis (CEA) are that production technologies are convex and that production processes always perform at constant returns to scale. However, in the short run these assumptions are likely to be violated. Therefore, CEAs might overestimate cost‐effectiveness in the short run. To come up with a more precise cost‐effectiveness outcome, we present a model that is able to correct the long‐run incremental net benefit (INB) for short‐run inefficiencies. This provides decision makers with a more realistic view of the expected efficiency gains. This model starts by determining the initial efficiency losses inflicted by inflexible resources. Then the model is made dynamic in order to adjust the efficiency losses by allowing for refilling and writing off freed capacity. Finally, the model calculates the length of the short‐run time frame in which such efficiency losses exist, and a correction term with which the usual long‐run INB should be adjusted to account for short‐run inefficiencies. The model is applied to two cases: dialysis and digitizing a radiography department. The dialysis case shows moderate short‐run efficiency losses while in the radiography case short‐run efficiency losses are sufficiently large to cause a switch in cost‐effectiveness from favorable to inefficient in the short run. Copyright © 2011 John Wiley & Sons, Ltd.
Publisher: Chichester, UK: John Wiley & Sons Ltd
Language: English
Identifier: ISSN: 1057-9230
EISSN: 1099-1050
DOI: 10.1002/hec.1705
PMID: 21322084
CODEN: HEECEZ
Source: MEDLINE
Alma/SFX Local Collection
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A model to correct for short-run inefficiencies in economic evaluations in healthcare

Copyright © 2011 John Wiley & Sons, Ltd. ;Copyright Wiley Periodicals Inc. Mar 2012 ;ISSN: 1057-9230 ;EISSN: 1099-1050 ;DOI: 10.1002/hec.1705 ;PMID: 21322084 ;CODEN: HEECEZ

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