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Another important aspect of this material is that it

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Another important aspect of this material is that it is based on an analytical technique common in economics when analysts are faced with evaluatingoptions when the costs and payoffs of choices are not measured in the same units and especially when there are multiple cost and multiple payoffs withmixed units. E.g., we may spend dollars for healthcare services but realize benefits in terms of peace of mind, feeling better, living longer, and wagesearned because we are not sick.Chapter 13This chapter is all about different ways of measuring and evaluating the benefits of investments in healthcare and health and roughly splits into twobranches, the same two shown on the right side of Figure 13.1 (p. 170).The first branch looks at methods of evaluating health as essentially a consumption good while the second branch looks at the increased economicproductivity (or avoidance of cost) stemming from health.Commensurable and Incommensurable"Commensurable" essentially means comparing apples to apples or "measurable by the same standard". Commensurable measures can be directlycompared to each other. The chapter starts out by illustrating just a few of many ways of evaluating healthcare actions and shows that most cannot bedirectly compared to the others or to the cost factors which generate the benefits.QALY and DALYThe discussion around these two topics (Sections 13.2.1 & 13.2.2) on the one hand can seem like an exercise semantics but on the other introducessome interesting concepts. If you can understand the middle section of Figure 13.6 you will have the ideas under control.Especially notice how the two deal with both time and longevity (mortality) and quality of life improvements (morbidity).Be sure to note the three approaches to evaluating the value of health at the bottom of p. 180. Essentially, in their pursuit of a commensurable measureof health outcomes economists have left themselves with a hole that needs to be filled, some method to determine across individuals the value of health.While these were interesting I thought that even more insight was gained from the discussion of disadvantages later in the section.Comparing MeasuresI thought that the discussion in Section 13.2.3 was a little limited in two respects:46The entire chapter gave short coverage to the issue of uncertain outcomes. While one of the measurement approaches had respondents evaluate
risk this concept didn't make it into the higher level of analysis.47It focused on allocating resources to distinct groups or treatments. It did not address investments into entire programs, such as insurance plans,hospital construction, sanitation or other investments with uncertain outcomes.Production GainsSection 13.3 is the second branch of the analysis which seeks to create a basis for valuing health and healthcare by its contribution to increasedproductivity. Table 13.3 gives some components of cost and benefit but leaves us with the "netting out" of productivity gains as the value of health but

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Term
Spring
Professor
dr.moi

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