Discounting in economic evaluations: stepping forward towards optimal decision rules

Authors

  • Hugh Gravelle,

    1. National Primary Care Research and Development Centre (NPCRDC), Centre for Health Economics, University of York, UK
    Search for more papers by this author
  • Werner Brouwer,

    Corresponding author
    1. Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre / Erasmus University Rotterdam, The Netherlands
    • iMTA, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands
    Search for more papers by this author
  • Louis Niessen,

    1. Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre / Erasmus University Rotterdam, The Netherlands
    Search for more papers by this author
  • Maarten Postma,

    1. Groningen University Institute for Drug Exploration / University of Groningen Research Institute of Pharmacy (GUIDE/GRIP), The Netherlands
    Search for more papers by this author
  • Frans Rutten

    1. Department of Health Policy & Management and Institute for Medical Technology Assessment, Erasmus Medical Centre / Erasmus University Rotterdam, The Netherlands
    Search for more papers by this author

Abstract

The National Institute for Clinical Excellence has recently changed its guidelines on discounting costs and effects in economic evaluations. In common with most other regulatory bodies it now requires that health effects should be discounted at the same rate as costs. We show that the guideline leads to sub-optimal decisions because it fails to account for the changing value of health. NICE (and other regulatory bodies) should either use differential discounting or stipulate how the changing value of health should otherwise be dealt with. We also show how binding health service budget constraints should be incorporated in evaluations. Copyright © 2006 John Wiley & Sons, Ltd.

Ancillary