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Our Perspectives

In health economics, the term “perspective” is another word for the viewpoint (i.e., that of society at large, that of the health care system or specific payer groups, that of employers, that of patients, or – broadly neglected – that of citizens) adopted, with far-reaching consequences for the type and character of costs and benefits to be considered.

The choice of perspective should be driven by the problem to be solved, and it will inevitably entail a full set of social value judgments. Beyond allocative issues, economic evaluations should address – or at the very minimum discuss – the distributional implications of any resulting recommendations. Unfortunately, in conventional cost benefit and cost effectiveness analyses (CBAs and CEAs), distributional aspects (i.e., the discriminating impact on different groups of patients) are rarely addressed appropriately.

Furthermore, it appears problematic to adopt different perspectives for costing and valuation, for example, by advocating to combine a measure of benefit capturing individual preferences for health states (such as health-adjusted life years) with a broader societal perspective on costs – particularly in the case of a national health scheme operating with a fixed health care budget. If, as in fact many academic guidelines for health economic evaluation recommend, a societal perspective was used for cost analysis, it would seem more consistent to adopt the maximum individual willingness-to-pay as a measure of value. This, however, is well-known to be a hard pill to swallow for many non-economists, as well as, arguably, the vast majority of health care policy makers.

Pixabay Grafik (#1868547)

Next, while lip service is paid to the importance of the perspective of patients, the full impact of poor health and of health care on the social and psychological situation of patients and their relatives (family members, caregivers, dependents, friends, …) has been broadly neglected in applied health economics has been rarely incorporated in formal Health Technology Assessments (HTAs) as a relevant dimension.

The matter is further complicated by a rapidly increasing number of studies showing that social value (“utility”) may exceed the simple aggregate of individual utility (or preferences), as it is conventionally assumed in mainstream economics. However, if citizens have preferences related to the social fabric of the societies they live in, then a broader citizens’ perspective would need to be adopted to capture these. Indeed, many citizens are willing to share resources not only with those in particularly poor health states, but also with those patients who are unfortunate enough to be affected by high cost diseases and care.

This supports the notion of a social perspective for the measurement of both costs and value, which to date has been rarely implemented in applied health economics, as it would imply a shift of the focus of analysis from the individual level (incremental cost per patient treated divided by incremental health gain of that patient) to the program level, i.e., net budget impact divided by the additional social value offered by the availability of a health technology (“social cost value analysis”) – a topic addressed in depth at our Heidelberg Health Economics Summer Schools.