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Prioritizing public health expenditures when there is a private alternative
By Hoel, Michael
Memorandum 16/2005
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Abstract |
Cost-effectiveness analysis often plays an important role in prioritization among
different types of public health expenditures. Cost-effectiveness is defined as the
maximal health benefits for given expenditures on health care. With a private health
sector as a supplement to the public sector, the socially optimal ranking of treatments
to be included in the public health program is changed. The larger are the costs per
treatment for a given benefit-cost ratio, the higher priority should the treatment be
given. The more heterogeneous preferences for a particular treatment are, the lower
priority should this treatment be given. If the health budget does not exceed the
socially optimal size, treatments with sufficiently low costs should not be performed
by the public health system if there is a private alternative. |
| JEL Classification:
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H42, H51, I10, I18 |
| Keywords:
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public health, prioritization, cost-effectiveness analysis |
| Project:
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4101 Economics of health
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| Financing:
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HERO |
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