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Health Policy. 1991 Feb;17(1):1-23.

Economic evaluation in health care: is there a role for cost-benefit analysis?

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Department of Health and Society, Linköping University, Sweden.


This paper is devoted to the contingent valuation (CV) method and its possible area of application in health economics. With the CV method willingness to pay or willingness to accept is measured with survey methods. The CV method has been developed in environmental economics and is now the most commonly used method of measuring environmental benefits. The method has, however, seldom been used in economic evaluations of health care. The development of economic evaluation in the health care area is reviewed, and the existing methods (the human capital approach, cost-effectiveness analysis and cost-utility analysis) are compared with cost-benefit analysis using the CV method. It is shown that existing methods have several weak points, this makes the CV method an appealing alternative and/or complement to existing methods. From the empirical applications of the CV method in economic evaluations of health care it is evident that it is possible to achieve acceptable response rates. The methodological problems encountered when measuring willingness to pay with survey methods are shown to be similar to the problems encountered when measuring utility and quality of life in cost-utility analysis. Further studies with the CV method are necessary to further explore questions concerning the reliability and validity of the method.

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