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Health Econ. 2019 Nov;28(11):1331-1344. doi: 10.1002/hec.3946. Epub 2019 Aug 30.

The marginal benefits of healthcare spending in the Netherlands: Estimating cost-effectiveness thresholds using a translog production function.

Author information

1
Scientific Institute for Quality of Healthcare, Radboud University Medical Center, Nijmegen, Netherlands.
2
Talma Institute, Department of Health Sciences, VU University Amsterdam, Amsterdam, Netherlands.
3
National Health Care Institute, Diemen, Netherlands.
4
Radboud Institute for Health Sciences, Radboud University Medical Center, Nijmegen, Netherlands.

Abstract

New technologies may displace existing, higher-value care under a fixed budget. Countries aim to curtail adoption of low-value technologies, for example, by installing cost-effectiveness thresholds. Our objective is to estimate the opportunity cost of hospital care to identify a threshold value for the Netherlands. To this aim, we combine claims data, mortality data and quality of life questionnaires from 2012 to 2014 for 11,000 patient groups to obtain quality-adjusted life-year (QALY) outcomes and spending. Using a fixed effects translog model, we estimate that a 1% increase in hospital spending on average increases QALY outcomes by 0.2%. This implies a threshold of €73,600 per QALY, with 95% confidence intervals ranging from €53,000 to €94,000 per QALY. The results stipulate that new technologies with incremental cost effectiveness ratios exceeding the Dutch upper reference value of €80,000 may indeed displace more valuable care.

KEYWORDS:

QALY; cost-effectiveness; health care spending; threshold; translog function

PMID:
31469510
DOI:
10.1002/hec.3946

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