Medical Decision Making: A Health Economic Primer

262 Pages·2017·5.966 MB·English

by  Stefan Felder, Thomas Mayrhofer (auth.)

Stefan Felder · Thomas Mayrhofer
Medical
Decision
Making
A Health Economic Primer
Second Edition
Medical Decision Making
Stefan Felder (cid:129) Thomas Mayrhofer
Medical Decision Making
A Health Economic Primer
Second Edition
StefanFelder ThomasMayrhofer
DepartmentofBusinessandEconomics SchoolofBusinessStudies
UniversityofBasel StralsundUniversityofAppliedSciences
Basel,Switzerland Stralsund,Germany
ISBN978-3-662-53431-1 ISBN978-3-662-53432-8 (eBook)
DOI10.1007/978-3-662-53432-8
LibraryofCongressControlNumber:2016959446
©Springer-VerlagGmbHGermany2011,2017
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Preface to the Second Edition
The second edition of this textbook comes five years after its first publication.
Teethingtroublessuchastypos,arithmeticerrorsandmisnomershavenow(hope-
fully)beenovercome;theauthorsthankcolleagues,studentsandotherreadersfor
theirindispensablecomments.
Thereismorehealtheconomicsinthesecondedition.Whiletheanalysisinthe
firsteditioncapturedbeneficialanddetrimentaleffectsthattestsandtreatmentscan
haveonpatientsinutilityterms,thiseditionmonetizesthesepatientoutcomesand
includes the monetary costs of testing and treatment in the analysis of decision
making.Furthermore,weaddedasectiononimperfectagency,whichassumesthat
physiciansdonotactasperfectagentsfortheirpatientsandthattheyhaveaprofit
motivewhenpracticingmedicine.
A new chapter covers non-expected utility models which are commonly in
vogue in medical journals, such as the dual theory of choice under risk. While
thesemodelsarefruitfulinexplainingobserved testandtreatmentdecisions, they
are not suitable for normative analyses aimed at providing guidance on medical
decisionmaking.
Wewouldliketothanktwopeoplewhohavebeenveryhelpfulintheprepara-
tionofthisedition. DenisBieriwas (literally)the utility man,particularlyhelpful
for checking the comparative static results. Hermione Miller-Moser did a great
editorial job. Besides corrections of orthography and style, her comments often
helpedustorefineandimprovelinesofargument.
Basel,Switzerland StefanFelder
Stralsund,Germany ThomasMayrhofer
December2016
v
Preface to the First Edition
Thefirstauthorbecameacquaintedwithmedicaldecisionproblemsduringhistime
as a faculty member of the Department of Medicine at the Otto-von-Guericke
UniversityofMagdeburgbetween1997and2008.Inhisintroductorylectureseries
on health economics, he sought to combine the economic approach to decision
making under uncertainty with clinical epidemiology. These lectures were the
starting point for thistextbook.He thankshis colleague Bernt-Peter Robra for his
companionship and advice during this journey into the world of medicine. Robra
alsocontributedsomeofthechapters’introductoryquotations.
Thesecondauthorjoinedtheprojectin2008.Hespenthalfthesummerof2009
preparing the first drafts of Chap. 4–6. He elaborated the final text for the first
author in the summer and autumn of 2010, during a sabbatical semester. The
material was also covered in a lecture series on medical decision making held by
both authors at the Department of Economics and Business Administration of
Duisburg-EssenUniversityin2009and2010.Wearethankfultothemanystudents
whohelpedtoimprovethetextwiththeirquestionsanddiscussions.
In preparing this manuscript, we were supported by a team of students and
research assistants at the University Duisburg-Essen. Linda Kerkemeyer helped
with the literature and the identification of copyright, Daniel Hering assisted with
theequationsandexercises.SpecialthanksareduetoSimonDecker,whoadapted
thetexttotheSpringerstylesheetswithgreatdiligenceandattentiontodetail.We
aregratefultoallofthem.
Springer provided professional support during the book’s production process.
WearethankfultoMsFeßforheradviceandtoMsKreiselforhelpwithediting.
Cordial thanks go to Friedrich Breyer at the University of Konstanz, who
providedvaluablecommentsonChap.10.
vii
viii PrefacetotheFirstEdition
Finally, we owe a special debt to Miriam Krieger, Scientific Assistant at the
ChairofHealthEconomics.NotonlydidshegreatlyimprovetheEnglish,butalso
providednumeroushelpfulsuggestionsforstyleandargument.
Basel,Switzerland StefanFelder
Essen,Germany ThomasMayrhofer
July2011
Contents
1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Outline. . . . . . . . . . . .. . . . . . . . . . . . .. . . . . . . . . . . . . .. . . 2
1.2 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2 BasicToolsinMedicalDecisionMaking. . . . . . . . . . . . . . . . . . . . . 7
2.1 Prevalence,IncidenceandRisk. . . . . . . . . . . . . . . . . . . . . . . . 7
2.2 DiscriminatoryPowerandPredictiveValues. . . . . . . . . . . . . . 8
2.3 Probability,OddsandtheLikelihoodRatio. . . . . . . . . . . . . . . 11
2.4 ContinuousTestOutcomesandCutoffValues. . . . . . . . . . . . . 15
2.5 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3 Preferences,ExpectedUtility,RiskAversionandPrudence. . . . . . 23
3.1 PreferencesandUtility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.2 DecisionsUnderUncertainty:MenuofActions,
StatesofNatureandConsequences. . . . . . . . . . . . . . . . . . . . . 27
3.3 TheElementaryUtilityFunctionandtheExpectedUtility
Rule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 28
3.4 TheAxiomofIndependenceandtheExpectedUtilityRule. . . . 31
3.5 TheQALYConcept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.6 RiskAversion. . .. . . . . . .. . . . . .. . . . . .. . . . . . .. . . . . .. . 37
3.7 Prudence. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.8 Non-ExpectedUtilityTheories. . . . . . . . . . . . . . . . . . . . . . . . 46
3.9 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
ix
x Contents
4 TreatmentDecisionsWithoutDiagnosticTests. . . . . . . . . . . . . . . . 53
4.1 TheTreatmentDecisionUnderDiagnosticRisk. . . . . . . . . . . . 54
4.1.1 TheTreatmentThreshold. . . . . . . . . . . . . . . . . . . . . . 54
4.1.2 RiskAversionandtheTreatmentDecision. . . . . . . . . 60
4.1.3 DiagnosticRisk,RiskAversionandtheSeverityof
Illness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
4.1.4 IntroducingtheCostofTreatment. . .. . . . . . . . . . .. . 65
4.2 TheTreatmentDecisionUnderTherapeuticRisk. . . . . . . . . . . 66
4.2.1 TheTreatmentSuccessProbabilityThreshold. . . . . . . 67
4.2.2 TheRoleofRiskAversion. . . . . . . . . . . . . . . . . . . . . 69
4.2.3 ConsideringtheCostofTreatment. . . . . . . . . . . . . . . 71
4.3 TheTreatmentDecisionUnderDiagnosticandTherapeutic
Risk. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
4.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5 TreatmentDecisionswithDiagnosticTests. . . . . . . . . . . . . . . . . . . 77
5.1 TheValueofInformationofaDiagnosticTest. . . . . . . . . . . . . 78
5.1.1 ThePerfectTest. . .. . . .. . . .. . . .. . . .. . . . .. . . .. 78
5.1.2 TheImperfectTest. . . . . . . . . . . . . . . . . . . . . . . . . . . 81
5.2 RiskAttitudeandtheTestandTest-TreatmentThresholds. . . . 87
5.2.1 ThePerfectTest. . .. . . .. . . .. . . .. . . .. . . . .. . . .. 87
5.2.2 TheImperfectTest. . . . . . . . . . . . . . . . . . . . . . . . . . . 90
5.3 TheTestandTest-TreatmentThresholdWhenBoththe
DiagnosticandtheTherapeuticRiskArePresent. . . . . . . . . . . 93
5.4 PotentialHarmfromaTest. . . . . . . . . . . . . . . . . . . . . . . . . . . 96
5.5 ConsideringCostsofTreatmentandTesting. . . . . . . . . . . . . . 99
5.6 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
6 TreatmentDecisionsUnderComorbidityRisk. . . . . . . . . . . . . . . . 105
6.1 PrudenceandtheTreatmentThreshold. . . . . . . . . . . . . . . . . . 106
6.2 PrudenceandTestandTreatmentDecisions. . . . . . . . . . . . . . . 111
6.2.1 ThePerfectTest. . .. . . .. . . .. . . .. . . .. . . . .. . . .. 111
6.2.2 TheImperfectTest. . . . . . . . . . . . . . . . . . . . . . . . . . . 114
6.3 PrudenceandtheTherapeuticRisk. . . . . . . . . . . . . . . . . . . . . 118
6.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
7 OptimalStrategyforMultipleDiagnosticTests. . . . . . . . . . . . . . . 123
7.1 ChoosingAmongTwoTests. . . . . . . . . . . . . . . . . . . . . . . . . . 124
7.2 CombiningTwoTests. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
7.3 TestandTest-TreatmentThresholdsforCompositeTests. . . . . 131
Contents xi
7.4 TheOptimalSequenceofandPotentialHarmfromTesting. . . 137
7.5 ParallelorSequentialTesting?. . . . . . . . . . . . . . . . . . . . . . . . 141
7.6 TheCostofTreatmentandTestingandCompositeTests. . . . . 142
7.7 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 145
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147
8 TheOptimalCutoffValueofaDiagnosticTest. . . . . . . . . . . . . . . 149
8.1 EndogenousTestCharacteristics. . . . . . . . . . . . . . . . . . . . . . . 150
8.2 TheOptimalCutoffValue. . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
8.3 TestandTest-TreatmentThresholdsandtheOptimalCutoff
Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 158
8.4 MultipleTestswithEndogenousSensitivityandSpecificity:
Triple-TestandAmniocentesis. . . . . . . . . . . . . . . . . . . . . . . . 161
8.4.1 TheROCCurveoftheTripleTest. . . . . . . . . . . . . . . 161
8.4.2 TheValueofInformationandOptimalUseofthe
TripleTestwithAmniocentesis. . . . . . . . . . . . . . . . . 163
8.4.3 DecidingontheTestOutcome. . . . . . . . . . . . . . . . . . 166
8.5 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171
9 ATest’sTotalValueofInformation. . . . . . . . . . . . . . . . . . . . . . . . 173
9.1 ExogenousTestCharacteristics. . . . . . . . . . . . . . . . . . . . . . . . 174
9.1.1 PerformanceasaFunctionofthePrevalenceRate. . . . 174
9.1.2 OverallPerformance. . . . . . . . . . . . . . . . . . . . . . . . . 176
9.1.3 ASocialPerspective. . . . . . . . . . . . . . . . . . . . . . . . . 182
9.2 EndogenousTestCharacteristics. . . . . . . . . . . . . . . . . . . . . . . 182
9.2.1 PerformanceasaFunctionofthePrevalenceRate. . . . 183
9.2.2 OverallPerformance. . . . . . . . . . . . . . . . . . . . . . . . . 183
9.3 ApplicationtoPrenatalDiagnostics. . . . . . . . . . . . . . . . . . . . . 184
9.3.1 Age-SpecificPerformance. . . . . . . . . . . . . . . . . . . . . 185
9.3.2 OverallPerformance. . . . . . . . . . . . . . . . . . . . . . . . . 186
9.4 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188
Exercises. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
References. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189
10 ValuingHealthandLife. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191
10.1 TreatmentandHealth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192
10.2 TreatmentandSurvival. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198
10.3 TheValueofHealthandLife. . . . . . . . . . . . . . . . . . . . . . . . . 204
10.4 OptimalAllocationofHealthAcrossIndividuals. . . . . . . . . . . 208
10.4.1 TheHealthModel. . . . . . . . . . . . . . . . . . . . . . . . . . . 209
10.4.2 TheHealth-SurvivalModel. . . . . . . . . . . . . . . . . . . . 212
10.4.3 TheQALYModel. . . . . . . . . . . . . . . . . . . . . . . . . . . 214
10.5 Conclusion. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216