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KMID : 1170320180240020083
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Korean Journal of Health Economics and Policy
2018 Volume.24 No. 2 p.83 ~ p.106
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What should the cost-effectiveness threshold reflect?
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Bae Eun-Young
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Abstract
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The cost-effectiveness threshold is the basis for judging whether alternative A is cost-effective or not. Although many countries do not explicitly disclose their threshold levels, the use of an appropriate threshold is critical for efficient resource allocation. In this study, different views will be examined regarding what thresholds should be reflected. There is a claim that the threshold should reflect the opportunity cost of implementing new technologies. However, the thresholds applied in many cases are based on the willingness to pay for additional life years accrued by new technologies. The WHO threshold also takes the willingness to pay into consideration. Those who argue that thresholds should reflect opportunity costs insist that those decisions which do not take opportunity costs into account can rather reduce the total health level of the society. In Korea, per capita GDP, was used as a criterion for judging cost-effectiveness in reimbursement decision-making. Previous research results on the willingness to pay for additional QALY also generally supports this threshold level. However, if the threshold level is derived from an opportunity cost perspective, it is calculated to be 46~52% of GDP per capita. This value is an update on previous research results that reflect the difference in GDP levels of each country. In the process, however, many assumptions were used, thus it is not possible to draw clear conclusions about the level of the appropriate cost-effectiveness threshold. Nevertheless, care should be taken when adjusting the threshold value, considering that the application of the wrong criterion may instead reduce the overall health of beneficiaries.
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KEYWORD
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Cost-Effectiveness Threshold, Opportunity Cost, Willingness to Pay
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