Unbiased Analysis of Today's Healthcare Issues
A typical answer is that the cost of R&D is very high. However, an interesting book by–César Hidalgo titled Why Information Grows–offers a more conceptual rationale. Medicinal pills embody little information, as their active compound is usually a small and relative simple molecule. Yet medicinal pills can be extremely useful and valuable. Why? To understand…
The premise is simple. Create markets, let consumers choose the products that fit them best, and the competition will lead to higher quality and lower prices. That is the premise behind the Affordable Care Act’s health insurance exchanges. A necessary condition for this to work, however, is that patients have visibility into the quality and…
Chapter 7 of Decision Modelling for Health Economic Evaluation looks at the calculating the Expected Value of Sample Information (EVSI). In particular, EVSI can answer the question of optimal sample sizes. The Wrong Way How do scientists currently decide on sample sizes? Often they will do one of the following: “(i) estimate potential grant funding…
You have just done a study comparing the cost-effectiveness of drug A and drug B. Should you just rest on these laurels or is further research on drug B warranted. Decision Modelling for Health Economic Evaluation claims that there are 3 criteria that should determine whether or not you decide to collect more information: The…
Most economics simplify markets and assume that there is one market price. In reality, however, we observe significant price dispersion. Because of this, we see that that searching for the lowest price–while costly–can buyers to superior outcomes. George Stigler (1961) is a seminal paper on the Economics of Information which I will review here. When…