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Organizational Decision Making Concerning Health Management Programs Submitted to Social Science and Medicine |
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Abstract
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This paper addresses the problem of managerial decision
making concerning health management programs. Although substantial benefits
are associated with these programs, there are also significant difficulties
with regard to assessing the benefits. Managerial decision makers commonly
use heuristics to simplify decision making, but these heuristics tend
to introduce bias into the decision process. This is especially true when
key decision information comes from unfamiliar sources, and when information
is highly and irreducibly uncertain. After reviewing the literature, we
conclude that changes in managerial accounting methods and the utilization
of Monte Carlo analysis may improve health management decision making.
Last, we pose several research questions that, if answered, may aid organizations
in health management.
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Technical Limitations of Cost-Effectiveness Analysis Delivered at the Society for Risk Analysis-Europe. Berlin, July 21 - 24 |
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Abstract
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Comparing or prioritizing diverse risks using a common metric (e.g. cost-per life saved) is viewed by many as a useful role of government. The efficacy and wisdom of this approach, however, is by no means universally accepted. This paper evaluates the uncertainty in published cost-effectiveness estimates. The analysis suggests that calculated values chronically underestimate or ignore uncertainty, leading to spurious conclusions about efficacy of different policy choices. In addition, the estimates vary in absolute value, range of values and attention to uncertainty along disciplinary lines. This suggests that prioritizing risk management interventions using published values will be both methodologically and normatively suspect. This could have the unintended long-term effect of marginalizing the use of risk analysis in the policy making process. In contrast, propagating uncertainty and focusing on extreme (high cost and net-benefit) risk management options could simultaneously increase the acceptability of risk analysis as a decision making tool and improve risk analysis methods and information. Examples of well- and poorly-understood risks illustrate this effect. Key Words: Cost-effectiveness, uncertainty, valuation, risk comparison, risk management
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