Priority Setting in Health Care with Disease and Treatment Risks
Yuqing TAO1, Wen CHENG2, Sijie ZOU3
1. Department of Teacher Education, Maanshan Teacher's College, Maanshan 243041, China;
2. Department of Risk Management, China Huarong Asset Management Co., Ltd, Beijing 100033, China;
3. Department of Finance, Shandong Branch, China Three Gorges New Energy Co., Ltd, Ji'nan 250000, China
This paper deals with the issue of priority setting in health care under uncertainties about the severity of the illness and the effectiveness of medical treatment. We examine the effect of a disease uncertainty (a treatment uncertainty) on the allocation of health care resources in the presence of a treatment risk (a disease risk) and identify preference conditions under which the social planner allocates more resources to higher risk population. We allow for the simultaneous presence of two risks and investigate the joint effect of two-source uncertainties on health care allocation when the two risks are either small or positively quadrant dependent. The effect of inequality aversion on health care allocation is also analyzed by introducing an equity weighting function. Our work extends the previous model of health care priority to two-risk framework and provides new insights into the problem of health care decision making under uncertainty.