Optimum investments in project evaluations: When are cost-effectiveness analyses cost-effective?
This manuscript extends the classical models of the value of information to ask whether a hospital's net financial return is ever maximized by a cost- effectiveness analysis of retrospective data when watchful waiting and a full randomized clinical trial are alternative methodologies. The manuscript demonstrates that (1) some small-scale retrospective analyses may negatively affect net income and (2) under some conditions, larger-scale retrospective analyses may maximize net income. The manuscript also suggests that risk aversion increases the value of information and therefore the optimum expenditure on a project evaluation.
Journal of Medical Systems
Digital Object Identifier (DOI)
Woodward, R.S., Boxerman, S.B., Schnitzler, M.A., Dunagan, W.C. Optimum investments in project evaluations: When are cost-effectiveness analyses cost-effective? (1996) Journal of Medical Systems, 20 (6), pp. 385-393.