COST-EFFECTIVENESS ANALYSIS, EXTENDED DOMINANCE, AND ETHICS - A QUANTITATIVE ASSESSMENT

The principle of extended dominance is applied in incremental cost-eff ectiveness analysis to eliminate from consideration strategies whose c osts and benefits are improved by a mixed strategy of two other altern atives. Ethical considerations arise, however, in that equal care is n ot provided to all of the population. To explore these concerns, the a uthors establish a theoretical health care example with three diagnost ic strategies. They demonstrate, both algebraically and geometrically, how to calculate the set of all possible mixed strategies that domina te the strategy eliminated by extended dominance. With the considerati on of budget constraints, they define the ''coefficient of inequity'' as the minimum proportion of the population that would receive an infe rior health care strategy if a mixed strategy were to be used instead of the dominated strategy. The implications of cost-effectiveness anal ysis are made explicit, revealing classic economic concerns about the tradeoff of equity and efficiency.