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Threshold analysis in the presence of both the diagnostic and the therapeutic risk

Author

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  • Stefan Felder

    (University of Basel
    University of Duisburg-Essen)

  • Thomas Mayrhofer

    (Stralsund University of Applied Sciences)

Abstract

The well-established a priori probability of illness threshold in medical decision making, introduced by Pauker and Kassirer (N Engl J Med 293:229–234, 1975; N Engl J Med 302:1109–1117, 1980), involves the diagnostic risk only. We generalize the threshold analysis by adding the therapeutic risk, i.e., in accounting for the risk that a treatment might sometimes fail. We derive a priori probability of illness threshold as a function of the probability of successful treatment, as well as the inverted function, where the successful treatment probability threshold is a function of the a priori probability of illness. The thresholds in the general model are higher than those in the special cases where one of the two risks is absent. Applications show that the changes in the thresholds can be substantial. Our general model might explain empirical findings of much higher thresholds than the Pauker–Kassirer model suggests.

Suggested Citation

  • Stefan Felder & Thomas Mayrhofer, 2018. "Threshold analysis in the presence of both the diagnostic and the therapeutic risk," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(7), pages 1019-1026, September.
  • Handle: RePEc:spr:eujhec:v:19:y:2018:i:7:d:10.1007_s10198-017-0951-1
    DOI: 10.1007/s10198-017-0951-1
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    References listed on IDEAS

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    1. Stefan Felder & Thomas Mayrhofer, 2017. "Medical Decision Making," Springer Books, Springer, edition 2, number 978-3-662-53432-8, February.
    2. Christophe Courbage & Béatrice Rey, 2016. "Decision Thresholds and Changes in Risk for Preventive Treatment," Post-Print halshs-01250983, HAL.
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    4. Krieger, Miriam & Mayrhofer, Thomas, 2012. "Patient Preferences and Treatment Thresholds under Diagnostic Risk – An Economic Laboratory Experiment," Ruhr Economic Papers 321, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    5. Iztok Hozo & Benjamin Djulbegovic, 2008. "When Is Diagnostic Testing Inappropriate or Irrational? Acceptable Regret Approach," Medical Decision Making, , vol. 28(4), pages 540-553, July.
    6. Berger, Loïc & Bleichrodt, Han & Eeckhoudt, Louis, 2013. "Treatment decisions under ambiguity," Journal of Health Economics, Elsevier, vol. 32(3), pages 559-569.
    7. Christophe Courbage & Béatrice Rey, 2016. "Decision Thresholds and Changes in Risk for Preventive Treatment," Health Economics, John Wiley & Sons, Ltd., vol. 25(1), pages 111-124, January.
    8. Christophe Courbage & Béatrice Rey, 2006. "Prudence and optimal prevention for health risks," Post-Print halshs-03353388, HAL.
    9. Eeckhoudt, Louis R. & Lebrun, Thérèse C. & Sailly, Jean-Claude L., 1984. "The informative content of diagnostic tests: An economic analysis," Social Science & Medicine, Elsevier, vol. 18(10), pages 873-880, January.
    10. Paulin Basinga & Juan Moreira & Zeno Bisoffi & Bettina Bisig & Jef Van den Ende, 2007. "Why Are Clinicians Reluctant to Treat Smear-Negative Tuberculosis? An Inquiry about Treatment Thresholds in Rwanda," Medical Decision Making, , vol. 27(1), pages 53-60, January.
    11. Christophe Courbage & Béatrice Rey, 2006. "Prudence and optimal prevention for health risks," Health Economics, John Wiley & Sons, Ltd., vol. 15(12), pages 1323-1327, December.
    12. Louis Eeckhoudt & Christian Gollier, 2005. "The impact of prudence on optimal prevention," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(4), pages 989-994, November.
    13. Timo Heinrich & Thomas Mayrhofer, 2018. "Higher-order risk preferences in social settings," Experimental Economics, Springer;Economic Science Association, vol. 21(2), pages 434-456, June.
    14. Miriam Krieger & Thomas Mayrhofer, 2017. "Prudence and prevention: an economic laboratory experiment," Applied Economics Letters, Taylor & Francis Journals, vol. 24(1), pages 19-24, January.
    15. Haering, Alexander & Heinrich, Timo & Mayrhofer, Thomas, 2017. "Exploring the consistency of higher-order risk preferences," Ruhr Economic Papers 688, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    16. Peter P. Wakker, 2008. "Lessons Learned by (from?) an Economist Working in Medical Decision Making," Medical Decision Making, , vol. 28(5), pages 690-698, September.
    17. Felder, Stefan & Mayrhofer, Thomas, 2011. "Higher-Order Risk Preferences – Consequences for Test and Treatment Thresholds and Optimal Cutoffs," Ruhr Economic Papers 287, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
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    Cited by:

    1. Felder, Stefan, 2020. "The treatment decision under uncertainty: The effects of health, wealth and the probability of death," Journal of Health Economics, Elsevier, vol. 69(C).
    2. Blondel, Serge & Langot, François & Mueller, Judith E. & Sicsic, Jonathan, 2021. "Preferences and COVID-19 Vaccination Intentions," IZA Discussion Papers 14823, Institute of Labor Economics (IZA).
    3. Christophe Courbage & Richard Peter, 2021. "On the effect of uncertainty on personal vaccination decisions," Health Economics, John Wiley & Sons, Ltd., vol. 30(11), pages 2937-2942, November.

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    More about this item

    Keywords

    Decision thresholds; Diagnostics; Treatment; Diagnostic risk; Therapeutic risk;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • I19 - Health, Education, and Welfare - - Health - - - Other

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