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  • Critical care is expensive for patients, hospitals, and society.

  • Both overall health care expenditures and the proportion dedicated to critical care are increasing.

  • Cost-effectiveness studies are an important component of critical care valuation, both for new and existing therapies.

  • Market forces alone cannot be expected to result in optimal public health—policies informed by cost-effectiveness contribute to improve critical care delivery and efficiency.


Pluck the goose so as to obtain the most feathers with the least hissing.

—Jean-Baptiste Colbert, Minister of Finance to King Louis XIV of France

Critical care medicine is expensive for patients, hospitals, and society. In 2005, Medicare and Medicaid costs for critical care were $81.7 billion, accounting for 4.1% of national health expenditures and 0.66% of the gross domestic product.1 The scale of critical care delivery is also expanding, with an increasing number of hospital beds allocated to intensive care, increasing number of patient days spent in intensive care units (ICUs), and increasing occupancy rates.1 These two factors, growing costs and expanding use, have focused attention on cost-effectiveness studies as a method for appraising resource allocation decisions and weighing the value of new interventions. On March 23, 2010, President Barack Obama signed legislation to overhaul the health care system in the United States with a plan that specifically highlighted the importance of comparative effectiveness research and cost transparency.2

Interest in health care cost and quality, of course, is not new. The origin of health economics as a distinct discipline is often credited to Kenneth Arrow, who in 1963 outlined conceptual differences from general economics. He discussed the principle pareto optimal, the state of optimal cost and benefit for a system (Fig. 6-1). Conversely, when conditions are not pareto optimal, it means that resources can be redistributed with marginal gains for some and without any individual losses. Arrow stated that society will intervene through nonmarket mechanisms (eg, public policy, requests for proposals, or special institutions) when market forces alone do not result in pareto optimal health conditions. The medical care industry exemplifies this tendency to intervene when it is out of balance.3 More recently, the principle of pareto optimal has been challenged as not modeling a desirable equilibrium in health care, but it nonetheless is conceptually useful for thinking about resource allocation.


Vilfredo Pareto (1848-1923).

Source: Wikipedia.

Over the next 30 years, cost evaluations increasingly entered the medical literature. As these studies grew in number, there amassed a range of interpretations over meaning of the term cost-effective and a multitude of methodologies.4 In 1996, recognizing a need for uniformity, the US Public Health Service established standards for the conduct of rigorous cost-effectiveness analyses.5-7 The American Thoracic Society (ATS), in turn, established its own guidelines based on ...

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