Cost of illness studies: no aid to decision making? Comments on the Second Opinion by Shiell et al. ( Health Policy, 8 (1987) 317–323)

Abstract

I have recently had the opportunity to read the “Second Opinion” on Cost of Illness Studies by Shiell, Gerard and Donaldson (SGD) in volume 8, number 3 of Health Policy. The thinking of SGD contains a number of fallacies and partial truths about cost-of-illness studies. There are limitations to cost of illness studies (COI) but the Shiell, Gerard and Donaldson (SGD) criticisms are not among them. The SGD paper suffers from two fallacies. One is that cost-benefit analysis (CBA) is grounded in economic theory but CO1 estimates are not. Robinson has clearly pointed out “The human capital approach...has a strong theoretical foundation, and as such can provide useful information to decision makers in the public sector”. Robinson further points out that although, as SGD are attempting to argue, the distinction between human capital and welfare economics based methods of valuing benefits of public health programs “is usually drawn in terms of reliable numbers for one and theoretical desirability for the other.. .the important differences between the two methods are due to their connections with two distinct interpretations of the role of government in a democratic society”. According to Robinson, cost of illness studies, i.e. human capital estimates, do derive from economic theory, although they depend on a different interpretation of the role of government in a democratic society than that which gave rise to modern welfare economics [l]. The second fallacy is the implicit contention that economic theory (in the form of CBA for SGD) provides a fundamental link between analysis and policy deci-