Spring 2008 Seminar Series

DATE: May 8, 2008
LOCATION: E40-298
TIME: 4:15pm
Reception immediately following in the ORC ConferenceRoom, E40-106

SPEAKER:
Chris P. Lee

TITLE
Lessons from Renal Dialysis as the Benchmark for Society's Willingness to Pay for Medicine

ABSTRACT
The incremental cost-effectiveness ratio (ICER) of renal dialysis has long been used as the benchmark for the amount of money society should pay for life-prolonging medical interventions. This stems from the fact that renal dialysis has traditionally been covered universally and (virtually) fully by Medicare which was a unique development in the history of US health care.

In this talk, I discuss the recent efforts of Stefanos Zenios (Stanford GSB) and I to update and analyze the dialysis ICER benchmark using simulation and computational inverse optimization methodologies. The observations that we make have broad policy and economic implications in terms of Medicare's dialysis program and the racial disparity therein, health plans' setting of coverage policies, appropriate compensation in loss-of-life events, and the equitable distribution of scarce health care resources.