Adapting portfolio theory for the evaluation of multiple investments in health with as multiplicative extension for treatment synergies

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dc.contributor.author Stewart, M. en_US
dc.contributor.author Bridges, J. F en_US
dc.contributor.author Van Gool, K. en_US
dc.contributor.author King, M. en_US
dc.date.accessioned 2009-12-21T02:36:37Z
dc.date.available 2009-12-21T02:36:37Z
dc.date.issued 2005 en_US
dc.identifier 2002000415 en_US
dc.identifier.citation Bridges, J. et al. 2005 'Adapting portfolio theory for the evaluation of multiple investments in health with as multiplicative extension for treatment synergies', HEPAC The European Journal of Health Economics, vol. 3, no. 1, pp. 429-445. en_US
dc.identifier.issn 1618-7598 en_US
dc.identifier.other C1 en_US
dc.identifier.uri http://hdl.handle.net/10453/5088
dc.description.abstract Portfolio theory is central to the analysis of risk in many areas of economics but is seldom used appropriately in health economics. This contribution examines the use of portfolio theory in the context of cost-effectiveness analysis (CEA).A number of modifications are needed to apply portfolio analysis to the economic evaluation of health care interventions. First,the method of reporting the results of a CEA,and consequently some of the underlying assumptions, needs to be modified. Second, portfolio theory needs to be expressed in terms of effects on individuals aggregated to a population. Finally, one needs to allow for the possibility of synergy between the various ealth interventions. This paper derives a general formula for a portfolio of health care interventions that allows for synergies between interventions where the population effects are aggregated from individual effects. A number of special cases are also derived to highlight the nature of the formulation of the modified portfolio theory. We conclude that, while modified portfolio theory adds a theoretical foundation to health care evaluations, it may not be operational until estimates of the correlation between interventions are available, and the question of uncertainty is resolved in health care evaluation. Also, while a synergy may be present at the individual level, when aggregated over a large population it may not be significant given the standard assumption of constant returns to scale. en_US
dc.publisher Springer Science and Business Media Inc en_US
dc.relation.isbasedon http://dx.doi.org/10.1007/s11219-005-4254-x en_US
dc.title Adapting portfolio theory for the evaluation of multiple investments in health with as multiplicative extension for treatment synergies en_US
dc.parent HEPAC The European Journal of Health Economics en_US
dc.journal.volume 3 en_US
dc.journal.number 1 en_US
dc.publocation Dordrecht, The Netherlands en_US
dc.identifier.startpage 429 en_US
dc.identifier.endpage 445 en_US
dc.cauo.name Information Technology en_US


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