Discounting in economic evaluations: Stepping forward towards optimal decision rules

Hugh Gravelle, Werner Brouwer, Louis Niessen, Maarten Postma, Frans Rutten

Research output: Contribution to journalArticlepeer-review


The National Institute for Clinical Excellence has recently changed its guidelines on discounting costs and effects in economic evaluations. In common with most other regulatory bodies it now requires that health effects should be discounted at the same rate as costs. We show that the guideline leads to sub-optimal decisions because it fails to account for the changing value of health. NICE (and other regulatory bodies) should either use differential discounting or stipulate how the changing value of health should otherwise be dealt with. We also show how binding health service budget constraints should be incorporated in evaluations. Copyright (c) 2006 John Wiley & Sons, Ltd.

Original languageEnglish
Pages (from-to)307-317
Number of pages11
JournalHealth Economics
Issue number3
Publication statusPublished - Mar 2007


  • cost-effectiveness
  • discounting
  • value of health

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