Oregon's Methods: Did Cost-Effectiveness Analysis Fail?

Abstract

In conclusion, as the Oregon Health Services Commission itself determined, the initial method it used to set priorities was crude. There were many technical problems that caused it to generate counterintuitive results, and its failure can easily be explained without impugning the use of cost-effectiveness analysis. Furthermore, there is nothing inherent in cost-effectiveness analysis that renders it incapable of being used in a priority-setting exercise such as that undertaken in Oregon. When the Oregon commission identified the problems with its initial methodology, it took the appropriate step of revising its methods to try to correct the problems. This article has focused on the lessons that can be learned from the failure of the initial method. However, whatever the methodological and philosophical issues raised by the initial priority list, the ultimate question for Oregon is whether the revised method used to develop the final priority list corrected the problems sufficiently to justify approving Oregon's plan.