OBJECTIVES: This study determined the cost-effectiveness of expanding methadone maintenance treatment for heroin addiction, particularly its effect on the HIV epidemic.

METHODS: We developed a dynamic epidemic model to study the effects of increased methadone maintenance capacity on health care costs and survival, measured as quality-adjusted life-years (QALYs). We considered communities with HIV prevalence among injection drug users of 5% and 40%.

RESULTS: Additional methadone maintenance capacity costs $8200 per QALY gained in the high-prevalence community and $10,900 per QALY gained in the low-prevalence community. More than half of the benefits are gained by individuals who do not inject drugs. Even if the benefits realized by treated and untreated injection drug users are ignored, methadone maintenance expansion costs between $14,100 and $15,200 per QALY gained. Additional capacity remains cost-effective even if it is twice as expensive and half as effective as current methadone maintenance slots.

CONCLUSIONS: Expansion of methadone maintenance is cost-effective on the basis of commonly accepted criteria for medical interventions. Barriers to methadone maintenance deny injection drug users access to a cost-effective intervention that generates significant health benefits for the general population.

The 35 chapters of The Handbook of Health Economics provide an up-to-date survey of the burgeoning literature in health economics. As a relatively recent subdiscipline of economics, health economics has been remarkably successful. It has made or stimulated numerous contributions to various areas of the main discipline: the theory of human capital; the economics of insurance; principal-agent theory; asymmetric information; econometrics; the theory of incomplete markets; and the foundations of welfare economics, among others. Perhaps it has had an even greater effect outside the field of economics, introducing terms such as opportunity cost, elasticity, the margin, and the production function into medical parlance. Indeed, health economists are likely to be as heavily cited in the clinical as in the economics literature. Partly because of the large share of public resources that health care commands in almost every developed country, health policy is often a contentious and visible issue; elections have sometimes turned on issues of health policy. Showing the versatility of economic theory, health economics and health economists have usually been part of policy debates, despite the vast differences in medical care institutions across countries. The publication of the first Handbook of Health Economics marks another step in the evolution of health economics.

In recent years, the hospital industry has been undergoing massive change and reorganization with technological innovations and the spread of managed care. As a result, the total number of hospitals countrywide has been declining, and a growing number of not-for-profit hospitals have converted to for-profit status. These changes raise two fundamental questions: What determines a hospital's choice of for-profit or not-for-profit organizational form? And how does that form affect patients and society?

This timely volume provides a factual basis for discussing for-profit versus not-for-profit ownership of hospitals and gives a first look at the evidence about new and important issues in the hospital industry. The Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions will have significant implications for public-policy reforms in this vital industry and will be of great interest to scholars in the fields of health economics, public finance, hospital organization, and management; and to health services researchers.

Also published in 1990.

In recent years, the hospital industry has been undergoing massive change and reorganization with technological innovations and the spread of managed care. As a result, the total number of hospitals countrywide has been declining, and a growing number of not-for-profit hospitals have converted to for-profit status. These changes raise two fundamental questions: What determines a hospital's choice of for-profit or not-for-profit organizational form? And how does that form affect patients and society?

This timely volume provides a factual basis for discussing for-profit versus not-for-profit ownership of hospitals and gives a first look at the evidence about new and important issues in the hospital industry. iThe Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions will have significant implications for public-policy reforms in this vital industry and will be of great interest to scholars in the fields of health economics, public finance, hospital organization, and management; and to health services researchers.

Decisions made by physicians, patients, health policy makers and health insurers determine the quality of health care that is needed and provided for. This up-to-date, comprehensive overview of medical decision making reveals a rapidly expanding field. The book covers quantitative theoretical tools for modeling decisions, psychological research on how decisions are actually made, and applied research on how physician and patient decision making can be improved.