ABSTRACT
This chapter looks at a real-life example of an effort to develop such a priority list: the Oregon Medicaid priority-setting exercise. This exercise provides an interesting counterpoint to the Model Proposal. Traditional cost-effectiveness theory dictates that in developing a priority list of services the cost of each service should be divided by some measure of the health benefit expected from treatment. Weinstein and Stason continue by observing that "[a]pplication of this procedure ensures that the maximum possible expected health benefit is realized, subject to whatever resource constraint is in effect." The approach to setting health care priorities envisioned in the Model Proposal resembles the final Oregon methodology in two important respects. First, cost is not directly considered in determining the importance of treatment. The second similarity between the two approaches is that in both cases the range of covered services can be expanded or contracted by varying the standard against which treatments are judged.
