ABSTRACT
This chapter explores some economic and epidemiological implications of alternative disease treatment strategies in an institutional setting such as a hospital or clinic. We modify and generalize the integrated economic/epidemiological model first introduced by Laxminarayan and Brown (2001). Laxminarayan and Brown adapted an epidemiological multicompartment model of treatment and infection from Bonhoeffer and others (1997), a characterization based, in turn, on early twentieth-century population models of disease transmission and infection. Laxminarayan and Brown added an economic objective function that incorporates explicit assessment of the present value of the costs and benefits of accelerated disease reduction caused by treatment. Laxminarayan and Brown derived important qualitative conclusions about how to optimally treat a diseased population, showing how treatment and the corresponding buildup of antibiotic resistance are similar to the fundamental economic problems of optimally exploiting a nonrenewable resource. As Laxminarayan and Brown argued, in a closed system, the population of individuals responsive to or susceptible to antibiotic treatment can be thought of as a resource with positive economic value. Treatment yields a stream of benefits associated with accelerated recovery of the diseased population, but at the same time, antibiotic resistance as a result of treatment leads to a “draw down” of the stock of susceptibility. The optimal treatment decision thus must account for the dynamic trade-off associated with immediate disease reduction gains and long-term future resistance buildup costs.
