ABSTRACT
Several concerns have been raised about the effects that cost-effectiveness based medical decision-making (CEM) might have on resource allocation. This chapter reviews these concerns and looks at how CEM is developing. CEM is associated with concerns about utilitarianism and market failure. These concerns are, on the whole, parallel to those seen in evidence-based medicine (EBM). In response to these problems, amendments to the process of CEM are proposed. These amendments include: the unification of CEM and EBM, the development of multidimensional outcomes, and the development of more complex models. The health compass approach defines the outcomes of CEM in disease states and looks to shift the emphasis towards the most important outcome in each disease. It also helps to decide if the outcomes to be measured are process-orientated, for example, cost or clinical, or focused, or person orientated. The decision about the major outcome enables the direction of the CEM to be determined.
