The last twenty years has seen a substantial growth in the literature on economic evaluation in health care. In addition, since Australia made economic evaluation an important component of its decision making process on the reimbursement of drugs in 1993, several jurisdictions have adopted...

Abstract We analyse the properties of optimal price adjustment to hospitals when no lump-sum transfers are allowed and when prices differ to reflect observable exogenous differences in costs. We find that: (a) when the marginal benefit from treatment is decreasing and the cost function is the...