Generalized Risk-Adjusted Cost-Effectiveness (GRACE) aligns value assessment with the preferences and needs of real-world patients. Evidence has accumulated that traditional cost-effectiveness (CE) undervalues treatments of severe illness, and US policymakers have prohibited its use because it does not treat life-extension for disabled people equitably. GRACE resolves these limitations without abandoning the rigorous mathematical framework afforded by decades of research on the theory and practice of cost-effectiveness. GRACE generalizes CE, relaxing some of its unrealistic assumptions. It complies with US law that prohibits other forms of value assessment that discriminate against the disabled. And, GRACE provides a rigorous way of valuing treatments with risks of non-response or adverse events, an increasingly important feature in an environment where many expensive therapies come with substantial risks of non-response.
Darius Lakdawalla, PhD and Chuck Phelps, the inventors of GRACE, wrote a book that goes into more detail.
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