Economic costs will vary with the health care environment, yet a cost-of-illness estimate necessarily depends on the status quo. This intransigence may limit policymakers' ability to draw meaningful inferences from such a study. This paper considers the behavioral and regulatory assumptions that underlie cost-of-illness estimates. The authors present several case studies which reveal the extent to which cost-of-illness can vary across regulatory regimes, and they show that costs can be quite sensitive to patient and provider financial incentives.
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