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Medical decisions often involve tradeoff among competing criteria. For example, patients with third-party health insurance are primarily concerned about maximizing their quality-adjusted lifespan, since the majority of the cost burden typically falls on the third-party payer. On the other hand, third-party payers are incented to minimize total healthcare-related costs. Therefore, third-party payers must weigh the short-term cost of treatment against the long-term benefits of avoiding more costly health outcomes associated with disease progression and adverse events. The goal of the societal perspective is to achieve a reasonable balance among these competing criteria of quality-adjusted lifespan and costs. Treatment of diabetes provides a good example of the need to apply multicriteria decision-making models to treatment decisions. Chronic diseases such as diabetes are associated with high medical costs and a large number of available treatment options. In this paper, we use a Markov decision process (MDP) to show how decision-maker perspectives can influence medical treatment decisions related to cardiovascular risk management in patients with type 2 diabetes. We compare optimal treatment decisions from three different perspectives: societal, patient, and third-party payer. We further formulate an inverse MDP model to estimate the implied monetary value of a year of life, from the societal perspective, according to current U.S. treatment guidelines.
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