An extension of the real option approach to the evaluation of health care technologies: the case of positron emission tomography


This paper aims to incorporate option values into the economic evaluation of positron emission tomography (PET). The installation of this equipment requires a substantial capital outlay, while uncertainty, especially regarding the possibility of new applications, is relevant, because the evidence available is still insufficient. Treating the number of examinations to provide as a stochastic variable, the cost–effectiveness analysis is extended to include the value of flexibility both with respect to the timing of investment and to the size of the project. The threshold values of the stochastic variable that ensure the cost–effectiveness of a PET scan according to this approach are obtained as a function of the value of the incremental effectiveness.

This is a preview of subscription content, access via your institution.


  1. Barone-Adesi G., Whaley R. (1986) Efficient analytic approximation of American option values. Journal of Finance 42: 301–320

    Article  Google Scholar 

  2. Brandbury, I., Bonell, E., Boynton, J., Cummins, E., Facey, K., Iqbal, K., et al. (2002). Positron Emission Tomography (PET) imaging in cancer management. Health Technology Board for Scotland. Health Technology Assessment Report 2, Glasgow.

  3. Claxton K. (1999) The irrelevance of inference: A decision-making approach to the stochastic evaluation of health care technologies. Journal of Health Economics 18: 341–364

    Article  Google Scholar 

  4. Dietlein M., Weber K., Gandjour A., Moka D., Theissen P., Lauterbach K., et al. (2000) Cost–effectiveness of FDG-PET for the management of solitary pulmonary nodules: A decision analysis based on cost reimbursement in Germany. European Journal of Nuclear Medicine 27(10): 1441–1456

    Article  Google Scholar 

  5. Dixit A. (1994) The art of smooth pasting. Harwood Academic, Chur, Switzerland

    Google Scholar 

  6. Dixit A., Pindyck R. (1994) Investment under uncertainty. Princeton University Press, Princeton

    Google Scholar 

  7. Driffield T., Smith P. (2007) A real options approach to watchful waiting: Theory and an illustration. Medical Decision Making 27: 178–188

    Article  Google Scholar 

  8. Eckermann S., Willan A. (2007) Expected value of information and decision making in HTA. Health Economics 16: 195–209

    Article  Google Scholar 

  9. Eckermann, S., & Willan, A. (2008). Globally optimal trial design for local decision making. Health Economics, Online early. doi:10.1002/hec.1353.

  10. Gambhir S., Czernin J., Schwimmer J., Silverman D., Coleman R., Phelps M. (2001) A tabulated summary of the FDG-PET literature. Journal of Nuclear Medicine 42: 1S–93S

    Google Scholar 

  11. Huisman K. (2001) Technology investment: A game theoretic real option approach. Kluwer, Dodrecht, The Netherlands

    Google Scholar 

  12. ICES. (2004). Health technology assessment of positron emission tomography (PET) in oncology—a systematic review. Institute for Clinical Evaluative Sciences.

  13. Klose T., Leidl R., Buchmann I., Brambs H., Reske S. (2000) Primary staging of lymphomas: Cost–effectiveness of FDG-PET versus computed tomography. European Journal of Nuclear Medicine 27(10): 1457–1464

    Article  Google Scholar 

  14. Lasserre P., Moatti J., Soubeyran A. (2006) Early initiation of highly active antiretroviral therapies for AIDS: Dynamic choice with endogenous and exogenous learning. Journal of Health Economics 25: 579–598

    Article  Google Scholar 

  15. Müller A., Stratmann-Schöne D., Klose T., Leidl R. (2002) Overview of economic evaluation of Positron-Emission Tomography. European Journal of Health Economics 3(1): 59–65

    Article  Google Scholar 

  16. Palmer S., Smith P. (2000) Incorporating option values into the economic evaluation of health care technologies. Journal of Health Economics 19(5): 755–766

    Article  Google Scholar 

  17. Robert, G., & Milne, R. (1999). Positron emission tomography: Establishing priorities for health technology assessment. Health Technology Assessment, 3(16).

  18. Schwartz E., Trigeorgis L. (2001) Real options and investment under uncertainty: Classical readings and recent contributions. MIT Press, Cambridge, MA

    Google Scholar 

Download references

Author information



Corresponding author

Correspondence to Paolo Pertile.

Rights and permissions

Reprints and Permissions

About this article

Cite this article

Pertile, P. An extension of the real option approach to the evaluation of health care technologies: the case of positron emission tomography. Int J Health Care Finance Econ 9, 317–332 (2009).

Download citation


  • Cost–effectiveness analysis
  • Real options
  • Positron emission tomography

JEL Classification

  • C61
  • D61
  • D81
  • I12