The treatment decision under uncertainty: The effects ofhealth, wealth and the probability of death

Medical treatment reduces diagnostic risk, increases therapeutic risk and lowers the proba-bility of death. This paper analyzes the effects of initial health, wealth and the probability ofdeath on the propensity to treat under diagnostic and therapeutic risk. It shows that treat-ment propensity increases with the probability of death, but can decrease with the severityof illness. The effect of wealth depends on the cross-derivative of the utility function withrespect to health and wealth. These results have implications for treatment decisions at theend of life.