Vol.1, No.4, 304-312 (2009)
SciRes Copyright © 2009 Openly accessible at http://www.scirp.org/journal/HEALTH/
Cost-benefit analysis of screening for diabetic
retinopathy among Chinese type 2 diabetes: decision
from different perspectives of a p opulation-based study
in Kinmen, Taiwan
Ching-Ching Peng1, Pesus Chou2, Tao-Hsin Tung1,3, Wu-Hsiung Chien1, Fenq-Lih Lee4, Shih-Jen
Chen4, Shih-Tzer Tsai5, Chi-Ming Liu1,2, Jorn-Hon Liu1,6*
1Cheng Hsin General Hospital, Taipei, Taiwan, China; ch2876@chgh.org.tw
2Community Medicine Research Center & Institute of Public Health, National Yang-Ming University, Taipei, Taiwan, China
3Faculty of Public Health, School of Medicine, Fu-Jen Catholic University, Taipei, Taiwan, China
4Department of O p hthalmology, Ve terans General Hospital, Taipei, Taiwan, China
5Department of Medicine, Veterans General Hospital, Taipei, Taiwan, China
6Faculty of Medicine, School of Medicine, National Ya ng-Ming University, Taipei, Taiwan, China
*Corresponding author
Received 3 September 2009; revised 14 September 2009; accepted 15 September 2009.
The purpose of this study is to explore whether
it is worthwhile to launch a routine diabetic
retinopathy (DR) screening for blindness pre-
vention among Chinese type 2 diabetes from
different perspective based on the popula-
tion-based study in Kinmen, Taiwan. A total of
971 community dwelling adults previously di-
agnosed with type 2 diabetes in 1991-1993 un-
derwent DR screening in 1999-2002 by a panel
of ophthalmologists using on-site indirect oph-
thalmoscopy and 45-degree color fundus retinal
photographs. The cost-benefit analysis is used
to evaluate the DR screening. In terms of bene-
fit-cost ratio, the different screening programs
for DR could save New Taiwan Dollars (NTD)
from 14.38 to 36.83 in discounted costs for each
dollar incurred in different screening years from
the societal viewpoint for Taiwan and save NTD
from 0.81 to 1.80 in different screening years
from health care payer’s perspective. The av-
erage estimate of willingness-to-pay to translate
into benefit yields NTD from 937.8 to 4,689 be-
nefits per case due to DR screening in different
screening years during 10-year follow-up. The
net present value of the DR screening w ere NTD
from -167,318 to -307,251.2 in different screening
years. In conclusion, it is worthwhile to initial a
routine DR screening of Chinese type 2 d iabetes
for blindness prevention from the societal per-
spective but not from consumer decision based
on the willingness-to-pay perspective.
Keywords: Type 2 Diabetes; Diabetic Retinopathy;
Cost-Benefit Analysis; Population-Based Study
In developed countries, diabetic retinopathy (DR) is a
major microvascular disease and is associated with in-
creased visual impairment in type 2 diabetics [1]. In
Taiwan, previous community-based studies showed that
the prevalence and annual incidence density of DR were
an estimated 15% to 45% and 6.62x10-2/year (95%CI:
5.36x10-2/year—8.06x10-2/year), respectively [2,3]. Since
the average time from development of no DR to blind-
ness is approximately 26.5 years in persons with type 2
diabetes, assessing the progression of DR by screening is
a worthwhile preventive measure [4].
Whether screening for DR is worthwhile is also con-
tingent on whether subjects are willing to pay the eye
screening program that would decrease the risk of
blindness. Benefit due to the reduction of severe com-
plication in cost-benefit analysis is often measured by
the human capital approach for which the value of eye
screening program is measured by its effect on the pa-
tient’s sight-time earning. According to welfare eco-
nomic theory, the benefit to an individual of a service or
an intervention is defined as that individual’s maximum
willingness to pay (WTP) for the service or intervention
[5]. WTP is a contingent valuation and involves using a
hypothetical survey to directly ask individuals the
maximum amount they are willing to pay for the com-
modity in question [6,7]. Due to the medical resources
are limited, the government is in a dilemma about
C. C. Peng et al. / HEALTH 1 (2009) 304-312
SciRes Copyright © 2009 Openly accessible at http://www.scirp.org/journal/HEALTH/
whether it is necessary to popularize the eye screening
programs among type 2 diabetes into a nationwide pro-
gram. Our previous study have showed that degree of
DR was the independent factor affecting WTP values in
DR screening among community-dwelling adults with
type 2 diabetes [8]. The purpose of this study is further
to conduct a cost-benefit analysis to determine whether it
is worthwhile to launch eye screening program for
blindness prevention among population-based adults
diagnosed with type 2 diabetes in Kinmen, Taiwan.
2.1. Study Design and Subjects
The pro cedu r es fo r co st - b en ef it analysis of DR screening
among community dwelling patients with type 2 diabe-
tes in 1999-2003 showed in Figure 1. Data used in this
study were derived from a population-based screening
for type 2 diabetes targeted to subjects aged 30 years or
more in Kinmen, Taiwan, between January 1991 and
December 1993. Details of the study design and execu-
tion have been described in full elsewhere [9]. Identifi-
cation for type 2 diabetes was based on the WHO 1999
definition [10], that is, su bjects with FPG 126mg/dl or
2-hr postload glucose concentration 200mg/dl were
defined as having type 2 diabetes. Subjects with a his-
tory of type 2 diabetes and who received medication
were defined as known cases. A total of 1,123 cases of
type 2 diabetes aged 30 and over were found based on
the population survey carried out by the Yang-Ming
Crusade, which was organized from the medical students
of the National Yang-Ming University, Taipei, Taiwan.
The screened diabetic subjects then were referred to the
region hospital for further treatment and follow-up rou-
tinely. Of 1,123 subjects with type 2 diabetes, 152 emi-
grated or died between 1994 and 1998. After excluding
these subjects, the remaining 971 had the uptake of fun-
dus check-up annually since 1999. A panel of popula-
tion-based follow-up screening of DR was then con-
ducted annually from 1999 to 2002. These 971 partici-
pants were invited to receive eye screening by invitation
letter or calls. Based on the eye screening results, differ-
ent treatment strategies were used, that is, routine fol-
low-up for patients with mild or moderate DR and laser
photocoagulation for patients with severe DR. In addi-
tion, informed consent was obtained from all participan ts
before the investigation began. Access to personal re-
cords was approved by the hospital human subjects re-
view board at Cheng-Hsin General Hospital, Taipei,
We initiated a DR screening program after six years of
mass screening because Kinmen is an offshore island
from Taiwan lacking medical resources. Here, DR
screening requires mobilizing manpower and equipment,
coordinating between clinical personnel and field work,
and transporting to the island. By 1999, a team for DR
screening was successfully organized, including 4 well-
trained senior ophthalmologists from Veterans General
Hospital, Taipei, 4 clinical nurses, and 20 medical stu-
dents from the Yang-Ming Crusade.
2.2. Screening and Diagnosis for Diabetic
The diagnosis of DR was based on the on-site direct and
indirect ophthalmoscopic examination and the sin-
gle-field fundus photographs that analyzed later. On-site
screening was conducted by two ophthalmologists using
direct and indirect ophthalmoscopy after pupil dilatation
with topical 0.5% mydriacyl. The graders wrote down
the diagnosis and marked the findings in the record.
Then the subj ects were taken on e 45-d egree color fu ndus
photography with Polaroid 600 films (Polaroid, Nether-
land) centered at macula in each eye using Topcon fun-
dus camera (TRC-50VT, Tokyo, Japan). The single-field
photographs were then printed out and filed. Grading of
the photographs was done by two well-trained senior
ophthalmologists beginning no later than one month
after the screening. The final grading of the DR depends
on the summed interpretation of the photographs and the
recorded ophthalmoscopic gradings. From the Reti-
nopathy Disease Severity Scale, diabetic subjects were
classified according to the most severe changes in the
worse eye [11]. In addition, legal blindness was defined
as a best-corrected visual acuity of 0.1 (6/60) or worse in
the better eye [8].
A pilot study was performed in 50 randomly selected
type 2 diabetic patients to set up the consistent diagnosis
of DR among ophthalmologists. The kappa statistic of
0.73 (95%CI: 0.48—0.98) between the observers re-
vealed a good interobs erver reliability.
2.3. Cost-Benefit Analysis of Screening for
Diabetic Retinopathy
2.3.1. Markov Decision Model of Screening for
Diabetic Ret inopathy
In this study, the cost-benefit analysis tool of screening
for DR among subjects with type 2 diabetes was based
on TreeAge software (DATA 3.5, Tree-Age, Inc., Wil-
liamstown MA) for medical decision analysis. A deci-
sion analysis using the Markov Decision Model was
constructed to compare different screening regimes for
DR with no screening group (see Figure 2). The as-
sumption of no screening group was that except eye
screening, diabetic patients still received routine medical
care until they become blind. Accord ing to the theory of
stochastic process, the Markov chain model is deter-
mined by both the initial state and the transition matrix.
The model starts from the decision to screen or not to
screen and the overall expected value is based on ex-
pected values of end nodes rather than all nodes. For
each decision, there are six states of disease natural his
C. C. Peng et al. / HEALTH 1 (2009) 304-312
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Table 1. Cost assumptions, willingness-to-pay value, transition probabilities in decision analysis
of screening for diabetic retinopathy.
Parameter Value
Annual direct cost (NT dollars)
Screening cost1 2,298
Drug cost2 10,857
Regular clinics fee3 509
Laser photocoagulation4 10,970
Vitrectomy5 10,840
Total 35,474
Annual indirect cost (NT dollars)
Gross Domestic Product, GDP 452,168
Willingness-to-pay value(NT dollars) [8]
No DR 440.1331.6
NPDR 450.0298.8
PDR 683.3285.5
Legal blindness 822.2192.2
Total 468.9327.7
Annual transition probability (%) [4]
No DRMild NPDR 7.37
Mild NPDRModerate NPDR 19.37
Moderate NPDRSevere NPDR 17.41
Severe NPDRPDR 28.95
PDRLegal blindness 21.10
1Screening cost includes clinician’s fee, vision examination, pupil dilation, slit lamp contact mirror fundus-
copy, funduscopic exam, HbA1c, SMA-12 test , and manpower cost.
2According to the drug usage distribution from Taiwanese Association of Diabetes Educators (TADE) study
in 2004 and the payment of N atio nal Heal th Insurance.
3Regular clinics fee includes clinician’s fee and pharmacist’s fee
4Laser photocoagulation cost includes panretinal photocoagulation, two fundus color photos, and fluorescein
angiography (FAG).
5Vitrectomy cost includes vitretomy, two fundus color photos, and fluorescein angiography (FAG).
tory of DR including NDR, mild NPDR, moderate
NPDR, severe NPDR, PDR, and blindness. The initial
state distribution is based on the results of the present
study. Transition probabilities from one state to another
representing the disease natural history of DR were de-
rived from our empirical estimation, that is, the annual
transition probabilities for each stage to the next are as
follows: mild NPDR to moderate NPDR 19.37%, mod-
erate NPDR to severe NPDR 17.41%, severe NPDR to
PDR 28.95%, and PDR to blindness 21.10% [4]. For
each scenario, we calculated the expected probability of
patients aggregate experience that is accumulated in
each state during 10-year foll ow-up.
2.3.2. An Empirical Survey for the Estimation of
Cost and Willingness to Pay
Costs in the present study include direct and indirect cost.
Direct costs include cost of DR screening, drug cost,
cost of regular clinic fee, and treatment cost (for exam-
ple, laser photocoagulation and surgery). Indirect cost
includes only productivity loss of the patient because of
time taken off work for treatment. The average time
taken off work for treatment depends on the professions’
opinion. In addition, WTP was assessed by the following
question: “What is the most price that you would be
willing to pay for routine screening for DR that reduces
the risk of fully blindness?” The WTP amounts
C. C. Peng et al. / HEALTH 1 (2009) 304-312
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Table 2 . Cost-benefit analysis using the human-capital approach of different screening programs for diabetic reti-
Screening group Non-screening groupNet cost
Annual screening
Direct cost
Screening cost 21,900 0 21,900
Other cost 113,403 131,219 -17,816
Total 135,303 131,219 4,084
Indirect cost 36,704 333,911 -297,207
Total (Direct + Indirect cost) 172,007 465,130 -293,123
Biennial screening
Direct cost
Screening cost 10,950 0 10,950
Other cost 116,216 131,219 -15,003
Total 127,166 131,219 -4,053
Indirect cost 70,435 333,911 -263,476
Total (Direct + Indirect cost) 197,601 465,130 -267,529
3-yearly screening
Direct cost
Screening cost 7,300 0 7,300
Other cost 118,832 131,219 -12,387
Total 126,132 131,219 -5,087
Indirect cost 107,629 333,911 -226,282
Total (Direct + Indirect cost) 233,761 465,130 -231,369
4-yearly screening
Direct cost
Screening cost 5,475 0 5,475
Other cost 121,199 131,219 -10,020
Total 126,674 131,219 -4,545
Indirect cost 144,729 333,911 -189,182
Total (Direct + Indirect cost) 271,403 465,130 -193,727
5-yearly screening
Direct cost
Screening cost 4,380 0 4,380
Other cost 123,330 131,219 -7,889
Total 127,710 131,219 -3,509
Indirect cost 180,479 333,911 -153,432
Total (Direct + Indirect cost) 308,189 465,130 -156,941
C. C. Peng et al. / HEALTH 1 (2009) 304-312
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Table 3. The benefit-cost ratio estimates of different screening programs for diabetic retinopathy.
Benefit-cost ratio
Payer’s perspective Society perspective
Annual screening 0.81 (17,816/21,900) 14.38 ((17,816+297,207)/21,900)
Biennial screening 1.37 (15,003/10,950) 25.43 ((15,003+263,476)/10,950)
3-yearly screening 1.70 (12,387/7,300) 32.69 ((12,387+226,282)/7,300)
4-yearly screening 1.83 (10,020/5,475) 36.38 ((10,020+189,182)/5,475)
5-yearly screening 1.80 (7,889/4,380) 36.83 ((7,889+153,432)/4,380)
Figure 1. The procedure of cost-benefit analysis of screening for diabetic retinopathy among type 2 diabetics in Kinmen.
Cost-benefit analysis
Cost-benefit analysis of diabetic
retinopathy screening
Laser photocoagulation patients
with severe DR
Routine follow up for patients
with mild or moderate DR
725 Type 2 diabetes received DR
Screening for
diabeti retin opathy
DR screening for Type 2 diabetics in
1999-2002 (n=97 1)
Loss to follow-up
Routine treatment and follow
up by region hosp ital Type 2 diabetes
WHO (1999) criteria
Migrated out or death
Screening for type 2
A community-based screening
regime f or type 2 diabetes (n=12,489)
C. C. Peng et al. / HEALTH 1 (2009) 304-312
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others others
others ot hers
Blindness Blindness
Blindness Blindness
Blindness Blindness
Blindness Blindness
Blindness Blindness
Blindness Blindness
Blindness Blindness
Blindness Blindness Blindness
others others PDR
Blindness PDR
Scr eening for
Retinopathy in
Type ІІ DM patients
sever eNPDR
severeNP DR
sever eNPDR
Figure 2. Markov decision model for two options, screening and non-screening for diabetic
for a routine screening for DR were elicited by dis-
crete-choice, that is, subjects were presented a single
price for a screening program that would yield a speci-
fied health change. Subjects either accept or reject the
price. By randomly varying the price across a number of
different subsamples, the mean WTP could be estimated
[8]. To maintain consistency of interview quality, all
information on WTP measurements was also collected
by one well-trained interviewer. All costs are expressed
as New Taiwan Dollars (NTD).
2.3.3. Cost-Benefit Analysis and Discount Rate
Using the human-capital approach, net cost (saving) for
different screening programs of DR, taking direct cost
and indirect cost into account, was calculated. Bene-
fit-cost ratios were calculated as the reduction blindness
costs divided by the cost of the screening programs. Us-
ing WTP approach, net present value (NPV) was also
calculated on the basis of the total benefit (calculated by
the WTP method) minus screening cost of DR. To take
time preference into account, that is, receiving benefit
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earlier and incurring cost later, we discounted all costs
and benefits to the present value at 5% annually.
The annual direct cost, annual indirect cost, WTP value,
and annual transition probability in decision analysis of
DR screening are shown in Table 1. Direct costs include
screening cost, drug cost, regular clinics’ fees, laser
photocoagulation, and vitrectomy. Indirect cost repre-
sents lost productivity according to patient’s disease
state, estimated using the Gross Domestic Product (GDP)
value in 2004.
Table 2 shows total discounted direct costs and indirect
costs using the human capital approach. Annual screening,
biennial screening, 3-yearly screening, 4-yearly screening,
and 5-yearly screening regimens could save NTD17,816,
NTD15,003, NTD12,387, NTD10,020, and NTD7,889
per case in discounted direct costs (except screening cost),
res p e ct iv e l y. From payer’s perspective, the discounted net
total direct costs for DR screening program were NTD
4,084, NTD-4,053, NTD-5,087, NTD-4,545, and NTD-
3,509 for annual screening, biennial screening, 3-yearly
screening, 4-yearly screening, and 5-yearly screening, re-
spectively. The discounted indirect costs saved per case by
DR screening program were NTD297,207, NTD 263,476,
NTD226,282, NTD189,182, and NTD153,432 for annual
screening, biennial screening, 3-yearly screening, 4-yearly
screening, and 5-yearly screening, respectively. Thi s yi el d
NTD293,123 (annual screening), NTD267,529 (biennial
screening), NTD231,369 (3-yearly screening), NTD
193,727 (4-y e a r l y s c ree ning ) , an d NTD156,941 (5-yea r l y
screening) net saving per case due to DR screening pro-
gram from the societal perspective.
As Table 3 shows, DR screening programs could save
NTD14.38 (annual screening), NTD25.43 (biennial
screening), NTD32.69 (3-yearly screening), NTD36.38
(4-yearly screening), and NTD36.83 (5-yearly screening)
from the societal viewpoint and save NTD0.81 (annual
screening), NTD1.37 (biennial screening), NTD1.70 (3-
yearly screening), NTD1.83 (4-yearly screening), and
NTD1.80 (5-yearly screening) in discounted costs for
each NTD dollar incurred in DR screening programs
from health care payer’s perspective.
The average estimate of WTP in order to reduce
blindness as shown in Table 1 is NTD468.9. Translating
this figure into benefit yields NTD4,689 (annual screen-
ing), NTD2,344.5 (biennial screening), NTD1,406.7 (3-
yearly screening), NTD1,172.3 (4-yearly screening), and
NTD 937.8 (5-yearly screening) benefit per case due to
DR screening during 10-year follow-up. The NPV of the
screening programs, taking indirect cost into account,
were NTD-167,318, NTD-195,256.5, NTD-232,354.3,
NTD-270,230.7, and NTD-307,251.2 of annual screen-
ing, biennial screening, 3-yearly screening, 4-yearly
screening, and 5-yearly screening, respectively.
4.1. Implications of Cost-Benefit
Analysis for Diabetic Retinopathy
In Taiwan, few population-based studies have attempted
to quantify the cost and benefit of DR screening pro-
grams. The present study uses cost-benefit analysis to
assess whether a DR screening program against non-
screening group is worthwhile in Taiwan from different
perspectives. The results indicate that indirect costs play
an important role in the evaluation of the DR screening
program. Annual screening program could save the most
(NTD297,207) per case in discounted indirect costs
compared with non-screening group. From health care
payer’s perspective, the discounted net cost for annual
screening was NTD4,084 per case. This indicates that
the benefit from the annual screening program of DR
can not outweigh the cost incurred in the DR screening
program from health care payer’s perspective. Taking
indirect cost into account, the NTD293,123 net saving
per case suggest the annual screening program is rather
worthwhile from the societal perspective.
In addition, using the WTP approach, the present
study shows it is not worthwhile to have screening for
DR from the perspective of WTP due to the negative
result of NPV value. It should be noted that the WTP
approach is a contingent-valuation method that reflects
consume surplus of getting DR screening. Since the
mean estimate of WTP (NTD468.9) for the DR screen-
ing program was far below the current expense for di-
rect costs of DR screening (NTD2,190) per case. This
suggests that they could not get any surplus from the
purchase of screening program. This accounts for why
the results of NPV are negative. If the estimate of WTP
is raised to NTD2,500, this means that if people have to
pay only NTD2,190 for benefits they value at
NTD2,500 then they get a surplus of NTD310 from the
purchase of screening for DR. Results from the WTP
suggest that the amount diabetics in Kinmen are willing
to pay for the screening program is lower than th e bene-
fit they value. In terms of consumer decision based on
the perspective of WTP, it may not be worthwhile to
launch a DR screening program.
4.2. The Efficiency and Advantage for
Routine Diabetic Retinopath y
The surveillance and treatment of diabetes-related com-
plications should be part of routine care in all type 2
diabetes [4]. The benefits of DR screening rest on the
additional time patients have to obtain treatment. If one
wishes to reduce the loss of vision associated with DR,
C. C. Peng et al. / HEALTH 1 (2009) 304-312
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then performing the screening is more important than
the type of screening used [12,13]. During the first year
of DR screening, savings associated with preventing one
single case of blindness could cover the cost of the
screening program [12]. The threat of blindness is less
severe in type 2 diabetes because DR progresses more
slowly than in type 1 diabetes. Although the eye care
program saved 21 sight-years [14], it was less efficient
in patients with type 2 diabetes.
The optimal screening interval is determined by the
disease natural history with regard to the screening pol-
icy [4]. Many evidence-based studies have showed that
screening for and treating DR is extremely efficiency
and cost-effective. From the health insurer’s viewpoint,
routine screening and treatment of eye disease in dia-
betic patients cost USD 3190 per QALY saved [15].
Duration of blin dness drops by 0.48 and 0.13 years with
increase in year of onset of the disease whereas effec-
tiveness decreases in type 2 diabetic patients [16]. Pre-
vention screening programs aimed at improving eye
care for type 2 diabetic patients results in both highly
cost-effective health care and substantial federal budg-
etary savings [15,17]. In addition, our previous studies
have demonstrated that annual DR screening is the most
effective and efficient screening schedule for reducing
blindness compared to other screening intervals [4,17].
To take both cost and efficacy into consideration, many
organizations such as the National Committee for Qual-
ity Assurance, through Health Employer Data and In-
formation Set (HEDIS) measures also recommends that
annual eye examinations be used not only as a general
guideline, but also as a quality standard in all patients
with diabetes [18]. Better diabetes management such
more strict adherence by diabetic patients and ophthal-
mologists to best practice guidelines could have enor-
mous protective impacts in cases of visual loss caused
by DR [19].
4.3. Methodological Considerations
From the methodological viewpoint, although using a
population-based follow-up study design could reduce
selection bias and increase statistical power, using pri-
mary information and calculating both direct and indi-
rect costs help us estimate the true benefit of DR
screening more closely than which has been possible
before. There are still some critiques raised from this
study. First, only three-year follow-up period, we could
not have enough sample size to predict all of the effects
of DR screening on disease variations. Second, we did
not explicitly consider the sensitivity and specificity of
the DR screening tests. Previous studies demonstrated
that indirect ophthalmoscopy performed by ophthal-
mologists has a sensitivity of approximately 85% [20],
but this may approach 100% with newer slit lamp
biomicroscopic techniques [21]. Retinal photography, an
alternative detection method for DR among diabetic
patients, has an overall sensitivity of approximately
85% [20]. That means the accuracy of DR diagnosis
could be accepted. Third, although the Kappa value for
the agreement of interobserver reliability seemed ac-
ceptable [22], non-differential misclassification-bias
identification still could have occurred. Fourth, we did
not estimate the influence of covariates such as duration
of type 2 diabetes or HbA1c level . Because severe and
very severe NPDR without macular edema is associated
with high risk of progression to PDR, 10—50% of those
with type 2 diabetes and this level of NPDR will de-
velop PDR within 1 year [23]. Further long-term studies
should be conducted to clarify whether patients with
better glycemic control or in an early stage of DR could
benefit from less frequent screening intervals. Finally, it
should be noted that the estimates used in this analysis
were based on relatively small samples, that is, the ag-
gregate estimates may reflect a reasonable population,
but not all Chinese with type 2 diabetes. Further study
of those inadequ ately represented is needed.
In conclusion, this study revealed that it is worthwhile to
launch a routine DR screening program of Chinese type
2 diabetes for blindness prevention from the societal
perspective but not from consumer decision based on the
perspective of WTP.
This study was also supported by the grants from the National Science
Council (NSC-95-2314-B-350-002-MY3) and (NSC-98-2314-B-350-
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