New Findings from the TTO for Income Approach to Elicit Willingness to Pay for a QALY

Abstract

ABSTRACT. Willingness to pay (WTP) elicitations suffer from various methodological problems. This paper tests a recently proposed alternative approach to value WTP for health, making use of trade-offs between income and lifetime or quality of life. We apply three experimental elicitation procedures and analyze the responses under an additive and a multiplicative utility function over health and income.We report several interesting results. First, the data are highly skewed, but if we trim the 5% lowest and highest values, we obtain plausible WTP estimates. Second, the results differ considerably between procedures, indicating that WTP estimates are sensitive to the assumed utility function.Third, respondents appear to be loss averse for both health and money, which is consistent with assumptions from prospect theory. Finally, our results also indicate that respondents are more willing to trade quality of life than life years.

When is it too expensive? Cost-effectiveness thresholds and health care decision-making

“…In the context of the broader societal perspective, the decision rule, firmly rooted in welfare economics (e.g. [19]), can be written as [16]: 2 In which v Q denotes the consumption value of health, ΔQ the incremental gain in health (measured in QALYs) and Δc t the incremental total costs. Note that Δc t denotes the total of both health care costs (Δc h ) and broader consumption costs (Δc c ), so that Δc t = Δc h + Δc c .…”

“…New ways of deriving monetary valuations for health gains could be explored (e.g. [2,27]), if only for validation and better understanding of findings from more commonly applied methods. Further exploration of societal valuations would involve the inclusion of information relevant for equity considerations [33] and require the selection of appropriate equity concepts and appropriate inclusion in economic evaluation (e.g.…”