Feasibility of willingness-to-pay measurement in chronic arthritis

Stability of Willingness to Pay: Does Time and Treatment Allocation in a Randomized Controlled Trial Influence Willingness to Pay?

BACKGROUND

Willingness-to-pay (WTP) estimates are useful to policy makers only if they are generalizable beyond the moment when they are collected. To understand the "shelf life" of preference estimates, preference stability needs be tested over substantial periods of time.

METHODS

We tested the stability of WTP for preventative dental care (scale and polish) using a payment-card contingent valuation question administered to 909 randomized controlled trial participants at 4 time points: baseline (prerandomization) and at annual intervals for 3 years. Trial participants were regular attenders at National Health Service dental practices. Participants were randomly offered different frequencies (intensities) of scale polish (no scale and polish, 1 scale and polish per year, 2 scale and polishes per year). We also examined whether treatment allocation to these different treatment intensities influenced the stability of WTP. Interval regression methods were used to test for changes in WTP over time while controlling for changes in 2 determinants of WTP. Individual-level changes were also examined as well as the WTP function over time.

RESULTS

We found that at the aggregate level, mean WTP values were stable over time. The results were similar by trial arm. Individuals allocated to the arm with the highest scale and polish intensity (2 per year) had a slight increase in WTP toward the latter part of the trial. There was considerable variation at the individual level. The WTP function was stable over time.

CONCLUSIONS

The payment-card contingent valuation method can produce stable WTP values in health over time. Future research should explore the generalizability of these results in other populations, for less familiar health care services, and using alternative elicitation methods.

HIGHLIGHTS

Stated preferences are commonly used to value health care.Willingness-to-pay (WTP) estimates are useful only if they have a "shelf life."Little is known about the stability of WTP for health care.We test the stability of WTP for dental care over 3 y.Our results show that the contingent valuation method can produce stable WTP values.

The Importance of Skin Disease as Assessed by “Willingness-To-Pay”

Background:

To achieve optimal resource allocation in health care, it is necessary to value competing resource uses according to the benefit derived from those uses. Skin disease makes as great an impact as other serious medical conditions when assessed by effects on health-related quality of life.

Objective:

To confirm the high impact of skin disease by comparing patients' willingness to pay (WTP) to be cured or relieved from symptoms of skin and nonskin conditions.

Methods:

We searched the published literature on WTP to compare the impact of dermatologic conditions with the impact of other medical conditions. A total of 46 articles were identified of which 10 included information on willingness to pay for cure reported on a monthly basis.

Results:

WTP for skin diseases fell in the range of $125–260/month and was comparable or higher than all but one of the other identified conditions.

Conclusion:

Willingness to pay for relief from skin diseases is comparable to that for relief of other serious medical conditions. Skin diseases are associated with a significant adverse impact on patients' lives.

Factors influencing patients' willingness to pay for new technologies in hip and knee implants

Rising implant prices and evolving technologies are important factors contributing to the increased cost of arthroplasty. Assessing how patients value arthroplasty, new technologies, and their perceived outcomes is critical in planning cost-effective care, as well as evaluating new-technologies. One hundred one patients undergoing arthroplasty took part in the survey. We captured demographics, spending practices, knowledge of implants, patient willingness to pay for implants, and preferences related to implant attributes. When patients were asked if they would be satisfied with "standard of care" prosthesis, 80% replied "no". When asked if they would pay for a higher than "standard of care" prosthesis, 86% replied "yes". The study demonstrated that patients, regardless of their socio-economic status, are not satisfied with standard of care implants when newer technologies are available, and they may be willing to share in the cost of their prosthesis. Patients also prefer the option to choose what they perceive to be a higher quality or innovative implant even if the "out of pocket" cost is higher.

The state of the art of costing health care for economic evaluation

In this paper, the principles of costing health care for economic evaluation are outlined. Hypothetical and published examples are used to illustrate these principles. First, the economic concept of opportunity cost is defined. Secondly, the techniques of economic evaluation which follow from this definition are introduced: they are cost-benefit analysis, cost-effectiveness analysis and cost-utility analysis. Thirdly, a list of costs which should be considered for inclusion in either of these types of evaluation is provided, this listing being based on the concept of opportunity cost. Problems of measurement and valuation of costs are then outlined, focusing in particular on inflation, discounting, marginal costing, patient-based versus per diem costing, allocating overheads, costing capital and equipment and adjusting distorted market valuations. An example of sensitivity analysis is provided and also a checklist of questions to ask when setting up any costing exercise within an economic evaluation.

Hypothetical bias, cheap talk, and stated willingness to pay for health care

Subjects with rheumatoid arthritis (RA) enrolled in an online panel were asked to evaluate pairs of treatment alternatives with different attributes. Half of the sample saw a cheap-talk text. Preference parameters were estimated using random-parameters logit models to account for unobserved taste heterogeneity. The models also were estimated in willingness-to-pay (WTP) space instead of conventional utility space. Cheap talk not only affected the coefficient on the cost attribute, but also preferences for other attributes. WTP estimates were generally lower in cheap talk sample, except for the most important attribute and a 2-level attribute. Subjects who were presented with cheap talk discriminated between the adjoning attribute levels better than the subjects in the control sample.

The impact of economic evaluation on quality management in spine surgery

Health care expenditures are substantially increasing within the last two decades prompting the imperative need for economic evaluations in health care. Historically, economic evaluations in health care have been carried out by four approaches: (1) the human-capital approach (HCA), (2) cost-effectiveness analysis (CEA), (3) cost-utility analysis (CUA) and (4) cost-benefit analysis (CBA). While the HCA cannot be recommended because of methodological shortcomings, CEA and CUA have been used frequently in healthcare. In CEA, costs are measured in monetary terms and health effects are measured in a non-monetary unit, e.g. number of successfully treated patients. In an attempt to develop an effectiveness measure that incorporates effects on both quantity and quality of life, so-called Quality Adjusted Life Years (QUALYs) were introduced. Contingent valuation surveys are used in cost-benefit analyses (CBA) to elicit the consumer's monetary valuations for program benefits by applying the willingness-to-pay approach. A distinguished feature of CBA is that costs and benefits are expressed in the same units of value, i.e. money. Only recently, economic evaluations have started to explore various spinal interventions particularly the very expensive fusion operations. While most of the studies used CEA or CUA approaches, CBAs are still rare. Most studies fail to show that sophisticated spinal interventions are more cost-effective than conventional treatments. In spite of the lack of therapeutic or cost-effectiveness for most spinal surgeries, there is rapidly growing spinal implant market demonstrating market imperfection and information asymmetry. A change can only be anticipated when physicians start to focus on the improvement of health care quality as documented by outcome research and economic evaluations of cost-effectiveness and net benefits.

A cost-benefit analysis using contingent valuation techniques: a feasibility study in spinal surgery

OBJECTIVES

To carry out a pilot study to demonstrate the feasibility of the contingent valuation (CV) approach to identify net benefits gained from spinal interventions; and to conduct a formal cost-benefit analysis (CBA) using a retrospective study design. The study design is a CBA feasibility study using a CV survey with ex post willingness-to-pay/willingness-to-accept (WTP/WTA) questions. The CBA study was carried out in the specialty of spinal surgery.

SUMMARY OF BACKGROUND DATA

Although increasing data are gathered on the societal costs of low back pain, little information is available on how patients "value" the benefits of surgery or whether interventions in this area are indeed cost-beneficial. CV surveys are used in CBA to elicit the consumer's monetary valuations for program benefits.

MATERIALS AND METHODS

A total of 115 patients after lumbar fusion, discectomy, or decompression were asked to respond to an ex post questionnaire on their WTP/WTA for their respective intervention. Additional questions addressed socio-demographics, household income, and clinical outcome. WTP/WTA was related to the actual intervention costs and clinical outcome. The WTP and cost data were then combined within a formal CBA framework with associated 95% confidence intervals generated using bootstrapping methods.

RESULTS

The response rate was 91.3% (n = 105). 89.5% were satisfied/very satisfied with the treatment. 76.2% found the result of the operation was good/excellent and 75.7% would choose the operation for a given hypothetical intervention cost. Mean stated WTP was 20% lower than the actual operation costs (not known to respondents) for spinal fusion, although it was 37% higher for discectomy and 10% higher for decompression. The individuals' financial situation was the strongest predictor for WTP. Pain improvement, present pain, duration of hospitalization, and estimated intervention costs were significant independent predictors in the expected direction for the WTP, having controlled for socio-demographic and financial confounding variables.

CONCLUSION

This study explored the feasibility of the CV approach for spinal interventions. The approach produced results suggesting positive net benefits with their associated levels of variability for discectomy and decompression, indicating that such surgery is cost-beneficial within a CBA framework, but this conclusion is not supported in the case of spinal fusion. Nevertheless, to improve reliability of the net-benefit estimates for these interventions, we recommend further studies comparing in particular ex ante and ex post WTP methods.

Costs of rheumatoid arthritis: new estimates from the human capital method and comparison to the willingness-to-pay method

BACKGROUND

Individuals' valuation of changes in health states in monetary terms have been measured by examining changes in the direct and indirect costs of disease and by the willingness-to-pay (WTP) methodology.

METHODS

In 2002, a 2-part study was conducted in Quebec. In one part of the study, 121 rheumatoid arthritis (RA) patients from the McGill University Health Centre were mailed the Stanford Cost Assessment Questionnaire, which enabled the elicitation of direct costs and indirect costs, according to the friction cost and the human capital methods. The other part was a phone survey conducted in a representative sample of the general population and in the same sample of patients, aiming to elicit the societal WTP for a complete cure of RA in the context of 2 different scenarios: a public coverage or private insurance. These estimates were then compared.

RESULTS

Estimates of the cost of illness of RA ranged from 11,717 to 28,498 Canadian Dollars (CAD) depending on the method. These estimates are higher than those previously published in Canada from the 1990s, which is partly due to the recent and costly biological therapies and to a change in the measurement of productivity losses. These estimates are somewhat lower than the societal WTP elicited from the WTP survey, that is, 26,717 and 36,817 CAD per RA case, depending on the public or private health insurance context in which the cure would be available.

CONCLUSION

Given that neither method is ideal, data from both methods would provide an important sensitivity analysis when monetary estimates of health state changes are required.

Reliability of self-reported willingness-to-pay and annual income in patients treated for toenail onychomycosis

BACKGROUND

Willingness-to-pay (WTP) is a health economics measure that has recently been used for skin diseases to evaluate patients' quality of life. However, the reliability of this measure has not been investigated in the dermatology literature and is essential in validating its use in health services research.

OBJECTIVES

This study evaluated the test-retest reliability of self-reported annual income and WTP, a health economics measure of disease impact, in patients with toenail onychomycosis.

METHODS

Forty-six patients enrolled in a randomized clinical trial comparing two different dosing regimens of terbinafine completed a self-administered questionnaire at baseline and 1 month later. The questionnaire asked: (i) how much patients would be willing to pay for a theoretical treatment with a cure rate of 85% for their current onychomycosis (10 categories: $0-50, $51-100, to > $800); and (ii) annual income (10 categories: $0-10,000 to > $200,000).

RESULTS

Forty-four patients reported WTP at both visits, and 55% reported the same WTP. The quadratic-weighted (Fleiss-Cohen) kappa statistic indicated moderate agreement (kappa = 0.50, 95% confidence interval, CI 0.24-0.75, P < 0.01) as did the Spearman rank-order correlation coefficient (r(s) = 0.57, P < 0.01; median difference = 0, P = 0.50). Strong agreement was shown among the 42 patients who reported income at both visits; 71% reported the same annual income category (kappa = 0.72, 95% CI 0.47-0.96, P < 0.01; r(s) = 0.68, P < 0.01; median difference = 0, P = 0.77). Age, disease severity and duration, previous therapy, self-reported annual income, and medication side-effects were not statistically associated with the reliability of WTP.

CONCLUSIONS

WTP and annual income demonstrated moderate and strong test-retest reliability, respectively. Self-reported WTP can serve as a reliable measure for future health economics research on onychomycosis.

An alternative approach for eliciting willingness-to-pay: A randomized Internet trial

Open-ended methods that elicit willingness-to-pay (WTP) in terms of absolute dollars often result in high rates of questionable and highly skewed responses, insensitivity to changes in health state, and raise an ethical issue related to its association with personal income. We conducted a 2x2 randomized trial over the Internet to test 4 WTP formats: 1) WTP in dollars; 2) WTP as a percentage of financial resources; 3) WTP in terms of monthly payments; and 4) WTP as a single lump-sum amount. WTP as a percentage of financial resources generated fewer questionable values, had better distribution properties, greater sensitivity to severity of health states, and was not associated with income. WTP elicited on a monthly basis also showed promise.

Test-retest reliability of willingness to pay

We describe the results of a survey designed to assess the test-retest reliability of a method of establishing willingness to pay. Willingness to pay values for a hypothetical intervention were elicited from a randomly selected, population sample by face-to-face interview on three occasions over a period of 5 weeks. Test-retest reliability was assessed by intraclass correlation and by generalizability analysis. Reliability was acceptable but not substantial, and there was a statistically significant shift in mean value between first and second assessments. The greatest source of variation in values was the participants. There was also a substantial interaction between time and participants, suggesting that some respondents changed their answers at follow-up. The results were sensitive to the high valuations provided by four of the participants, however.

Inter-rater and test-retest reliability of three contingent valuation question formats in south-east Nigeria

This paper examines the inter-rater and test-retest reliability of willingness to pay (WTP) for insecticide-treated mosquito nets and net re-treatment using the bidding game (BG), binary with follow-up (BWFU) and a novel structured haggling technique (SH). Inter-rater reliability was evaluated by having two sets of interviewers administer questionnaires to 109 (BG), 110 (BWFU) and 103 (SH) randomly selected household heads. Test-retest reliability was investigated by repeating interviews on 146 (BG), 161 (BWFU) and 139 (SH) household heads one month after an initial survey. Data analysis used testing of means, Spearman's correlation and Pearson's correlation coefficient for test of reliability, while non-parametric analysis was used to determine factors causing a variation in WTP. The study was conducted in Southeast Nigeria. Inter-rater reliability coefficients were estimated for the individual's WTP for own nets, WTP for others and WTP for re-treatment. Using WTP for own nets as the best reliability estimate, the coefficients were high at values of 0.77 (C.I. 0.72-0.86), 0.75 (C.I. 0.64-0.81) and 0.74 (C.I. 0.63-0.82) in the BG, BWFU and SH, respectively. In test-retest reliability coefficients, the coefficients for WTP for own nets were low-to-moderate at values of 0.51 (C.I. 0.40-0.62), 0.41 (C.I. 0.28-0.53) and 0.56 (C.I. 0.41-0.65) for the BG, BWFU and SH groups, respectively. Factors such as gender, change in income, unplanned expenditures, stated WTP in first survey, time-to-think, external information, and subjecting respondents to more than one interview explained the lower test-retest reliability coefficients. We conclude that the CVM was reliable in the study area and the question formats had similar levels of reliability. The lower coefficients in the test-retest reliability were due to the influence of factors affecting demand that had changed in the intervening period. Standard formats for determining reliability within CVM should be developed for easy comparison of results from different studies.

An assessment of the burden of migraine using the willingness to pay model

Willingness to pay methods measure treatment preferences and also measure the burden of illness in economic terms. We used a contingent valuation method to measure migraine sufferers' willingness to pay (WTP) for acute medication for their most severe headache attacks, based on various profiles of treatment benefits and the characteristics of the migraine sufferer. Subjects were identified from a population-based database of migraine sufferers, previously recruited by random digit dialing. Telephone interviews (n = 1428) were used to gather demographic and headache characteristics. Subjects who met the International Headache Society criteria for migraine with or without aura and satisfied the other inclusion criteria based on telephone interview (n = 312) were invited to participate in a mailed questionnaire study. The questionnaire was mailed to the 310 subjects who agreed to participate and 201 (65%) surveys were returned. The survey included questions on the demographics, the migraine characteristics, and the psychological disposition of the respondents. WTP for an acute migraine treatment with 14 different hypothetical treatment profiles was explored. Responders and non-responders to the survey were generally similar. The newly designed WTP questionnaire had high internal consistency (Cronbach's alpha 0.90) and test-retest reliability (Spearman's correlation coefficients 0.71-0.77). Study subjects were willing to pay a median price of US 5 dollars for a migraine treatment that provided complete relief in 30 min and worked 100% of the time, with no side-effects and no headache recurrence. Median WTP decreased as treatment attributes deviated from this ideal. For example, WTP declined to a median of US 1 dollar for complete relief in 2 h and to US 0.25 dollars for complete relief in 4 h. All of the medication attributes powerfully influenced WTP. Several variables predicted WTP including current payment for medication, MIDAS (Grade III), and those with headaches of long duration. Subjects who employed a greater number of coping skills were less willing to pay. Patient demographics and migraine severity predict WTP, but treatment attributes were also important. As treatment improves, WTP for migraine medications is likely to increase.

Feasibility and construct validity of the parent willingness-to-pay technique for children with juvenile idiopathic arthritis

OBJECTIVE

To assess the feasibility and construct validity of the willingness-to-pay (WTP) technique for measuring health care preferences in families of children with juvenile idiopathic arthritis (JIA).

METHODS

Parents were asked to estimate the monthly US dollar amount they would be willing to pay to obtain for their child the following hypothetical drugs: ARTHRO, which guarantees complete clinical response; and NO-STOM-ACHE, a drug that eliminates gastrointestinal (GI) symptoms. A yes/no question was used with random assignment of the starting bids. Parents who agreed to pay the starting bid were then asked whether they would be willing to pay 200% and then 400% of this initial bid. Socioeconomic data and information on medications, disease activity, patient physical function, wellbeing, and health-related quality of life (HRQOL) were obtained.

RESULTS

Sixty-two families of children with JIA were interviewed. GI symptoms were present in 54%, and 53% of the children had joints with active arthritis or limited range of motion. Four parents (7%) were unwilling to pay anything for any of the studied medications. The mean amount (median; mean percentage of available family income) families were willing to pay was $395 ($300; 15%) for ARTHRO and $109 ($80; 4%) for NO-STOM-ACHE. Correlation and regression analysis supported that, adjusted for the available family income, the WTP for ARTHRO was associated with disease activity, pain, and the HRQOL of the patients. After correction for the starting bids and the available family income, the WTP for NO-STOM-ACHE was associated with the patient's HRQOL, pain, and the amount of GI discomfort.

CONCLUSION

The WTP technique is feasible and has construct validity for measuring health care preferences for children with JIA. Relatively large WTP estimates support a possible important negative impact of the disease on families of children with JIA.

Medical care expenditures and earnings losses of persons with arthritis and other rheumatic conditions in the United States in 1997: total and incremental estimates

OBJECTIVE

To provide estimates of the total medical care expenditures and earnings losses associated with arthritis and other rheumatic conditions (AORC), as well as the increment in such costs specifically attributable to these conditions, in the US in 1997.

METHODS

The estimates were derived from the 1997 Medical Expenditures Panel Survey (MEPS), a national probability sample of 14,147 households including 34,551 persons, of whom 4,776 self-reported arthritis. After weighting, those who self-reported AORC represent 38.4 million persons. We tabulated all medical care expenditures of the adult MEPS respondents, stratified by arthritis and comorbidity status, and then used regression techniques to estimate the increment in health care expenditures attributable to AORC, after taking comorbidity, demographic characteristics, and insurance status into account. Using the same methods, we also estimated the magnitude of the earnings losses sustained by persons of working ages (18-64 years) who had AORC.

RESULTS

Persons with AORC incurred mean total medical care expenditures of 4,865 dollars (total 186.9 billion dollars). The largest components of these expenditures were inpatient care (39%), ambulatory care (29%), and prescriptions (14%). The mean increment in medical care expenditures specifically attributable to AORC among those ages 18 years and older was 1,391 dollars(total approximately 51.1 billion dollars). Persons with AORC ages 18-64 years earned 3,812 dollars less on average than did other persons of these ages (total 82.4 billion dollars). Of this average, 1,579 dollars was attributable to the AORC (total 35.1 billion dollars).

CONCLUSION

In 1997, persons with AORC incurred direct and indirect costs of 269.3 billion dollars, of which 86.2 billion dollars was attributable to these conditions.

Cost-benefit analysis of first-generation antihistamines in the treatment of allergic rhinitis

BACKGROUND

The majority of individuals with allergic rhinitis in the US take first-generation antihistamines (FGAs). Although FGAs have been proven effective in alleviating allergic rhinitis symptoms, they have been associated with an increased risk of motor vehicle, aviation and occupational injuries and deaths, reduced productivity and impaired learning.

OBJECTIVE

The objective of this analysis was to quantify the total costs and benefits of FGA use in the US from the societal perspective.

METHODS

We used a decision-analytic model to quantify the annual societal costs and benefits of treatment with FGAs compared with the hypothetical alternative of no treatment for the population of individuals with allergic rhinitis and taking FGAs in the US in 2001. The benefit associated with FGA use was estimated using the willingness-to-pay framework and projected to the US population using published estimates of the prevalence of allergic rhinitis. The costs of FGA-associated sedation included lost productivity and the direct and indirect cost of unintentional injuries (including motor vehicle, occupational, public and home injuries and fatalities). The incidence of injuries and fatalities associated with FGA use was estimated using the risk of injury attributable to the sedentary effects of FGAs in the allergic rhinitis population. To evaluate uncertainty in the model assumptions, a probabilistic sensitivity analysis was conducted using Bayesian second-order Monte Carlo simulation. Costs and benefits are expressed in 2001 US dollars, using a 3% discount rate.

RESULTS

Based on current utilisation, the total societal benefit (95% credible interval) associated with the use of FGAs for the treatment of allergic rhinitis was US 7.7 billion dollars (US 1.3 billion dollars to US 21 billion dollars). The societal cost of purchasing FGAs was only US 697 million dollars. However, the societal cost of FGA-associated sedation was US 11.3 billion dollars (US 2.4 billion dollars to US 50.8 billion dollars). The annual societal net benefit of FGA use for the treatment of allergic rhinitis in the US was -US4.2 billion dollars (-US 36 billion dollars to +US 0.296 billion dollars). The net benefit was negative in 97% of the 10,000 Monte Carlo simulations.

CONCLUSIONS

The societal benefits of FGA use in alleviating the symptoms of allergic rhinitis are significant. However, based on the assumptions, probability distributions and parameter estimate ranges used in the current model, it is very likely that the costs associated with sedation exceed the benefits of FGA use in the US. The cost of FGA-associated sedation is comparable to estimates of the cost of all medical care expenditures on respiratory conditions in the US (US 12.1 billion dollars to US 31.3 billion dollars) [1996 values] and provides compelling evidence of the economic burden of sedation associated with FGA use.

The reliability of willingness to pay for changes in health status

One of the most common means to test for the temporal reliability of willingness-to-pay (WTP) values is the 'test-retest' method. However, few such tests have been conducted in healthcare, and the few that are focus on specific patient or professional groups, limiting their generalisability. In this article, a test-retest analysis of WTP for changes in health status from a general population sample found good reliability overall, with the level of reliability increasing with the overall amount of WTP and/or level of WTP as a proportion of income. The possible implications for the design and use of WTP studies in healthcare are outlined.

The Importance of Skin Disease as Assessed by “Willingness-To-Pay”

BACKGROUND

To achieve optimal resource allocation in health care, it is necessary to value competing resource uses according to the benefit derived from those uses. Skin disease makes as great an impact as other serious medical conditions when assessed by effects on health-related quality of life.

OBJECTIVE

To confirm the high impact of skin disease by comparing patients' willingness to pay (WTP) to be cured or relieved from symptoms of skin and nonskin conditions.

METHODS

We searched the published literature on WTP to compare the impact of dermatologic conditions with the impact of other medical conditions. A total of 46 articles were identified of which 10 included information on willingness to pay for cure reported on a monthly basis.

RESULTS

WTP for skin diseases fell in the range of 125-260 dollars/month and was comparable or higher than all but one of the other identified conditions.

CONCLUSION

Willingness to pay for relief from skin diseases is comparable to that for relief of other serious medical conditions. Skin diseases are associated with a significant adverse impact on patients' lives.

Construction of the contingent valuation market in health care: a critical assessment

Contingent valuation (CV) has been criticised for being too hypothetical, with expressed values bearing little relation to actual values. The magnitude of this divergence, however, depends upon how realistic and believable the contingent market is. This paper presents an overview of five key aspects in the construction of the contingent market: (i) scenario development and presentation; (ii) payment vehicle; (iii) expression of risk; (iv) time period of valuation; and (v) survey administration. CV studies in health care since 1985, totalling 111, are critically reviewed with respect to these five aspects. It is concluded that CV studies in health care have performed poorly in the construction, specification and presentation of the contingent market, and that there has been little, if any, improvement in this respect over the last 15 years. Suggestions are made concerning why this may be the case, and how the construction of the contingent market may be improved in future.

A comparison of the reliability of the take-it-or-leave-it and the bidding game approaches to estimating willingness-to-pay in a rural population in West Africa

The test-retest reliability of the bidding game and the take-it-or-leave-it (TIOLI) approaches to eliciting willingness-to-pay (WTP) are compared. A random sample of households in the Nouna area of Burkina Faso were interviewed twice with an interval of around 4-5 weeks. One thousand one hundred and eight individuals were asked their individual WTP for community-based health insurance. Three hundred and forty eight of these individuals were household heads who were in addition asked about their WTP for health insurance for the whole household. Median and the mean WTP were higher in the test than in the retest. Despite these differences both methods displayed moderate to good reliability (kappa values ranged from 0.467 to 0.621, Spearman correlations ranged from 0.653 to 0.701 and Pearson correlations ranged from 0.593 to 0.675). There was some evidence that the bidding game was more reliable than the TIOLI method. This study is based on larger sample size than previous studies and also is one of the first studies of the reliability of WTP in a developing country.

Pediatricians' Views on Financial Barriers and Values for Pneumococcal Vaccine for Children

OBJECTIVES

To 1) describe barriers to pneumococcal conjugate vaccine adoption and 2) estimate the value of the vaccine based on pediatricians' responses to willingness-to-pay questions.

METHODS

In June 2000, we mailed a random sample of pediatricians in Massachusetts a questionnaire about barriers to adoption of the vaccine and willingness to pay for the vaccine and associated outcomes. Respondents were assigned at random to 1 of 2 survey versions: the Personal Perspective version, for which they imagined spending their own money for their own child, or the Public Perspective version, for which they imagined spending the government's money for the average child.

RESULTS

Of the 546 pediatricians who responded (estimated completion rate, 80%), only 9% were using the vaccine routinely at the time of the survey. Most said that if the state did not provide the vaccine, financial barriers including inadequate insurance reimbursement would limit their use of the vaccine either a great deal (61%) or a moderate amount (25%). Pediatricians who were asked how much they would pay for the vaccine for their own child (personal perspective) gave a mean of $56 per dose, whereas those who were asked how much the government should pay on behalf of an average child (public perspective) gave a mean of $36 per dose. Alternatively, when we used a decision analysis model and incorporated pediatricians' values for preventing pneumococcal infections to estimate the vaccine's value, the value per dose was $38 from the personal perspective and $34 from the public perspective.

CONCLUSIONS

Pediatricians in Massachusetts identified significant financial barriers to the adoption of pneumococcal conjugate vaccine related to insurance arrangements. Based on willingness-to-pay questions, the value of the vaccine is lower than the current list price. The methods used to estimate the value of a vaccine, including the perspective used to frame questions, may substantially influence the results.

The distribution problem in economic evaluation: income and the valuation of costs and consequences of health care programmes

To date, a common view in the health economics literature is that the applicability of cost-benefit analysis (CBA) is limited, due to the distribution problem which underlies its main method of valuation (e.g. willingness to pay). One view is that cost effectiveness analysis (CEA) overcomes these problems. We show that the same distributional concerns apply to non-monetary valuations of health consequences, to measurement of costs and to the decision rules of CEA. Hence adopting CEA over CBA cannot be justified on the basis of "avoiding" distributional considerations. The implications of our results are discussed, including alternative strategies for the use of "income-based" research findings in social decision-making.

Economic value to parents of reducing the pain and emotional distress of childhood vaccine injections

BACKGROUND

One reason that recommended childhood immunizations due at child health visits are deferred is to avoid the pain and emotional distress associated with the increasing number of injections required. This deferral leads to additional visits and costs and reduced immunoprotection against vaccine-preventable illnesses. To assess the economic value of combination vaccines that address this problem, we surveyed parents to determine the amount they would be willing to pay to avoid the pain and emotional distress experienced by their infants from injections.

METHODS

A self-administered questionnaire was completed within 24 h of the vaccinations by 294 parents of children ages 11/2 to 7 months receiving vaccine injections at 26 outpatient child health centers. The willingness-to-pay (WTP) method was used to estimate the intangible cost of the pain and emotional distress of the 1 to 4 injections their child had received. Parents were asked how much of their own money they would have paid to avoid these injections, without any compromise in the safety and efficacy of the vaccinations.

RESULTS

Wide variations in WTP amounts were observed, ranging from median values of $10 to $25 and average values of $57.06 to $79.28 to avoid the pain and emotional distress associated with eliminating all injections at visits in which one to four injections were administered. Parents placed greater value on reductions that avoided all injections than on reductions that avoided only some injections. Overall the median cost per injection avoided was $8.14, and the mean was $30.28.

CONCLUSIONS

Parents have strong preferences for limiting vaccine injections. The economic cost of the pain and distress associated with such injections, reflected in the amounts they report they would be willing to pay to avoid them, represents a substantial component of the cost of disease control through immunization.

A national study of medical care expenditures for musculoskeletal conditions: the impact of health insurance and managed care

OBJECTIVE

To provide estimates of all medical care expenditures on behalf of persons with musculoskeletal conditions in the United States in 1996, to estimate the increment in expenditures attributable to the musculoskeletal conditions among such persons, and to ascertain the impact of the presence or absence of health insurance and/or managed care on such expenditures.

METHODS

The estimates were derived from the Medical Expenditure Panel Survey (MEPS), a national probability sample of 9,488 households, which includes responses from 21,571 persons. In the MEPS, respondents are surveyed every 6 months to report on medical care utilization and health care expenditures. Of the 21,571 persons surveyed, 4,161 reported having 1 or more musculoskeletal conditions. After weighting the data, these 4,161 individuals were inferred to represent 53.935 million persons in the nation as a whole. We tabulated all medical care expenditures of these individuals, stratified by comorbidity status, and then compared their expenditures with those among persons with chronic conditions other than musculoskeletal disease or with no chronic conditions. We then used regression techniques to estimate the increment of health care expenditures attributable to the musculoskeletal conditions. Finally, we used regression to estimate the impact of health insurance status and managed care status on the health care expenditures of the persons with musculoskeletal conditions.

RESULTS

Per capita medical care expenditures in 1996 averaged $3,578 among persons with musculoskeletal conditions, for a national total of $193 billion, the equivalent of 2.5% of the Gross Domestic Product in that year. The largest components were hospital admissions (37%), physician visits (23%), and prescriptions (16%). Estimates of the per capita increment in total medical care expenditures attributable to musculoskeletal conditions ranged from a high of $723 when controlling for the other medical conditions present, to $364 when controlling for these variables and demographics. Persons with musculoskeletal conditions ages 16-64 who lacked health insurance reported total expenditures of $793, versus $3,249 among those with insurance (P < 0.0001). Among such persons with insurance, expenditures did not differ significantly between those in fee-for-service plans and those in managed care health plans.

CONCLUSION

Persons with musculoskeletal conditions and health insurance experienced high total expenditures for medical care and high expenditures attributable to the musculoskeletal conditions. Insurance coverage under a managed care plan had no effect on the magnitude of these total expenditures, but lack of insurance coverage did have a significant effect among persons with musculoskeletal conditions.

The hidden costs of infant vaccination

Combination vaccines to minimize injections required for infant vaccination, and new vaccines with improved safety profiles, will pose increasingly complex choices for vaccine purchasers in the future. How much of a premium to pay for such vaccines might be determined by taking into account (1) the psychological burden of multiple injections during a single clinic visit, and the costs of any additional visits to minimize these, and (2) the medical, work-loss, and incidental costs of common vaccine-associated symptoms. This cross-sectional survey included randomly-selected parents of 1-8-month-old infants who received vaccines in a Northern California health maintenance organization (HMO) in 1997. Interviewers called parents 14 days after the infant's vaccination to administer a 10-minute closed-ended interview in English or Spanish. Parents were asked about infant symptoms after vaccination, their preferences regarding multiple injections and their (theoretical) willingness to pay to reduce the number of injections their infant would receive, or to avoid the adverse symptoms experienced. Among 1769 eligible infants, interviews were completed with parents of 1657 (93%). The psychological cost of multiple injections was estimated by the willingness of parents to pay a median of $25 to reduce injections from 4 to 3, $25 from 3 to 2, and $50 from 2 to 1. Vaccine-associated symptoms caused mean costs of $42 in medical utilization and $192 in work-loss among the families who experienced those events (Ns=62 and 35, respectively). When averaged among all 1657 study infants, vaccine-associated symptoms after the index vaccination visit resulted in $2.91 in medical utilization, $4.05 in work-loss, and $0.74 in direct nonmedical costs, yielding total financial costs of $7.70. Parents of infants who had vaccine-associated symptoms said they would have paid a median of $50 to avoid these symptoms. Fever and fussiness were associated in logistic regression analysis with a two-fold increase in the odds of medical utilization, and fever with more than a three-fold increase in work loss. We conclude that multiple injections during a single clinic visit entail psychological costs. The psychological costs of vaccine-associated symptoms, as measured by willingness-to-pay methods, are higher than those resulting from multiple injections. The financial costs of medical utilization and work-loss resulting from common vaccine-associated symptoms are non-negligible and should be incorporated in economic analyses.

Willingness to pay in arthritis: a Danish contribution

OBJECTIVE

To explore the use of willingness-to-pay (WTP) methods with respect to an antagonist of tumour necrosis factor as an antirheumatic drug.

METHODS

One hundred and fifteen rheumatoid arthritis (RA) patients at a tertiary care centre in Odense, Denmark were interviewed using two WTP approaches, the contingent ranking and double-bounded (closed-ended) methods.

RESULTS

The average closed-ended WTP value was DKr581 and the average contingent ranking WTP was DKr643. There were no statistically significant differences in the WTP estimates between the two methods.

CONCLUSION

It is feasible to use these methods with arthritis patients. If, as suggested in a number of recent reviews, a major effort is to be put into undertaking economic appraisals of arthritis programmes, then this should include more cost-benefit studies using WTP approaches of the kind illustrated in this paper.

A cost-benefit analysis using a willingness-to-pay questionnaire of intranasal budesonide for seasonal allergic rhinitis. Rhinocort Study Group

BACKGROUND

The cost-benefit of intranasal steroids for the treatment of seasonal allergic rhinitis is unknown.

OBJECTIVE

To determine the cost-benefit of intranasal budesonide for seasonal allergic rhinitis.

METHODS

Subjects who were symptomatic for a baseline period of 7 to 10 days were randomized to receive intranasal budesonide by Turbuhaler (400 microg) (n = 121) or aqueous spray (256 microg) (n = 121) once daily for 4 weeks. A willingness-to-pay questionnaire that measured benefits of treatment was administered before and at study completion. Costs were collected and compared with benefits.

RESULTS

Subjects were willing to spend on average $15.89/wk (range $1 to $75) to alleviate the problems of seasonal ragweed rhinitis. Eighty percent of subjects felt that, with treatment, rhinitis had less of an impact on their lives, compared with previous years. The mean willingness-to-pay for the drug used during another ragweed season was $12.95/wk. This was 92% (95% CI, 85% to 100%) of the pre-treatment estimate. There was no relationship between an indirect assessment of income and willingness-to-pay estimates. The benefit was greater than the cost by a mean of $5.80/wk (95% CI, $3.52 to 8.08), P < .0001. There was no difference in costs, willingness-to-pay, or cost-benefit comparing delivery modes. A sensitivity analysis revealed the conclusions were robust.

CONCLUSIONS

Intranasal budesonide is cost-beneficial in the treatment of seasonal allergic rhinitis and a willingness-to-pay questionnaire may provide a useful method to assess a therapy's benefit.

Use of contingent valuation to place a monetary value on pharmacy services: an overview and review of the literature

An important goal for the pharmacy profession is to quantify the economic value of pharmacy services. The contingent valuation (CV), or willingness-to-pay method, offers one approach to valuing the benefits of pharmacy services. The potential advantage CV offers is that it reflects, in a single monetary amount, the entire range of attributes (both benefits and "nonbenefits") offered by the good or service being valued. This paper provides a brief overview of the CV method and reviews 10 published studies that used a willingness-to-pay question to place a monetary value on pharmacy services. Suggestions for other researchers wishing to use this method are provided.

An assessment of the annual and long-term direct costs of rheumatoid arthritis: the impact of poor function and functional decline

OBJECTIVE

To describe the distribution of direct medical care costs of rheumatoid arthritis (RA) over 1-year and 11-year periods, and to evaluate the impact of poor function and functional decline on direct costs.

METHODS

The present study uses data from the University of California, San Francisco, RA Panel Study in which 1,156 persons with RA have been followed up for as long as 15 years through annual structured interviews and periodic updates on severity from rheumatologists. We present annual direct medical care cost data for the years 1995 and 1996 and estimates of cumulative costs for the period 1986-1996 for the 272 persons followed up continuously for this period.

RESULTS

Medical care costs for RA averaged $5,919 a year from a societal perspective; persons with RA incur another $2,582 in medical care costs for non-RA reasons. Of the RA total costs, hospital admissions account for more than half. Costs are highly skewed, with the costs in the 90th, 95th, and 100th percentiles totaling $8,209, $31,059, and $85,469 a year, respectively. Cumulative costs for the period 1986-1996 averaged $57,201, with cumulative costs in the 90th, 95th, and 100th percentiles totaling $114,844, $142,563, and $191,540, respectively. Persons with RA in the worst quartile of function experienced total annual direct costs that were 2.55 times as high and total hospital costs that were 6.97 times as high as those in the best (e.g., the first) quartile. Poor baseline functional status and declining functional status had similar, large effects on cumulative medical care costs.

CONCLUSION

Medical care costs for RA over 1 year and 1 decade are highly skewed. Persons with RA with poor and declining function experience much higher costs of care.

The contingent valuation method in health care

The contingent valuation method (CVM) is a survey-based, hypothetical and direct method to determine monetary valuations of effects of health technologies. This comprehensive review of CVM in the health care literature points at methodological as well as conceptual issues of CVM and on willingness to pay as a measure of benefits compared with other measures used in medical technology assessment. Studies published before 1998 were found by searching computerised databases and former review literature. Studies were included, when performing CVM using original data and meeting qualitative criteria. Theoretical validity of CVM was sufficiently shown and there were several indications of convergent validity. No results on criterion validity and only a few on reliability were found. There was widespread use of different elicitation formats, which make comparisons of studies problematic. Direct questions were seen problematic. First bids used in bidding games influenced the monetary valuation significantly (starting point bias). There were indications that the range of bids of payment cards also affected the valuation (range bias). However, no strategic bias was found. The influence of different states of valuation (ex-ante, ex-post) and of payment methods, as well as the possible aggregation of the results of decomposed scenarios rather than more complex holistic scenarios, were rarely investigated. Further methodological analysis and testing seems to be necessary before CVM may be used in health care decision making. Important research topics are the connection of assessment of different elicitation methods and criterion validity as well as tests on reliability according to methodological issues. Concerning conceptual issues, the analysis of the influence of different states of evaluation and of the status of the respondents as diseased or non-diseased, as well as the aggregation of results of decomposed scenarios, proved to be topics of further research.

Measuring patient preferences by willingness to pay to avoid: the case of acute otitis media

The aim of this study was to evaluate willingness to pay (WTP) to avoid as a method of eliciting relative values for use in expected-value (EV) decision making. Parents' preferences for the events and outcomes associated with acute otitis media (AOM) and its treatment were quantified by means of a questionnaire asking how much they would be willing to pay to avoid them. Their responses were then used to calculate the EVs of treating or not treating presumed AOM with antibiotics. The advantages of the WTP method were its simplicity, its analogy with everyday financial transactions, its explicit recognition of illness and its management as involving decreases in value, and its face validity. The disadvantages included the need to use another method (the standard gamble) to derive a value for death and the wide ranges and the poor test-retest reliability of individual parents' responses. Nonetheless, median WTP values and their ranges may prove useful in defining for physicians and policymakers the parameters of their practical management decisions. In the case of AOM, the EV of treating with antibiotics was, for the aggregate sample and for most individual parents, robustly superior because of parents' desire to avoid any increased risk of their children's death.

Assessing the value of a new pharmaceutical. A feasibility study of contingent valuation in managed care

OBJECTIVES

The authors assessed the feasibility and construct validity of the contingent valuation method for measuring the monetary value to healthy enrollees in a health maintenance organization of a new drug, filgrastim, as prophylaxis against febrile neutropenia after chemotherapy treatment for cancer.

METHODS

A random sample of 220 enrollees from a closed-panel staff-model health maintenance organization who did not have cancer were interviewed. Chemotherapy, febrile neutropenia and filgrastim were described by video and decision board. Questions were asked in two different scenarios: (1) User-based: Assuming they were at the point of consumption and about to receive chemotherapy, what is the maximum they would be willing to pay to receive filgrastim? and (2) Insurance-based: Given they were at risk of cancer in the future, what is the maximum they would be willing to pay in additional monthly insurance premiums to add filgrastim to the plan? In a second insurance scenario where respondents were told that filgrastim was covered, what is the minimum reduction in premium that persons were willing to accept to relinquish coverage of the drug? A 2 x 2 factorial design was used to contrast two bidding algorithms to test for starting point bias and two 5-yearly prior risks of cancer, 1/200 versus 1/100. Main effects were tested by ANCOVA controlling for age, sex, health, and income.

RESULTS

Demographics of experimental cells were similar. No evidence was found of significant starting point bias. For user-based questions, as expected, willingness-to-pay increases with febrile neutropenia risk reduction, but at a declining marginal rate. Despite careful presentation of information to respondents, willingness-to-pay for insurance was higher in the lower prior risk group. Consistent with previous contingent valuation studies, the authors of the present study found evidence that willingness-to-accept exceeds willingness-to-pay for coverage of the same benefit.

CONCLUSIONS

An insurance-based contingent valuation study is feasible in a health maintenance organization. Construct validation evidence was encouraging, with the exception of the test for prior risk of cancer; however, this was a between-person contrast and may have been confounded by other factors.

The comparability and reliability of five health-state valuation methods

The objective of the study was to consider five methods for valuing health states with respect to their comparability (convergent validity, value functions) and reliability. Valuation tasks were performed by 104 student volunteers using five frequently used valuation methods: standard gamble (SG), time trade-off (TTO), rating scale (RS), willingness-to-pay (WTP) and the paired comparisons method (PC). Throughout the study, the EuroQol classification system was used to construct 13 health-state descriptions. Validity was investigated using the multitrait-multimethod (MTMM) methodology. The extent to which results of one method could be predicted by another was examined by transformations. Reliability of the methods was studied parametrically with Generalisability Theory (an ANOVA extension), as well as non-parametrically. Mean values for SG were slightly higher than TTO values. The RS could be distinguished from the other methods. After a simple power transformation, the RS values were found to be close to SG and TTO. Mean values of WTP were linearly related to SG and TTO, except at the extremes of the scale. However, the reliability of WTP was low and the number of inconsistencies substantial. Valuations made by the RS proved to be the most reliable. Paired comparisons did not provide stable results. In conclusion, the results of the parametric transformation function between RS and SG/TTO provide evidence to justify the current use of RS (with transformations) not only for reasons of feasibility and reliability but also for reasons of comparability. A definite judgement on PC requires data of a complete design. Due to the specific structure of the correlation matrix which is inherent in valuing health states, we believe that full MTMM is not applicable for the standard analysis of health-state valuations.

Valuing morbidity: an integration of the willingness-to-pay and health-status index literatures

Placing dollar values on human health has long been a controversial aspect of policy analysis and remains difficult given the relatively small number of morbidity-valuation studies available. By combining both the economic and health literature, this paper offers an alternative approach to morbidity valuation and provides estimates for a wide range of short-term health conditions.

Patients' willingness to pay for autologous blood donation

Most cost-effectiveness analyses of autologous blood donation show very small health benefits for a substantial increase in resource utilization. However, these analyses do not consider the psychological benefits of peace of mind to patients participating in the program. In order to quantitate these benefits, we employed contingent valuation methodology to measure the willingness of patients undergoing elective surgery, to pay for autologous blood donation. The internal consistency of patient responses was investigated through correlations of willingness-to-pay values with risk perceptions and patient characteristics. Two hundred and thirty-five patients completed the self-administered questionnaire which included demographic, willingness-to-pay and risk perception questions. Median population willingness to pay for autologous blood donation was approximately $900 per patient. In multivariate analysis, willingness to pay varied significantly with dread of allogenic transfusion, perceived risk of requiring a blood transfusion and income. Patients who participate in autologous blood donation programs value the procedure highly and state they are willing to pay significant amounts out of pocket to assure themselves of available autologous blood. Willingness to pay correlated significantly with factors expected to influence value decisions.

Measuring heart patients' willingness to pay for changes in angina symptoms

Willingness-to-pay (WTP) measures of the effects of changes in health on a person's welfare are more comprehensive than traditional cost-of-illness (COI) measures, but they are sometimes difficult to obtain. The authors investigated two approaches for measuring heart patients' WTP for changes in their angina symptoms. First, actual expenditures and perceived angina episodes avoided were used to infer an averting-behavior measurement of WTP. Second, a contingent-valuation approach was used to ask direct WTP questions regarding a hypothetical medical treatment that could be purchased to avoid additional angina episodes. The results indicated that although negligible COI changes were expected with small changes in angina frequency, the subjects had significant WTP to avoid increases in angina. The average WTP to avoid additional angina episodes revealed by the averting-behavior questions was comparable to the directly-elicited WTP, providing a test of the validity of the contingent-valuation approach.

Willingness to pay: a valid and reliable measure of health state preference?

The development of methods to measure willingness to pay (WTP) has renewed interest in cost-benefit analysis (CBA) for the economic evaluation of health care programs. The authors studied the construct validity and test-retest reliability of WTP as a measure of health state preferences in a survey of 102 persons (mean age 62 years; 54% male) who had chronic lung disease (forced expiratory volume < 70%). Interview measurements included self-reported symptoms, the oxygen-cost diagram for dyspnea, Short-Form 36 for general health status, rating scale and standard gamble for value and utility of current health state relative to death and healthy lung functioning, and WTP for a hypothetical intervention offering a 99% chance of healthy lung functioning and a 1% chance of death. WTP was elicited by a simple bidding game. To test for starting-point bias, the respondents were randomly assigned to one of five starting bids. All health status and preference measurements except WTP (controlling for income) showed significant (p < 0.05) difference between disease-severity groups (mild/moderate/severe). WTP was significantly (p = 0.01) associated with household income, but other health status and preference measure were not. The measure most highly correlated with WTP was standard gamble (r = -0.46). There was no association between starting bid and mean WTP adjusted for income and health status. The test-retest reliability of WTP was acceptable (r = 0.66) but lower than that for the standard gamble (r = 0.82).(ABSTRACT TRUNCATED AT 250 WORDS)

Economic evaluation of lipid lowering--a feasibility test of the contingent valuation approach

A large number of cost-effectiveness analyses of treatment of high cholesterol levels have been published the last few years. Due to the inherent problems of cost-effectiveness analysis of prevention and the specific problems in the case of lipid lowering, it is important to test alternative approaches. This study reports the results of a pilot study of three benefit measures based on individual preferences. Willingness to pay (WTP), willingness to give up leisure time (WTGT) and maximum acceptable risk (MAR) for lowering cholesterol levels to normal were investigated among persons with hypercholesterolaemia in a postal survey. The respondents were on average prepared to pay about SEK 450 per month, to give up about 7 hours of leisure time per week or to take an immediate mortality risk of about 1.4% to get normal lipid levels. The WTP and WTGT questions seemed to be about equally acceptable, whereas the MAR question performed less well with respect to acceptability. It is concluded that especially WTP deserves further attention, due to its inherent advantages, since it performed at least as well as the other measures.

Labor force participation among persons with musculoskeletal conditions, 1970-1987. National estimates derived from a series of cross-sections

In the present study, we estimated the labor force participation rate among persons with musculoskeletal conditions in 1987, compared this rate with that experienced by persons with other chronic conditions or with none, and estimated the change in labor force participation rates among persons with musculoskeletal conditions for the period 1970-1987. Rates were estimated from 18 years of National Health Interview Survey data, and the sampling weights from this survey were used to obtain population estimates. To ensure statistically stable estimates, we averaged the rates over 6 years of data. In 1987, 42.9% of all working-age persons with musculoskeletal conditions were out of the labor force, this study's definition of work disability. Overall labor force participation rates among persons with musculoskeletal conditions declined from 71% to 56% between 1976-1981 and 1982-1987, 22% in relative terms. Much of this decline was concentrated among men, especially men 55-64 years of age. However, women 55-64 years of age with musculoskeletal conditions also experienced declining labor force participation rates. Labor force participation patterns among persons with musculoskeletal conditions fit more general labor market trends, with gains among younger women more than offset by declines among older men and women. However, these trends appear to be more accentuated among persons with musculoskeletal conditions, suggesting that enforcement of the employment provisions of the Americans with Disabilities Act of 1990 place special emphasis on labor force participation among such persons.

Economic evaluation in health care: is there a role for cost-benefit analysis?

This paper is devoted to the contingent valuation (CV) method and its possible area of application in health economics. With the CV method willingness to pay or willingness to accept is measured with survey methods. The CV method has been developed in environmental economics and is now the most commonly used method of measuring environmental benefits. The method has, however, seldom been used in economic evaluations of health care. The development of economic evaluation in the health care area is reviewed, and the existing methods (the human capital approach, cost-effectiveness analysis and cost-utility analysis) are compared with cost-benefit analysis using the CV method. It is shown that existing methods have several weak points, this makes the CV method an appealing alternative and/or complement to existing methods. From the empirical applications of the CV method in economic evaluations of health care it is evident that it is possible to achieve acceptable response rates. The methodological problems encountered when measuring willingness to pay with survey methods are shown to be similar to the problems encountered when measuring utility and quality of life in cost-utility analysis. Further studies with the CV method are necessary to further explore questions concerning the reliability and validity of the method.

Willingness to pay for publicly-provided goods. A possible measure of benefit?

The results presented in this paper arise from a U.K.-based study aimed at determining peoples' willingness to pay for two publicly-provided goods, namely continuing-care for elderly people in either hospital or National Health Service (NHS) nursing homes. Seventy-one per cent of respondents provided evaluations which could contribute to the analysis which showed that the group which preferred NHS nursing-home care could potentially compensate the group which preferred hospital care and still remain better off, thus rendering NHS nursing-home care the efficient option to undertake. No variable could be found which discriminated between those who could place a value on both types of care and those who could not. The willingness-to-pay methodology is very experimental in this context and should be investigated thoroughly before its widespread adoption in the evaluation of health care techniques.