A utility-theoretic model for QALYs and willingness to pay

Willingness to pay for a quality-adjusted life year: a systematic review with meta-regression

The use of a threshold for cost-utility studies is of major importance to health authorities for making the best allocation decisions for limited resources. Regarding the increasing number of studies worldwide that seek to establish a value for a quality-adjusted life year (QALY), it is necessary to review these studies to provide a global insight into the literature. A systematic review on willingness to pay (WTP) studies focusing on QALY was conducted in eight databases up to June 26, 2020. From a total of 9991 entries, 39 studies were selected, and 511 observations were extracted for the meta-analysis using the ordinary least squares method. The results showed a predicted mean empirical value of $52,619.39 (95% CI 49,952.59; 55,286.19) per QALY in US dollars for 2018. A 1% increase in income led to an increase of 0.6% in the WTP value, while a 1-year increase in respondent age led to a decrease of 3.3% in the WTP value. Sex, education level and employment status had significant effects on WTP. Compared to face-to-face interviews, surveys conducted by the internet or telephone were more likely to have a significantly higher value of WTP per QALY, while out-of-pocket payment tended to lower the value. The prediction made for the province of Quebec, Canada, provided a QALY value of approximately USD $98,450 (CAD $127,985), which is about 2.3 times its gross domestic product (GDP) per capita in 2018. This study is consistent with the extant literature and will be useful for countries that do not yet have a preference-based survey for the value of a QALY.

The criterion validity of willingness to pay methods: A systematic review and meta-analysis of the evidence

BACKGROUND

The contingent valuation (CV) method is used to estimate the willingness to pay (WTP) for services and products to inform cost benefit analyses (CBA). A long-standing criticism that stated WTP estimates may be poor indicators of actual WTP, calls into question their validity and the use of such estimates for welfare evaluation, especially in the health sector. Available evidence on the validity of CV studies so far is inconclusive. We systematically reviewed the literature to (1) synthesize the evidence on the criterion validity of WTP/willingness to accept (WTA), (2) undertake a meta-analysis, pooling evidence on the extent of variation between stated and actual WTP values and, (3) explore the reasons for the variation.

METHODS

Eight electronic databases were searched, along with citations and reference reviews. 50 papers detailing 159 comparisons were identified and reviewed using a standard proforma. Two reviewers each were involved in the paper selection, review and data extraction. Meta-analysis was conducted using random effects models for ratios of means and percentage differences separately. Meta-bias was investigated using funnel plots.

RESULTS

Hypothetical WTP was on average 3.2 times greater than actual WTP, with a range of 0.7-11.8 and 5.7 (0.0-13.6) for ratios of means and percentage differences respectively. However, key methodological differences between surveys of hypothetical and actual values were found. In the meta-analysis, high levels of heterogeneity existed. The overall effect size for mean summaries was 1.79 (1.56-2.04) and 2.37 (1.93-2.80) for percent summaries. Regression analyses identified mixed results on the influence of the different experimental protocols on the variation between stated and actual WTP values. Results indicating publication bias did not account for differences in study design.

CONCLUSIONS

The evidence on the criterion validity for CV studies is more mixed than authors are representing because substantial differences in study design between hypothetical and actual WTP/WTA surveys are not accounted for.

Comparing the Noncomparable: The Need for Equivalence Measures That Make Sense in Health-Economic Evaluations

BACKGROUND

The popularity of quality-adjusted life years (QALYs) has been resistant to concerns about validity and reliability. Utility-theoretic outcome equivalents are widely used in other areas of applied economics. Equivalence values can be derived for time, money, risk, and other metrics. These equivalence measures preserve all available information about individual preferences and are valid measures of individual welfare changes.

OBJECTIVE

The objective of this study was to derive alternative generalized equivalence measures from first principles and illustrate their application in an empirical comparative-effectiveness example.

METHODS

We specify a general-equilibrium model incorporating neoclassical utility functions, health production function, severity-duration preferences, and labor-market tradeoff function. The empirical implementation takes advantage of discrete-choice experiment methods that are widely accepted in other areas of applied economics and increasingly in health economics. We illustrate the practical significance of restrictive QALY assumptions using comparative-effectiveness results based on both QALYs and estimates of welfare-theoretic time-equivalent values for anti-tumor necrosis factor and prolonged corticosteroid treatments for Crohn's disease in three distinct preference classes.

RESULTS

The QALY difference between the two treatments is 0.2 months, while time-equivalent values range between 0.5 and 1.3 months for aggregate and class-specific differences. Thus, the QALY-based analysis understates welfare-theoretic values by 60%-85%.

CONCLUSION

These results suggest that using disease-specific equivalence values offer a meaningful alternative to QALYs to compare global outcomes across treatments. The equivalence values approach is consistent with principles of welfare economics and offers several features not represented in QALYs, including accounting for preference nonlinearities in disease severity and duration, inclusion of preference-relevant nonclinical healthcare factors, representing preferences of clinically-relevant patient subpopulations, and including utility losses related to risk aversion.

Cost-Effectiveness for Surgical Treatment of Degenerative Spondylolisthesis

Surgery for degenerative lumbar spondylolisthesis is significantly more cost-effective than nonsurgical management in patients who have failed to improve with a 6-week trial of nonsurgical management. Decompression plus fusion becomes more cost-effective compared with decompression alone at 2 years following surgery. Further study is needed to evaluate the most cost-effective fusion approach and augmentation strategy.

Managing incidental pancreatic cystic neoplasms with integrated molecular pathology is a cost-effective strategy

BACKGROUND AND STUDY AIMS

Current guidelines recommend using endoscopic ultrasound (EUS), carcinoembryonic antigen (CEA) testing and cytology to manage incidental pancreatic cystic neoplasms (PCN); however, studies suggest a strategy including integrated molecular pathology (IMP) of cyst fluid may further aid in predicting risk of malignancy. Here, we evaluate several strategies for diagnosing and managing asymptomatic PCN using healthcare economic modeling.

PATIENTS AND METHODS

A third-party-payer perspective Markov decision model examined four management strategies in a hypothetical cohort of 1000 asymptomatic patients incidentally found to have a 3 cm solitary pancreatic cystic lesion. Strategy I used cross-sectional imaging, recommended surgery only if symptoms or risk factors emerged. Strategy II considered patients for resection without initial EUS. Strategy III (EUS + CEA + Cytology) referred only those with mucinous cysts (CEA > 192 ng/mL) for resection. Strategy IV implemented IMP; a commercially available panel provided a "Benign," "Mucinous," or "Aggressive" classification based on the level of mutational change in cyst fluid. "Benign" and "Mucinous" patients were followed with surveillance; "Aggressive" patients were referred for resection. Quality-adjusted life-years (QALY), relative risk with 95 %CI, Number Needed to Treat (NNT), and incremental cost-effectiveness ratios were calculated.

RESULTS

Strategy IV provided the greatest increase in QALY at nearly identical cost to the cheapest approach, Strategy I. Relative risk of malignancy compared to the current standard of care and nearest competing strategy, Strategy III, was 0.18 (95 %CI 0.06 - 0.53) with an NNT of 56 (95 %CI 34 - 120).

CONCLUSIONS

Use of IMP was the most cost-effective strategy, supporting its routine clinical use.

What is the value given by consumers to nutritional label information? Results from a large investigation in Europe

RATIONALE

Nutrition labels on prepackaged foods have been widely advocated as a medium to foster healthier eating habits in the general population.

OBJECTIVE

The study is aimed at understanding how people value nutritional information on food labels, in particular for front-of-pack labeling.

METHODS

A phone-assisted survey of 7550 consumers in 16 European countries was conducted. People were asked about their opinion on nutritional information provided at different levels, from the media to public institutions, and their commitment to healthy behavior. The value of pack labeling was estimated using a willingness-to-pay (WTP) elicitation technique.

RESULTS

Older age groups (>45 years old), members of a larger family, people of low income or low education, and those who perceived themselves to be obese valued front-of-pack nutritional labeling. WTP estimates across all countries provided an average accepted added price of $4.32 to the overall yearly food expenditure (95% confidence interval, 3.33-3.68).

CONCLUSIONS

Overall, perceived value of labeling is low. However, factors affecting the value for consumer of nutritional labeling appear to be strictly linked to the socioeconomic and health status of the respondents.

Can hospitals compete on quality? Hospital competition

In this paper, we consider two hospitals with different perceived quality of care competing to capture a fraction of the total market demand. Patients select the hospital that provides the highest utility, which is a function of price and the patient's perceived quality of life during their life expectancy. We consider a market with a single class of patients and show that depending on the market demand and perceived quality of care of the hospitals, patients may enjoy a positive utility. Moreover, hospitals share the market demand based on their perceived quality of care and capacity. We also show that in a monopoly market (a market with a single hospital) the optimal demand captured by the hospital is independent of the perceived quality of care. We investigate the effects of different parameters including the market demand, hospitals' capacities, and perceived quality of care on the fraction of the demand that each hospital captures using some numerical examples.

HIS modelling and simulation based cost–benefit analysis of a telemedical system for closed-loop diabetes therapy

OBJECTIVES

INCA (Intelligent Control Assistant for Diabetes) is an EU funded project aimed at improving diabetes therapy by creating a personal closed-loop system interacting with telemedical remote control. This study aims at identifying and applying suitable methods for a cost-benefit analysis from the perspective of the payor for health services.

METHODS

For cost analysis MOSAIK-M was used, a method and tool for health information systems analysis and design. Two MOSAIK-M models were created describing conventional insulin pump based diabetes care (CSII), and INCA based diabetes care. Both models were parameterized with costs and simulated to determine yearly costs of diabetes management and treatment for a patient with no diabetes related complications. Probability of developing complications and their duration were determined based on the Archimedes model. It was parameterized with results of a clinical study concerning HbA1c-value changes using the INCA system compared with conventional CSII. The simulation results in form of years of disease within a 30-year time frame were multiplied with corresponding treatment costs.

RESULTS

Yearly costs of conventional insulin CSII for a diabetes type 1 patient are euro 5908 (German health care system). Using INCA based on the clinical study setting would raise yearly costs by euro 2233. 24% of the INCA costs are generated by the continuous blood glucose measurement device, 5% by IT devices and services. Considering also diabetes related complications in a 30-year time frame and HbA1c value reductions from 7.9 and 7.6% (conventional CSII) to 7.5 and 7.3% (INCA) reduces the additional costs of INCA to euro 2102 and euro 2162.

CONCLUSIONS

The approach produces an estimation of a lower bound for cost savings concerning the treatment of diabetes related complications in a 30-year time frame. These savings alone do not prove cost efficiency of the INCA approach. Further work is needed to improve the approximation and to include indirect and intangible costs.

Valuing avoided morbidity using meta-regression analysis: what can health status measures and QALYs tell us about WTP?

Many economists argue that willingness-to-pay (WTP) measures are most appropriate for assessing the welfare effects of health changes. Nevertheless, the health evaluation literature is still dominated by studies estimating nonmonetary health status measures (HSMs), which are often used to assess changes in quality-adjusted life years (QALYs). Using meta-regression analysis, this paper combines results from both WTP and HSM studies applied to acute morbidity, and it tests whether a systematic relationship exists between HSM and WTP estimates. We analyze over 230 WTP estimates from 17 different studies and find evidence that QALY-based estimates of illness severity--as measured by the Quality of Well-Being (QWB) Scale--are significant factors in explaining variation in WTP, as are changes in the duration of illness and the average income and age of the study populations. In addition, we test and reject the assumption of a constant WTP per QALY gain. We also demonstrate how the estimated meta-regression equations can serve as benefit transfer functions for policy analysis. By specifying the change in duration and severity of the acute illness and the characteristics of the affected population, we apply the regression functions to predict average WTP per case avoided.

Towards a better QALY model

This paper presents a test of the predictive validity of various classes of QALY models (i.e. linear, power and exponential models). We first estimated TTO utilities for 43 EQ-5D chronic health states and next these states were embedded in nonchronic health profiles. The chronic TTO utilities were then used to predict the responses to TTO questions with nonchronic health profiles. We find that the power QALY model clearly outperforms linear and exponential QALY models. Optimal power coefficient is 0.65. Our results suggest that TTO-based QALY calculations may be biased. This bias can be corrected using a power QALY model.

The relationship of medical, demographic and psychosocial factors to direct and indirect health utility instruments in rheumatoid arthritis

OBJECTIVES

Cost-effectiveness analysis (CEA) is essential for the comparison of treatments for rheumatoid arthritis (RA). CEA centres on accurate measurement of health utility (HU) preferences. Direct measures of HU in RA patients demonstrate weaker correlations with health status (functional disability and pain) than indirect measures. We examined whether demographic and psychosocial factors relate to HU in RA patients.

METHODS

HU was measured for 142 RA patients (76% women; mean age 58.75 yr) directly through standard gamble (SG) and time trade-off (TTO), and indirectly on the EuroQol (EQ-5D). Current pain (100 mm visual analogue scale) and recent functional disability (Health Assessment Questionnaire; HAQ) were assessed. A subsample of 48 provided demographic and psychosocial information (education, employment, marital/family status, knowledge about RA, medication beliefs, desirable responding, social support, optimism, and the Hospital Anxiety and Depression Scale; HADS).

RESULTS

Direct HU had higher means (SG = 0.88, TTO = 0.86) than indirect HU (EQ-5D = 0.52). HAQ functional disability correlated with SG (r = - 0.28), TTO (r = - 0.31) and EQ-5D (r = - 0.67). Current pain correlated with TTO (r = - 0.19) and EQ-5D (r = - 0.36). HADS depression correlated with TTO (r = - 0.35) and EQ-5D (r = - 0.64); HADS anxiety also correlated with EQ-5D (r = - 0.46).

CONCLUSIONS

Demographic and psychosocial factors cannot completely explain either the significant differences between direct and indirect HUs in RA patients or the moderate correlations of direct HUs with health status. Characteristics of the SG and TTO may make them inappropriate for HU assessment and CEA among RA patients.

Quality-adjusted life years was a poor predictor of women's willingness to pay in acute and chronic conditions: results of a survey

OBJECTIVE

We investigated the relationship between quality-adjusted life years (QALYs) and willingness to pay (WTP) in acute and chronic conditions.

STUDY DESIGN AND SETTING

Face-to-face interviews were used to collect data in a convenience sample of women. Participants completed one interview evaluating preferences for an acute condition, post-chemotherapy nausea and vomiting (PCNV), and the other interview for a chronic condition (breast cancer). Preferences were elicited for QALYs using visual analogue scale (VAS), and standard gamble in addition to WTP. Because QALYs and WTP are purportedly based on the same underlying theoretical foundations, WTP was regressed onto change in QALYs, age, income, and health status.

RESULTS

Regression analysis reported statistically significant models for all breast cancer (P < .001) and PCNV (P < .05) conditions tested. However, QALY was not a significant predictor of WTP.

CONCLUSION

The results of this study indicate QALYs was a poor predictor of WTP for the conditions tested. Linear combinations of change in QALYs, age, income, and health status were a better predictor of WTP for chronic than acute conditions. This can be attributed to violations of underlying assumptions in measurement of QALYs with acute conditions and to problems with the use of WTP with chronic conditions.

Evaluation and review of pharmacoeconomic models

Difficult decisions as to whether to provide or withhold drug therapy to patients are needed to be made on a daily basis. These decisions should be based on carefully designed and constructed pharmacoeconomic models, with explicit and justifiable parameter values, validated by publication in peer-reviewed literature. This review describes and evaluates the common types of pharmacoeconomic models, modelling approaches and methods. It also discusses model quality, validity and usefulness.

Discounting health effects in pharmacoeconomic evaluations: current controversies

Currently, much debate still surrounds the discounting of health effects. Most general consensus statements have argued for the same discount rate for health and money; however, this practice has been questioned by several authors. The choice of discount rate can have varying effects on interventions, depending on the disease area. In this paper, we review two major current controversies around discounting: the use of similar or differential discount rates for health and money; and the validity of the underlying discounting model (time preference, constant discounting and the use of aggregated utilities for health effects). Various arguments justify a different rate of discounting for health effects than for money. Empirical evidence questions the validity of the constant discounting model, pointing out that time preference is not constant and should not be applied as such. Also, the validity of the aggregated utility model for health might be questioned, implying that a life cannot simply be cut into life years as single entities that are discounted back to the net present value. Such debates have led to varying methodologies being employed in economic evaluations, causing difficulties in their interpretation. Although there is sufficient evidence to question the use of similar discount rates for health and money, currently there is not enough information on the nature of the different processes that constitute discounting to reach a solid conclusion on the use of a different method. The lack of consensus on one of the most important topics in pharmacoeconomics makes the case for a more restricted use of cost-effectiveness or cost-utility ratios than as the most important singular outcome of pharmacoeconomic studies. Instead, results should be presented in a non-aggregated manner that enables policy makers to value health gains according to timing and to which subpopulation they are accrued in.

Evaluation of strategies for use of acellular pertussis vaccine in adolescents and adults: a cost-benefit analysis

Pertussis is increasingly recognized as a source of infection in adults who then commonly infect young children. Immunity to illness caused by Bordetella pertussis is not long-lived, so optimal control of pertussis may require booster immunizations. In a cost-benefit analysis, we evaluated the benefits of 7 independent strategies for administering a pertussis booster, in the form of a diphtheria-tetanus-acellular pertussis vaccine, to adolescents and adults. Break-even vaccine costs for each strategy were calculated by dividing costs preventable by vaccine by the number of persons eligible for vaccination. Of these strategies, the most economical would be to immunize adolescents 10-19 years of age, which would prevent 0.7-1.8 million pertussis cases and save 0.6 dollars-1.6 billion dollars over a decade. Although justified by our analysis, routine adult booster vaccinations every decade would be more expensive and more difficult to implement. A recommendation for booster vaccinations every 10 years requires more information about duration of immunity, program costs, compliance, and nonmedical costs associated with pertussis.