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      WTP for a QALY and health states: More money for severer health states?

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          Abstract

          Background

          In economic evaluation, cost per quality-adjusted life year (QALY) is generally used as an indicator for cost-effectiveness. Although JPY 5 million to 6 million (USD 60, 000 to 75,000) per QALY is frequently referred to as a threshold in Japan, do all QALYs have the same monetary value?

          Methods

          To examine the relationship between severity of health status and monetary value of a QALY, we obtained willingness to pay (WTP) values for one additional QALY in eight patterns of health states. We randomly sampled approximately 2,400 respondents from an online panel. To avoid misunderstanding, we randomly allocated respondents to one of 16 questionnaires, with 250 responses expected for each pattern. After respondents were asked whether they wanted to purchase the treatment, double-bounded dichotomous choice method was used to obtain WTP values.

          Results

          The results clearly show that the WTP per QALY is higher for worse health states than for better health states. The slope was about JPY −1 million per 0.1 utility score increase. The mean and median WTP values per QALY for 16 health states were JPY 5 million, consistent with our previous survey. For respondents who wanted to purchase the treatment, WTP values were significantly correlated with household income.

          Conclusion

          This survey shows that QALY based on the EQ-5D does not necessarily have the same monetary value. The WTP per QALY should range from JPY 2 million (USD 20,000) to JPY 8 million (USD 80,000), corresponding to the severity of health states.

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          Most cited references11

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          Intergenerational equity: an exploration of the 'fair innings' argument.

          Many different equity principles may need to be traded off against efficiency when prioritizing health care. This paper explores one of them: the concept of a 'fair innings'. It reflects the feeling that everyone is entitled to some 'normal' span of health (usually expressed in life years, e.g. 'three score years and ten') and anyone failing to achieve this has been cheated, whilst anyone getting more than this is 'living on borrowed time'. Four important characteristics of the 'fair innings' notion are worth noting: firstly, it is outcome based, not process-based or resource-based; secondly, it is about a person's whole life-time experience, not about their state at any particular point in time; thirdly, it reflects an aversion to inequality; and fourthly, it is quantifiable. Even in common parlance it is usually expressed in numerical terms: death at 25 is viewed very differently from death at 85. But age at death should be no more than a first approximation, because the quality of a person's life is important as well as its length. The analysis suggests that this notion of intergenerational equity requires greater discrimination against the elderly than would be dictated simply by efficiency objectives.
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            Incorporating societal concerns for fairness in numerical valuations of health programmes.

            The paper addresses some limitations of the QALY approach and outlines a valuation procedure that may overcome these limitations. In particular, we focus on the following issues: the distinction between assessing individual utility and assessing societal value of health care; the need to incorporate concerns for severity of illness as an independent factor in a numerical model of societal valuations of health outcomes; similarly, the need to incorporate reluctance to discriminate against patients that happen to have lesser potentials for health than others; and finally, the need to combine measurements of health-related quality of life obtained from actual patients (or former patients) with measurements of distributive preferences in the general population when estimating societal value. We show how equity weights may serve to incorporate concerns for severity and potentials for health in QALY calculations. We also suggest that for chronically ill or disabled people a life year gained should count as one and no less than one as long as the year is considered preferable to being dead by the person concerned. We call our approach 'cost-value analysis'.
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              Willingness to pay for a quality-adjusted life year: implications for societal health care resource allocation.

              Health-state preferences can be combined with willingness-to-pay (WTP) data to calculate WTP per quality-adjusted life year (QALY). The WTP/QALY ratios provide insight into societal valuations of expenditures for medical interventions. The authors measured preferences for current health in 3 patient populations (N = 391) using standard gamble, time trade-off, visual analog scale, and WTP, then they calculated WTP/QALY ratios. The ratios were compared with several proposed cost/QALY cost-effectiveness ratio thresholds, the value-of-life literature, and with WTP/QALY ratios derived from published preference research. Mean WTP/QALY ratios ranged from 12,500 to 32,200 US dollars (2003 US dollars). All values were below most published cost-effectiveness ratio thresholds, below the ratio from a prototypic medical treatment covered by Medicare (i.e., renal dialysis), and below ratios from the value-of-life literature. The WTP/QALY ratios were similar to those calculated from published preference data for patients with symptomatic meno-pause, dentofacial deformities, asthma, or dermatologic disorders. WTP/QALY ratios calculated using preference data collected from diverse populations are lower than most proposed thresholds for determining what is "cost-effective." Current proposed cost-effectiveness ratio thresholds may overestimate the willingness of society to pay for medical interventions.
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                Author and article information

                Journal
                Cost Eff Resour Alloc
                Cost Eff Resour Alloc
                Cost Effectiveness and Resource Allocation : C/E
                BioMed Central
                1478-7547
                2013
                1 September 2013
                : 11
                : 22
                Affiliations
                [1 ]Center for Public Health Informatics, National Institute of Public Health, 2-3-6 Minami, Wako, Saitama 3510197, Japan
                [2 ]Department of Drug Policy and Management, Graduate School of Pharmaceutical Sciences, The University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 1130033, Japan
                [3 ]Department of Pharmaceutical Sciences, School of Pharmacy, International University of Health and Welfare, 2600-1 Kitakanemaru, Otawara, Tochigi 3248501, Japan
                Article
                1478-7547-11-22
                10.1186/1478-7547-11-22
                3766196
                24128004
                e75ee8f0-878a-43e1-80fd-12a2eff62776
                Copyright ©2013 Shiroiwa et al.; licensee BioMed Central Ltd.

                This is an Open Access article distributed under the terms of the Creative Commons Attribution License ( http://creativecommons.org/licenses/by/2.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

                History
                : 9 May 2013
                : 28 August 2013
                Categories
                Research

                Public health
                quality-adjusted life years,willingness-to-pay,threshold,cost-effectiveness analysis

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