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Measuring the end-of-life premium in cancer using individual ex ante willingness to pay

Author

Listed:
  • S. Olofsson

    (The Swedish Institute for Health Economics (IHE)
    Lund University)

  • U.-G. Gerdtham

    (The Swedish Institute for Health Economics (IHE)
    Lund University
    Lund University
    Lund University)

  • L. Hultkrantz

    (Örebro University)

  • U. Persson

    (The Swedish Institute for Health Economics (IHE)
    Lund University)

Abstract

For the assessment of value of new therapies in healthcare, Health Technology Assessment (HTA) agencies often review the cost per quality-adjusted life-year (QALY) gained. Some HTA agencies accept a higher cost per QALY gained when treatment is aimed at prolonging survival for patients with a short expected remaining lifetime, a so-called end-of-life (EoL) premium. The objective of this study is to elicit the existence and size of an EoL premium in cancer. Data was collected from 509 individuals in the Swedish general population 20–80 years old using a web-based questionnaire. Preferences were elicited using subjective risk estimation and the contingent valuation (CV) method. A split-sample design was applied to test for order bias. The mean value of a QALY was MSEK4.8 (€528,000), and there was an EoL premium of 4–10% at 6 months of expected remaining lifetime. Using subjective risk resulted in more robust and valid estimates of the value of a QALY. Order of scenarios did not have a significant impact on the WTP and the result showed scale sensitivity. Our result provides some support for the use of an EoL premium based on individual preferences when expected remaining lifetime is short and below 24 months. Furthermore, we find support for a value of a QALY that is above the current threshold of several HTA agencies.

Suggested Citation

  • S. Olofsson & U.-G. Gerdtham & L. Hultkrantz & U. Persson, 2018. "Measuring the end-of-life premium in cancer using individual ex ante willingness to pay," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(6), pages 807-820, July.
    • Handle: RePEc:spr:eujhec:v:19:y:2018:i:6:d:10.1007_s10198-017-0922-6
    DOI: 10.1007/s10198-017-0922-6
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    2. Fischer, Barbara & Telser, Harry & Zweifel, Peter & von Wyl, Viktor & Beck, Konstantin & Weber, Andreas, 2023. "The value of a QALY towards the end of life and its determinants: Experimental evidence," Social Science & Medicine, Elsevier, vol. 326(C).
    3. S. Olofsson & U.-G. Gerdtham & L. Hultkrantz & U. Persson, 2019. "Value of a QALY and VSI estimated with the chained approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 20(7), pages 1063-1077, September.
    4. Ulf Persson & J. M. Norlin, 2018. "Multi-indication and Combination Pricing and Reimbursement of Pharmaceuticals: Opportunities for Improved Health Care through Faster Uptake of New Innovations," Applied Health Economics and Health Policy, Springer, vol. 16(2), pages 157-165, April.

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    More about this item

    Keywords

    Willingness to pay; End of life; Value of a QALY; Cancer; Individual preferences; Contingent valuation;
    All these keywords.

    JEL classification:

    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income

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