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Toward a more universal approach in health valuation

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  • Benjamin M. Craig
  • Jan J. V. Busschbach

Abstract

By polling individual responses to hypothetical scenarios, valuation studies estimate population preferences toward health on a quality‐adjusted life year (QALY) scale. The scenarios typically involve trade‐offs in time (time trade‐off (TTO)), risk (standard gamble (SG)), or number of persons affected (person trade‐off (PTO)). This paper revisits the QALY assumptions and provides a coherent health econometric approach that unites TTO, SG, and PTO techniques under a common estimator. The proposed approach avoids the use of ratio statistics in QALY estimation and the common convention of arbitrarily changing trade‐off responses. As an example, 34% of the TTO responses from the seminal Measurement and Valuation of Health study were changed in the original UK analysis, which led to substantially lower QALY estimates. As a general rule, if the original estimate is less than 0.5 QALYs, add 0.25 QALYs to get the new estimates. Copyright © 2010 John Wiley & Sons, Ltd.

Suggested Citation

  • Benjamin M. Craig & Jan J. V. Busschbach, 2011. "Toward a more universal approach in health valuation," Health Economics, John Wiley & Sons, Ltd., vol. 20(7), pages 864-875, July.
    • Handle: RePEc:wly:hlthec:v:20:y:2011:i:7:p:864-875
    DOI: 10.1002/hec.1650
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    References listed on IDEAS

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    1. Benjamin M. Craig & Sulabha Ramachandran, 2006. "Relative risk of a shuffled deck: a generalizable logical consistency criterion for sample selection in health state valuation studies," Health Economics, John Wiley & Sons, Ltd., vol. 15(8), pages 835-848, August.
    2. George W. Torrance & Michael H. Boyle & Sargent P. Horwood, 1982. "Application of Multi-Attribute Utility Theory to Measure Social Preferences for Health States," Operations Research, INFORMS, vol. 30(6), pages 1043-1069, December.
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    4. Donald L. Patrick & Helene E. Starks & Kevin C. Cain & Richard F. Uhlmann & Robert A. Pearlman, 1994. "Measuring Preferences for Health States Worse than Death," Medical Decision Making, , vol. 14(1), pages 9-18, February.
    5. MacKinnon, James G. & White, Halbert, 1985. "Some heteroskedasticity-consistent covariance matrix estimators with improved finite sample properties," Journal of Econometrics, Elsevier, vol. 29(3), pages 305-325, September.
    6. Torrance, George W., 1986. "Measurement of health state utilities for economic appraisal : A review," Journal of Health Economics, Elsevier, vol. 5(1), pages 1-30, March.
    7. Colin Green, 2001. "On the societal value of health care: what do we know about the person trade‐off technique?," Health Economics, John Wiley & Sons, Ltd., vol. 10(3), pages 233-243, April.
    8. Benjamin M. Craig, 2009. "The duration effect: a link between TTO and VAS values," Health Economics, John Wiley & Sons, Ltd., vol. 18(2), pages 217-225, February.
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    1. Bansback, Nick & Brazier, John & Tsuchiya, Aki & Anis, Aslam, 2012. "Using a discrete choice experiment to estimate health state utility values," Journal of Health Economics, Elsevier, vol. 31(1), pages 306-318.
    2. Méndez, Ildefonso & Abellán Perpiñán, Jose M. & Sánchez Martínez, Fernando I. & Martínez Pérez, Jorge E., 2011. "Inverse probability weighted estimation of social tariffs: An illustration using the SF-6D value sets," Journal of Health Economics, Elsevier, vol. 30(6), pages 1280-1292.

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