VALUATION OF HEALTH STATES

Question 1

Definition of Health Economics?

Answer 1

Application of economic models and empirical techniques to the analysis of-decision making by healthcare agents with respect to health care

Question 2

Why do we value health states?

Answer 2

Need to know how much the health state or change in state is valued … what it is worth to the individual i.e. a measure of preference

Compare health states with each other

Question 3

Main criteria for judging how good a health-related quality of life (HRQOL) indicators is?

Answer 3

1. RELIABILITY - produces consistent measurements
2. VALIDITY - measures what is supposed to be measured
3. RESPONSIVENESS - how sensitive the result from the HRQOL indicator are to changes in health
4. FEASIBILITY - is it possible to use the indicators

Question 4

Special requirements for the HRQOL indicators?

Answer 4

1. should provide an unambiguous measure of benefit … say whether treatment is better or worse
   
   • single number that summaries health change
2. should be capable to comparing different possible uses of scarce resource
   
   • efficient and equitable use of resources
3. should be capable of being interpreted in terms of values
   
   • benefits = value of outputs
   • costs = value of inputs

Question 5

What do non-monetary valuations of health capture?

Answer 5

Consider measures of health that encapsulate both morbidity and mortality … account for the fact that health is multidimensional

Question 6

Aim of non-monetary valuations of health?

Answer 6

End goal is the construction of a meaningful measure of health: Quality Adjusted Life Years (QALYs) … two dimensions:

1. life-expectancy (as a measure of the extra life-years that may be procured)
2. quality adjustment/quality of life (as weights indicating the healthiness of the expected life-years)

we want a method of valuation of health states which “can simultaneously capture gains from reduced morbidity (quality of life gains) and reduced mortality (quantity of life gains)” (Drummond et al. 2015)

Question 7

Types of measure?

Answer 7

ORDINAL: ranking health states

CARDINAL - INTERVAL SCALE: each unit increment on the scale is equal

CARDINAL - RATIO: each unit increment on the scale is equal and zero is meaningful … we want this one

Question 8

Stages of obtaining health state valuation?

Answer 8

1. Describe and measure health state … usually based on interviews/questionnaires in which respondents are presented with ‘scenarios’ that describe a health state
2. Valuation of the health state … need to elicit preference values
   - methods for attaching non-monetary valuation to health states

Question 9

Definition of Visual Analogue Scale?

Answer 9

A scale that provides anchor points against which respondents rank the desirability of health states in their opinion (based on their value preferences)

Question 10

What is the Visual Analogue Scale?

Answer 10

Scale has to cover the entire spectrum of feasible states

- best imaginable health state … worst imaginable health state

Question 11

How does the Visual Analogue Scale work?

Answer 11

1. respondents are given a set of health states (or based on their existing health state)
2. Asked to value the health states and place them on the scale

Question 12

Advantages of the Visual Analogue Scale?

Answer 12

Easy to use and understand … useful to introduce respondents to health states

Good response rate - quick to complete

Useful as a robustness check for other methods of valuation

Can be used in a time series

Question 13

Disadvantages of the Visual Analogue Scale?

Answer 13

No notion of opportunity cost … do not have to trade-off quantity or quality of life

Spreading effect … respondents try to use the whole scale

Context bias … respondents may not be indicating strength of preference, but simply just ranking their preference of health state 1 over 2 i.e. ordinal ranking

No clarity that a change from 0 to 25 is valued the same as 25 to 50 … no anchor to show death

Torrance et al. (2001) argue that can only value max. of 6 health states otherwise process loses usefulness

Question 14

Definition of Time Trade Off?

Answer 14

Embodies the notion of sacrifice between quality of life and quality of life

Question 15

How does Time Trade Off work?

Answer 15

Method tries to estb. where indv. is indifferent between 2 options by varying the amount of time spent in full health

A. Respondent chooses between 2 options for a given health state
1. full-length of life in the health state to be valued (LOLb)
2. shorted period of life in full health (LOLa)
B. Vary the time spent in full health until indv. is indifferent between the 2 options
C. Final utility score is reached at point of indifference … QOLb = LOLa/LOLb

Question 16

Assumption made in Time Trade Off?

Answer 16

People will choose the option that produces the highest QALY value

Question 17

Advantages of Time Trade Off?

Answer 17

Based on choice – embodies at least a stated account of opportunity costs

Addresses quality vs. quantity trade off … people thinking about trade-off between quality of life and quantity of life

Fairly easy to understand

Question 18

Disadvantages of Time Trade Off?

Answer 18

Assumes thats nothing changes once indvs. have made their choice … individuals trade off a constant proportion of their remaining life years

• But value might change as duration in state changes e.g. some severe states become intolerable
• Time preference may contaminate values … mix up preferences over time - e.g. health state might be fine at one age but not another

No account taken of risk … risk neutrality assumed

Unrealistic alternatives … e.g. telling a 60yr old that they could live for 60 years is unfeasible - have to ensure that ‘full length of life’ is realistic for the indv.

Question 19

Definition of Standard Gamble?

Answer 19

Embodies the notion of sacrifice between health and risk

Question 20

How does Standard Gamble work?

Answer 20

Method tries to estb. where people are indifferent between the two options by varying the probability of living in full health

A. Respondent chooses between 2 options for a given health state
1. health state with certainty (H1) … live in a specified health state worse than full health for the rest of your life
2. two different health states with uncertainty (H2 and H3) … probability p of living in full health for the rest of your life OR probability (1-p) of immediate death
B. Vary the probability of living in full health until indv. is indifferent between the 2 options
C. At the point of indifference … i = p = utility value of H1

Question 21

Advantages of Standard Gamble?

Answer 21

Economic gold standard – von Neumann-Morgernstern utilities/probabilities
- Directly consider these to be utilities which can directly compare

Based on choice and sacrifice … like real life

Involves uncertainty and is therefore more realistic for medical decision making

Addresses the quantity/quality trade-off

Question 22

Disadvantages of Standard Gamble?

Answer 22

Probability can be difficult for respondents to understand

Probabilities can be unrealistically high (risk aversion) …
SG results affected by attitude to risk

Method applies only to a chronic health state that is preferred to death

Question 23

Definition of Generic multi-attribute utility scales?

Answer 23

Provides a profile of a person’s health state

Question 24

Example of a Generic multi-attribute utility scales?

Answer 24

EQ-5D-3L

• one of the most widely reported multi-attribute index measure of health status in both clinical and economic studies
• NICE’s preferred measure of HRQOL in adults

EQ-5D-5L

Question 25

How does EQ-5D-3L work?

Answer 25

1. Health state classification system … Asks individuals to rate 5 dimensions (mobility, self-care, usual activities, pain/discomfort, anxiety/depression) on 3 levels (roughly speaking: no problems, moderate problems, extreme problems) which best describes their health state
2. Tariff of utility values for all health states is defined by the classification of the coded health state … predicts values for the weights and can therefore be used to value all 243 possible state classification
3. Weighted utility score gives QALYs … spending a year in the state would deemed to be X QALYs

Question 26

Advantages of EQ-5D-3L?

Answer 26

Ask people questionnaire and can directly assign utility … most reliable and effective method

243 (3^5) possible classifications

Can show changes in health state over time as indvs. move through different classifications

Question 27

Disadvantages of EQ-5D-3L?

Answer 27

Only 3 levels … EQ-5D-5L has more levels (can be more precise)

Might not pick everything people value with respect to health – descriptive questionnaire which tells patients what to value with regards to their health

Cross country comparisons are made difficult as some use TTO score and VAS score to get utility score … NICE uses TTO score

Question 28

What do monetary valuations of health capture?

Answer 28

Two main types Cost-Benefit Analysis approach can be used to directly elicit the monetary value of health care benefits

Question 29

Definition of Revealed Preference?

Answer 29

Valuation of health that can be inferred from real choices made in the everyday world … choices reveal people’s preferences

Question 30

How can Revealed Preference capture health state valuation?

Answer 30

Can be used to value a specific health intervention, or to value a “statistical life” … what people are willing to pay to reduce their risk of death

Question 31

How does Revealed Preference work?

Answer 31

1. Find upper and lower bounds of prices a person is willing to pay for health intervention
2. Vary prices between these two limits and person’s choices can be observed
3. Identify person’s maximum willingness to pay … that shows have much they value the health care intervention

Question 32

Definition of Stated Preference?

Answer 32

Hypothetical choices are considered via surveys or experiments (willingness to pay studies) … asks how much person is willing to pay hypothetically

Question 33

How does Stated Preference work?

Answer 33

1. Survey respondents are presented with a situation/scenario
2. Ask respondents how much willing to pay for the intervention … what is the max you are willing to pay?

Question 34

Advantages of Monetary valuation methods?

Answer 34

Measures the monetary value of any health benefits gained by the patients + the value to society of other consequences e.g. ability to take paid employment

Question 35

Disadvantages of Monetary valuation methods?

Answer 35

Difficult to design the experiment

• Need to make sure hypothetical scenarios are valid and realistic to avoid respondent answering based on what the researcher wants to hear
• Must be representative of the population using the service

Poor observed correlation between hypothetical and real WTP

• Incentives/context may be different in important ways
• Environment in which make the decisions will be different

Ultimately implies a cost-benefit-type analysis that we may deem to be inappropriate in the sphere of health and healthcare

Question 36

Evaluation of methods of monetary and non-monetary valuation of health states.

Answer 36

Need to be aware of the perspective/viewpoint for evaluation

• Purpose of economic evaluation will have fundamental impact on the viewpoint from which the evaluation is to be performed
• Viewpoint chosen can affect the judgement whether something is good or not good value for money

Valuations are dependent on people’s opinion of pain/illness
- Some may value pain higher or lower in comparison to others