ISOQOL 2004 Symposium
"Stating the Art: Advancing Outcomes Research Methodology and Clinical Applications"
June 27-29, 2004
Boston Park Plaza Hotel
Boston, MA, USA

Tuesday, June 29, 2004

Session 8: State of the Art Utilities/DCE/Q-TWiST
Presenters: David Feeny, Reed Johnson, and Rich Gelber
Chair: Dennis Revicki

Comparing and Contrasting Utilities and Willingness to Pay
David Feeny, PhD
Professor, Institute of Health Economics and University of Alberta, Edmonton, AB, Canada

The utility approach to assessing health-related quality of life (HRQL) and willingness to pay (WTP) are two widely uses families of techniques for assessing preferences for health outcomes in the evaluation of health and healthcare interventions. Both approaches rely on stated preferences rather than revealed preference (what people actually do.) The conventional scale for utility scores assigns a value of 1.0 to perfect health and 0.0 to dead. Utility scores obtained by direct assessments using techniques such as the standard gamble or by using multi-attribute systems are used to weight the time spent in each health state to estimate quality-adjusted life-years gained (QALYs). Estimates of the QALYs gained are in turn used as the denominator in cost-utility analyses (CUA). Results are reported as incremental net cost per QALY gained. Similarly WTP estimates are used to assess the value of the gain expressed in pecuniary (dollar) values. These estimates support cost-benefit analyses (CBA) in which all of the costs and benefits are expressed in dollar values and the results are reported as net benefits. The presentation will compare and contrast these two approaches with respect to a number of characteristics including the scope and comprehensiveness of the evaluation, nature of the objective function, informational and cognitive burdens on respondents, and ability to capture the underlying structure of preference judgements. Conceptual and practical advantages and disadvantages of both approaches will be discussed. The focus will be on “best practice” for assessing HRQL effects for both approaches. Conceptual advantages of WTP may be attenuated by practical disadvantages.

 

Bridges and Barriers: Willingness to Pay, Willingness to Wait, and Health-State Utility Measures
F. Reed Johnson, PhD
Principal Economist and Senior Fellow, RTI Health Solutions, Research Triangle Institute, Research Triangle Park, NC

Health economists and other economists measure utility in different ways. While QALYs are a powerful and useful way to compare dissimilar health outcomes, conventional economists often are puzzled by the weak link between such measures and the individual welfare measures used in nearly every other area of applied economics. This presentation discusses opportunities for bridging this gap and possible barriers that may stand in the way of progress