ReviewThe contingent valuation method in health care
Introduction
There is a growing interest in cost-benefit analysis (CBA) in the economic evaluation of health care technologies [1]. CBA measures all costs and consequences of technologies in monetary terms. It is possible to identify health care technologies which generate net-gains of benefits over the costs of their application. There are two main approaches to assign monetary values to life and health. The first covers human-capital [2] and friction cost measures [3], which measure the value of a person’s life or the indirect cost of disease by a person’s contribution to the gross domestic product measured by wage rates. This approach was widely criticised because of its inconsistency “with the basic rational of the economic calculus used in cost-benefit analysis”, [4], p. 691, which requires measures based on individuals’ preferences. With the second approach, willingness to pay (WTP) for a technology and its effects based on individuals’ preferences, is examined. The measurement of WTP can be derived by indirect (revealed preference approach) or direct methods (expressed preference approach) [5]. With indirect methods, the WTP is revealed from data on trade-offs between the effect to be valued and a monetary amount from which WTP measures can be derived. Examples are wage-risk or averting behaviour studies. The direct method is based on the expressed preferences of individuals. The WTP measure can further be linked to either observed market behaviour or to responses to hypothetical markets. See Ref. [6] for a classification of methods used to derive monetary valuations of non-market goods.
The contingent valuation method (CVM) in health care is defined here as a survey-based, hypothetical and direct method used for eliciting a monetary value of a health care technology. Several papers dealing with CVM in health care also review CVM studies [1], [5], [7], [8], [9], [10], [11]. All have in common that they only highlight on some aspects of studies using CVM in health care, rather than being comprehensive. Only one comprehensive review of the contingent valuation literature in health care exists [12]. The purpose of that review was to classify CVM studies by using empirical and conceptual criteria. The authors provided a very useful, quantitative summary of the literature serving as a basis for the appraisal of CVM. Their aim was “to help those who wish to read or design a CVM study gain a better understanding of how... and why CVM studies vary in terms of methods employed”, p. 314. They also stated that their “review attests that many methodological questions continue to be addressed in the literature”, p. 321, without reviewing especially according to the methodological results of the CVM studies. A comprehensive review of methodological and conceptual issues of the CVM in health technology evaluation does not exist.
This review is also comprehensive. It differs with Ref. [12] in the following aspects: it covers more studies, analyses methodological and conceptual aspects of CVM studies as well as the relation of WTP measured by CVM with other effectiveness measures of medical technology assessment. The primary aim is to provide a summary of methodological and conceptual results of CVM derived from literature in health care. These results may be of importance for the use of CVM studies in health care decision making and may also be used as a basis for appraisal and assessment of the performance of CVM studies in the health care field.
A brief summary of the structure of this paper is given now. Next, the methods of study searching and selection are described. The following sections provide an overview of the results of CVM studies in the health care field. There is special regard to methodological issues in Section 3 and conceptual issues in Section 4. A comparison of WTP within the economic evaluation of health care with effectiveness measures of cost-effectiveness (CEA) or cost-utility analysis (CUA) follows in Section 5. The paper ends with conclusions on further research and development of CVM in health care.
Section snippets
Methods of study searching and selection
Relevant studies were identified by searching computerised databases (MEDLINE, HEALTHSTAR, ECONIS) and the articles covering reviews of CVM [1], [5], [7], [8], [9], [10], [11], [12]. The search from these databases identified all studies with the terms ‘willingness to pay’, ‘willingness to accept’, ‘contingent valuation’ and ‘monetary valuation’ or ‘monetary value’ from title and abstract published before 1998. Furthermore, all papers stated in the review literature were included in a first
Methodological aspects of the CVM in health care
This section addresses several questions on methodological issues arising in studies in which contingent valuation was considered. At first, the results on elicitation methods are stated. Next, the question of bias is addressed. Then, results on validity and reliability of contingent valuations are stated. The section ends with a short summary of the results.
Conceptual aspects of the CVM in health care
In this section, conceptual aspects of the design of a contingent valuation study are addressed. The first section deals with the direction of measurement (willingness to pay vs. willingness to accept) and the kind of measure (compensating vs. equivalent variation). The section is followed by a review on the used payment methods. Next, results on the impact of different states of evaluation were derived from the studies and questions on subadditivity effects are addressed, followed by a brief
WTP compared with other measures of effectiveness: evidence from the CVM studies
In this section an overview over results of the CVM studies is provided, in which willingness to pay is compared with other measures of effectiveness used in CEA and CUA. While effectiveness measures of CEA only account for the pure health effects, utility measures account for the preferences over health in utility units measured in relation to perfect health. Willingness to pay measures health and non-health effects in monetary units. Beside the advantage that it makes it possible to compare
Conclusions
CVM was used and showed feasibility of use in a broad range of different technologies and diseases. There were widespread differences in the design of CVM studies with regard to methodological as well as to conceptual aspects. For a classification of CVM studies according to these issues, the reader is referred to Ref. [12]. Especially, the elicitation methods to derive monetary values showed widespread disparities such that contingent valuation as used in health technology assessment comprises
Acknowledgements
The author is grateful to Professor Dr R. Leidl, Ms D. Stratmann, MSc and anonymous referees for helpful comments on earlier drafts of this paper. The usual disclaimer applies.
References (128)
- et al.
The friction cost method for measuring indirect costs of disease
Journal of Health Economics
(1995) - et al.
Economic evaluation in health care: is there a role for cost-benefit analysis?
Health Policy
(1991) - et al.
Patient willingness to pay for a community pharmacy based medication reminder system
American Pharmacy
(1983) - et al.
Acceptability of the once-a-month injectable contraceptives Cyclofem and Mesigyna in Egypt
Contraception
(1994) - et al.
Economic comparison of a tissue adhesive and suturing in the repair of facial lacerations
Journal of Pediatrics
(1995) - et al.
The comparability and reliability of five health-state valuation methods
Social Science and Medicine
(1997) Economic considerations and outcome measurement in urge incontinence
Urology
(1997)- et al.
Threats to health or safety: perceived risk and willingness to pay
Social Science and Medicine
(1981) - et al.
Selected economic issues in helminth control
Social Science and Medicine
(1984) Economic evaluation in primary health care: the case of Western Kenya community based health care project
Social Science and Medicine
(1984)