Elsevier

Health Policy

Volume 47, Issue 2, 1 May 1999, Pages 97-123
Health Policy

Review
The contingent valuation method in health care

https://doi.org/10.1016/S0168-8510(99)00010-XGet rights and content

Abstract

The contingent valuation method (CVM) is a survey-based, hypothetical and direct method to determine monetary valuations of effects of health technologies. This comprehensive review of CVM in the health care literature points at methodological as well as conceptual issues of CVM and on willingness to pay as a measure of benefits compared with other measures used in medical technology assessment. Studies published before 1998 were found by searching computerised databases and former review literature. Studies were included, when performing CVM using original data and meeting qualitative criteria. Theoretical validity of CVM was sufficiently shown and there were several indications of convergent validity. No results on criterion validity and only a few on reliability were found. There was widespread use of different elicitation formats, which make comparisons of studies problematic. Direct questions were seen problematic. First bids used in bidding games influenced the monetary valuation significantly (starting point bias). There were indications that the range of bids of payment cards also affected the valuation (range bias). However, no strategic bias was found. The influence of different states of valuation (ex-ante, ex-post) and of payment methods, as well as the possible aggregation of the results of decomposed scenarios rather than more complex holistic scenarios, were rarely investigated. Further methodological analysis and testing seems to be necessary before CVM may be used in health care decision making. Important research topics are the connection of assessment of different elicitation methods and criterion validity as well as tests on reliability according to methodological issues. Concerning conceptual issues, the analysis of the influence of different states of evaluation and of the status of the respondents as diseased or non-diseased, as well as the aggregation of results of decomposed scenarios, proved to be topics of further research.

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.

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