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Willingness to Pay for a Quality-Adjusted Life Year: Implications for Societal Health Care Resource Allocation

Author

Listed:
  • Joseph T. King Jr.

    (VA Connecticut Healthcare System, West Haven, CT, Department of Neurosurgery, Yale University, New Haven, CT, Joseph.KingJr@med.va.gov)

  • Joel Tsevat

    (Department of Internal Medicine and the Center for Clinical Effectiveness at the Institute for Health Policy and Health Services Research, University of Cincinnati Medical Center, Cincinnati, OH, Veterans Affairs Medical Center, Cincinnati, OH)

  • Judith R. Lave

    (Department of Health Policy and Management, Graduate School of Public Health, University of Pittsburgh, Pittsburgh, PA, Center for Research on Health Care, University of Pittsburgh, Pittsburgh, PA)

  • Mark S. Roberts

    (Department of Medicine and the Division of General Internal Medicine, University of Pittsburgh, Pittsburgh, PA, Center for Research on Health Care, University of Pittsburgh, Pittsburgh, PA)

Abstract

Background . Health-state preferences can be combined with willingness-to-pay (WTP) data to calculate WTP per quality-adjusted life year (QALY). The WTP/QALY ratios provide insight into societal valuations of expenditures for medical interventions. Methods . The authors measured preferences for current health in 3 patient populations (N = 391) using standard gamble, time trade-off, visual analog scale, and WTP, then they calculated WTP/QALY ratios. The ratios were compared with several proposed cost/QALY cost-effectiveness ratio thresholds, the value-of-life literature, and with WTP/QALY ratios derived from published preference research. Results . Mean WTP/QALY ratios ranged from $12,500 to $32,200 (2003 $US). All values were below most published cost-effectiveness ratio thresholds, below the ratio from a prototypic medical treatment covered by Medicare (i.e., renal dialysis), and below ratios from the value-of-life literature. The WTP/QALY ratios were similar to those calculated from published preference data for patients with symptomatic meno-pause, dentofacial deformities, asthma, or dermatologic disorders. Conclusions . WTP/QALY ratios calculated using preference data collected from diverse populations are lower than most proposed thresholds for determining what is “cost-effective.†Current proposed cost-effectiveness ratio thresholds may overestimate the willingness of society to pay for medical interventions.

Suggested Citation

  • Joseph T. King Jr. & Joel Tsevat & Judith R. Lave & Mark S. Roberts, 2005. "Willingness to Pay for a Quality-Adjusted Life Year: Implications for Societal Health Care Resource Allocation," Medical Decision Making, , vol. 25(6), pages 667-677, November.
    • Handle: RePEc:sae:medema:v:25:y:2005:i:6:p:667-677
    DOI: 10.1177/0272989X05282640
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    References listed on IDEAS

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    1. Alan Diener & Bernie O'Brien & Amiram Gafni, 1998. "Health care contingent valuation studies: a review and classification of the literature," Health Economics, John Wiley & Sons, Ltd., vol. 7(4), pages 313-326, June.
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    3. Sprangers, Mirjam A. G. & Schwartz, Carolyn E., 1999. "Integrating response shift into health-related quality of life research: a theoretical model," Social Science & Medicine, Elsevier, vol. 48(11), pages 1507-1515, June.
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