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Reassurance, regret and uncertainty: testing ex ante sources of (dis)utility and the welfarist account of social welfare

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  • Jeff Richardson

    () (Centre for Health Economics, Monash University)

  • John McKie

    () (Centre for Health Economics, Monash University)

Abstract

This paper considers an issue that has received little attention in the literature on health state evaluation: the relevance of the ex ante/ex post distinction in the assessment of quality of life. Ex post evaluations are based on experience of the health state being evaluated. Ex ante evaluations are made in anticipation of actually experiencing the health state, and are able to capture sources of pre-outcome (dis)utility such as anticipatory fear, anxiety, hope and dread. Which perspective should be used for economic evaluation? From the welfarist perspective it might be argued that ex ante evaluations should be used, because all sources of utility are relevant. From the extra-welfarist perspective it might argued that ex post evaluations should be used, because economic evaluation should be based solely on realised outcomes, at least in the context of a publicly financed health service. We sought the views of the Australian public on this issue. Using social willingness to pay questions, we asked respondents to select between alternative health services which either did, or did not, take pre-outcome sources of utility into account. Respondents were asked whether or not tax payers should pay a higher price for services that increased pre-outcome utility, and for which patients would be prepared to pay personally. They were also asked whether they would accept less spending on other health services for services that increased pre-outcome utility. The results indicated little support for welfarism. Of respondents, only 32.6 per cent would accept an increase in taxes for everyone to provide a service preferred by patients for its reassurance. Only 29.8 per cent would accept an increase in taxes to provide a service preferred by patients for its minimisation of potential for regret. Less decisively, 43.1 per cent would accept an increase in taxes to provide a service preferred by patients for its avoidance of uncertainty. On average, only 28.6 per cent of respondents would accept less spending on other health services to provide these services. The implications of these findings for economic evaluation studies are, first, that the Australian community does not believe that the purpose of its publicly financed health system should be to increase utility as defined by private willingness to pay and, second, that the gold standard for health-state measurement should elicit ex post evaluations from patients, not ex ante evaluations from the public.

Suggested Citation

  • Jeff Richardson & John McKie, 2005. "Reassurance, regret and uncertainty: testing ex ante sources of (dis)utility and the welfarist account of social welfare," Centre for Health Economics Working Papers 153/05, Monash University, Centre for Health Economics.
  • Handle: RePEc:mhe:chewps:2005-153
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    File URL: http://www.buseco.monash.edu.au/centres/che/pubs/wp153.pdf
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