Valuing Health Outcomes: An Assessment of Approaches

Valuing Health Outcomes: An Assessment of Approaches
An RFF Conference
February 13-24, 2003

RFF logo

in partnership with

U.S. Environmental Protection Agency
U.S. Department of Agriculture
Occupational Safety & Health Administration
National Institutes of Health
Agency for Healthcare Research and Quality
Food and Drug Administration
U.S. Department of Transportation

Resources for the Future co-hosts a two-day conference on February 13-14, 2003 in Washington, DC to examine the conceptual and empirical bases for alternative health-benefit measures, the ways in which such measures are used and could be used in policymaking, and whether the choice of measure would actually make a difference in policy outcomes.

Bringing together a diverse group of experts, government officials, and stakeholders, the conference assesses the appropriate types and use of measures for valuing health outcomes of government activities.

Conference Background and OMB Draft Report
Currently, government agencies are required under Executive Order 13258 to evaluate the costs and benefits of major regulations, defined as those expected to have a cost of at least $100 million dollars. The current interpretation of this directive is that agencies should provide estimates of economic benefits based on aggregations of individual willingness-to-pay (WTO), which reflects individual preferences for health and environmental improvements, and to compare them with the costs. Government agencies also evaluate non-regulatory activities. Practices here vary widely, including the use of cost-benefit and cost-effectiveness analysis, and for health benefits, the use of monetary valuation and other measures, such as Quality-Adjusted Life Years (QALYs).

The Office of Management and Budget, which reviews all regulations for compliance with E.O. 13258, has said it is considering the use of new effectiveness measures that combine information on mortality and morbidity, such as QALYs.

OMB is considering such measures because

1. They allow for aggregation of mortality and morbidity without application of dollar values.

2. They provide more emphasis on morbidity impacts, and

3. QALYs have been widely adopted in the public health economics literature.

See also:



Session I: The Policy Context

Moderator: Randall S. Kroszner, Council of Economic Advisors



Mark McClellan Commissioner of FDA



Thomas Gibson Chief of Staff, EPA



Session II: Role of Valuation in Policy Analysis
Moderator: Randall S. Kroszner, Council of Economic Advisors



Maureen Cropper University of Maryland and World Bank



Milt Weinstein Harvard University




Don Kenkel Cornell University



Bryan Luce MEDTAP



Session III: A Common Health Valuation Framework
Moderator: William Lawrence, AHRQ



James Hammit Harvard University



Lunch: The Challenges in Valuing Health: An OMB perspective



John Graham Office of Management and Budget



Session IV: Conceptual Issues
Moderator: Alan Krupnik, RFF



V. Kerry Smith North Carolina State University



Bernie O'Brien McMaster University



Session V: Empirical Issue
Moderator: Kelly Maguire, EPA



Kip Viscusi Harvard University



F. Reed Johnson



Alan Krupnik Resources for the Future




David Feeny Institute of Health Economics



Stephen Joel Coons University of Arizona

Robert Kaplan

Harvard University

Ellen MacKenzie

Harvard University



Session VI: Empirical Robustness of Measures
Moderator: Elise Golan, USDA



Michael Hanemann University of California, Berkeley

Rick Freeman

Bowdoin College

Peter Neumann

Harvard University

JoMauskopf

MEDTAP



Session VII: Does the Choice of Measure Matter?

Moderator: Marthe Gold, CUNY Medical School



Bryan Hubbell US EPA



Mark Dickie University of Central Florida



Donald Patrick University of Washington



Laurie Chestnut Stratus Consulting




David Evans WHO



Amiram Gafni McMaster University



Dan Brock NIH



Session VIII: Health Valuation Measures in Policy Analysis: Views from the Public
Moderator: Michael Taylor, RFF



Randy Lutter AEI

Wesley Warren

NRDC



Ned Groth Consumers Union



Session IX: The Practitioner's View

Government members of the Conference Steering Committee



Chris Dockins EPA



Clark Nardinelli FDA



Joseph Lipscomb NIH


Debbie Aiken OSHA

Suggested Readings

Alberini, Anna, Maureen Cropper, Alan Krupnick and Nathalie B. Simon.
Does the Value of a Statistical Life Vary with Age and Health Status? Evidence from the United States and Canada
RFF Discussion Paper 02-19 | April 2002 | Abstract

Alvarez-Farizo, Begoña, Nick Hanley, Jorunn Grande, and Carol Salt. 2002. Risk Perceptions, Risk-Reducing Behaviour and Willingness to Pay: Radioactive Contamination in Food Following a Nuclear Accident.

Anand, Sudhir, and Kara Hanson, Disability-Adjusted Life Years: A Critical Review, Journal of Health Economics 16: 685-702, 1997.

Bala, M.V., J.A. Mauskopf, and L.L. Wood. 1999. Willingness to Pay as a Measure of Heath Benefits. PharmacoEconomics 15:9-18.

Bala MV, Zarkin GA, Mauskopf JA. 2002. Conditions for the near equivalence of cost-effectiveness and cost-benefit analyses. Value in Health 5: 338-346.

Bateman, Ian J., Roy Brouwer, Stavros Georgiou, Nick Hanley, Fernando Machado, Susana Mourato, Caroline Saunders. 2002. A 'Natural Experiment' Approach to Investigating Scope Sensitivity in Values for Risk Reductions: Private and Public UV Health Risk Reduction Strategies in Low and High Risk Countries.

Bleichrodt, Han, and Magnus Johannesson. 1997. The Validity of QALYs: An Experimental Test of Constant Proportional Tradeoff and Utility Independence, Medical Decision Making 17: 21-32.

Costa, Dora, and Matthew E. Kahn. 2002. Changes in the Value of Life, 1940-1980. National Bureau of Economic Research Working Paper 9396. Cambridge, MA. December.

de Blaeij, Arianne, Raymond Florax, Piet Rietveld, and Erik Verhoef. 2002. The Value of Statistical Life in Road Safety: A Meta-analysis.

Dolan, Paul, and Richard Edlin. 2000. Is It Really Possible to Build a Bridge between Cost-Benefit Analysis and Cost-Effectiveness Analysis? Journal of Health Economics 21: 827-843.

Dolan, Paul. Modeling valuations for EuroQol health states. Medical Care 1997;35:1095-1108.

Dolan P, Gudex C, Kind P, Williams A. The time-trade-off method: results from a general population study. Health Economics 1996;5:141-154.

Feeny, David, "A Utility Approach to Assessing Health-Related Quality of Life." Medical Care, Vol. 38, No. 9, Supplement II, September, 2000, pp II-151 - II-154. PDF file attached.

Feeny, David, William Furlong, George W. Torrance, Charles H. Goldsmith, Zenglong Zhu, Sonja DePauw, Margaret Denton, and Michael Boyle, "Multi-Attribute and Single-Attribute Utility Functions for the Health Utilities Index Mark 3 System." Medical Care, Vol. 40, No. 2, February, 2002, pp 113-128. PDF file attached.

Freeman, A. Myrick III, James K. Hammitt, and Paul DeCivita. 2002. On Quality-Adjusted Life Years (QALYs) and Environmental/Consumer Safety Valuation.

French, M.T., and J.A. Mauskopf. 1992. A Quality-of-Life Method for Estimating the Value of Avoided Morbidity. American Journal of Public Health 82:15553-1555.

French, M.T., J.A. Mauskopf, J.L. Teague, and E. Roland. 1996. Estimating the Dollar Value of Health Outcomes from Drug Abuse Interventions. Medical Care 34(9):890-910.

Gold M.R., D.L. Patrick, G.W. Torrance, D.G. Fryback, D.C. Hadorn, M.S. Kamlet, N. Daniels, and M.C. Weinstein. 1996. Identifying and valuing outcomes. Chapter 4 (pp. 82-134) in Gold M.R., J.E. Siegel, L.B. Russell, and M.C.Weinstein, Eds. Cost-Effectiveness in Health and Medicine. New York, Oxford University Press.

Gold, Marthe R., David Stevenson, and Dennis G. Fryback. 2002. Halys and QALYs and DALYs, Oh My: Similarities and Differences in Summary Measures of Population Health. Annual Review of Public Health 23: 115-134.

Hammitt, James K. 2002. QALYs v. WTP. Harvard Center for Risk Analysis, Boston, MA. January.

Hammitt, James K., and Jin-Tan Liu. 2003. Effects of Disease Type and Latency on the Value of Mortality Risk. Harvard Center for Risk Analysis, Boston, MA. January.

Hubbell, Bryan J. 2002. Implementing QALYs in the Analysis of Air Pollution Regulation. Draft.

Hunink M., P. Glasziou, J. Siegel, J. Weeks, J. Pliskin, A. Elstein, and M. Weinstein. 2001. Decision Making in Health and Medicine. Cambridge, UK, Cambridge University Press. Chapter 4, pp. 88-127.

Kind P, Dolan P, Gudex C, Williams A. Variations in population health status: results from a United Kingdom national questionnaire survey. British Medical Journal 1998;316:736-741.

Klose, Thomas. 2003. A Utility Theoretic Model for QALYs and Willingness to Pay. Health Economics 12:17-31.

Krupnick, Alan, Anna Alberini, Maureen Cropper, Bernie O'Brien, Ron Goeree, and Martin Heintzelman. Age, Health, and the Willingness to Pay for Mortality Risk Reductions: A Contingent Valuation Survey of Ontario Residents
RFF Discussion Paper 00-37 | September 2000 | Abstract

Mauskopf, J.A., and M.T. French. 1991. Estimating the Value of Avoiding Morbidity and Mortality from Foodborne Illnesses. Risk Analysis 11(4):619-632.

Murray, Christopher, Joshua Salomon, Colin Mathers, and Alan Lopez, Eds. 2002. Summary Measures of Population Health: Concepts, Ethics, Management, and Applications. Geneva: World Health Organization.

O'Brien, Bernie, Kirsten Gersten, Andrew Willan, and Lisa Faulker. 2002. Is There a Kink in Consumers' Threshold Value for Cost-Effectiveness in Health Care? Health Economics 11: 175-180.

Office of Management and Budget. 2002. Draft Report to Congress on the Costs and Benefits of Federal Regulations.

Sloan, Frank A., W. Kip Viscusi, Harrell W. Chesson, Christopher J. Conover and Kathryn Whetten-Goldstein. 1998. Alternative Approaches to Valuing Intangible Health Losses: The Evidence for Multiple Sclerosis. Journal of Health Economics 17: 475-497.

Smith, V. Kerry, Mary F. Evans, Hyun Kim, and Donald H. Taylor, Jr. 2002. Do the "Near" Elderly Value Mortality Risks Differently?

Torrance, George W., and David Feeny, "Utilities and Quality-Adjusted Life Years." International Journal of Technology Assessment in Health Care, Vol. 5, No. 4, 1989, pp 559-575.

Torrance G.W. 1986. Measurement of health states for economic appraisal: a review. Journal of Health Economics 5:1-30.

Tsuge, K., Kishimoto, A. and Takeuchi, K. An Integrated Framework for the Valuation of Mortality: Accident VS. Cancer VS. Heart Disease, Discussion Paper No.217, Graduate School of Economics, Kobe University, December, 2002.

Viscusi, W. Kip, and Joseph E. Aldy. 2002. The Value of a Statistical Life: A Critical Review of Market Estimates Around the World.

Weinstein Milton C., Joanna E. Siegel, Marthe R. Gold, et. al. 1996. Recommendations of the Panel on Cost-Effectiveness In Health and Medicine," JAMA 276:1253-1258.