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Cost‐effectiveness analysis when the WTA is greater than the WTP
Author(s) -
Willan Andrew R.,
O'Brien Bernie J.,
Leyva Rina A.
Publication year - 2001
Publication title -
statistics in medicine
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.996
H-Index - 183
eISSN - 1097-0258
pISSN - 0277-6715
DOI - 10.1002/sim.1018
Subject(s) - willingness to pay , interpretability , willingness to accept , cost effectiveness , actuarial science , cost–benefit analysis , econometrics , medicine , computer science , economics , risk analysis (engineering) , microeconomics , ecology , biology , machine learning
The incremental cost effectiveness ratio has long been the standard parameter of interest in the assessment of the cost‐effectiveness of a new treatment. However, due to concerns with interpretability and statistical inference, authors have suggested using the willingness‐to‐pay for a unit of health benefit to define the incremental net benefit as an alternative. The incremental net benefit has a more consistent interpretation and is amenable to routine statistical procedures. These procedures rely on the fact that the willingness‐to‐accept compensation for a loss of a unit of health benefit (at some cost saving) is the same as the willingness‐to‐pay for it. Theoretical and empirical evidence suggest, however, that in health care the willingness‐to‐accept is about twice as much as the willingness‐to‐pay. We use Bayesian methods to provide a statistical procedure for the cost‐effectiveness comparison of two arms of a randomized clinical trial that allows the willingness‐to‐pay and the willingness‐to‐accept to have different values. An example is provided. Copyright © 2001 John Wiley & Sons, Ltd.