Cost-effectiveness analysis when the WTA is greater than the WTP

Area of Science:

• Health Economics
• Biostatistics
• Clinical Trial Analysis

Background:

• The incremental cost-effectiveness ratio (ICER) is a standard but debated metric for treatment cost-effectiveness.
• Concerns regarding ICER interpretability and statistical inference have led to the proposal of incremental net benefit (INB).
• INB relies on willingness-to-pay (WTP) for health gains, assuming it equals willingness-to-accept (WTA) compensation for health losses.

Purpose of the Study:

• To develop a statistical procedure for cost-effectiveness comparison that accounts for potential discrepancies between WTP and WTA.
• To provide a more robust method for analyzing randomized clinical trials using Bayesian approaches.
• To offer an alternative to traditional ICER analysis with improved interpretability and statistical properties.

Main Methods:

• Utilized Bayesian statistical methods for cost-effectiveness analysis.
• Developed a procedure for comparing two arms of a randomized clinical trial.
• Incorporated distinct values for willingness-to-pay and willingness-to-accept into the model.

Main Results:

• The proposed Bayesian method allows for differential values of WTP and WTA in cost-effectiveness comparisons.
• Theoretical and empirical evidence suggests WTA is often twice WTP in healthcare settings.
• The method provides a statistically sound approach to cost-effectiveness analysis accommodating this asymmetry.

Conclusions:

• The developed Bayesian procedure offers a flexible and interpretable alternative for cost-effectiveness analysis in clinical trials.
• It addresses the limitations of traditional methods by allowing separate WTP and WTA values.
• This approach enhances the reliability of economic evaluations in healthcare decision-making.