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Cost-effectiveness acceptability curves and a reluctance to lose
Johan L Severens1, Daniëlle E M Brunenberg, Elisabeth A L Fenwick
1The Department of Health Organisation, Policy and Economics, University Maastricht, Maastricht, The Netherlands. h.severens@beoz.unimaas.nl
Pharmacoeconomics
|December 13, 2005
Summary
Cost-effectiveness acceptability curves (CEACs) assume willingness to pay (WTP) equals willingness to accept (WTA). This study shows differing WTP/WTA impacts CEACs, suggesting multiple curves for accurate cost-effectiveness analysis.
Area of Science:
- Health economics
- Decision analysis
- Pharmacoeconomics
Background:
- Cost-effectiveness acceptability curves (CEACs) are standard for presenting uncertainty in incremental cost-effectiveness ratios (ICERs).
- CEAC construction assumes willingness to pay (WTP) for health gain equals willingness to accept (WTA) health loss.
- Empirical evidence indicates WTP and WTA are not always equal, with a discrepancy ratio (accept/reject ratio) potentially varying from 1 to infinity.
Purpose of the Study:
- To investigate the impact of differing WTP and WTA values on CEACs.
- To explore how the accept/reject ratio influences the interpretation of cost-effectiveness results.
- To propose methods for representing WTP/WTA discrepancies in economic evaluations.
Main Methods:
- Utilized data from two clinical trials to empirically assess the effect of WTP/WTA discrepancies.
- Analyzed how variations in the accept/reject ratio alter the cost-effectiveness plane and resulting CEACs.
- Simulated CEACs under different accept/reject ratio assumptions.
Main Results:
- Relaxing the 1:1 WTP/WTA assumption significantly impacts CEACs.
- A discrepancy between WTP and WTA can lead to a smaller cost-effective area in the southwest quadrant, lowering the CEAC.
- Empirical findings suggest individuals value removing effective therapies more than adopting new, costly ones.
Conclusions:
- The assumption of equal WTP and WTA may misrepresent cost-effectiveness, particularly when uncertainty spans the southwest quadrant.
- Presenting a series of CEACs across a range of accept/reject ratios is recommended for robust analysis.
- Acknowledging and illustrating WTP/WTA discrepancies is crucial for accurate economic evaluations and policy decisions.
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