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Related Experiment Video

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Using Visual and Narrative Methods to Achieve Fair Process in Clinical Care
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Toward a Hedonic Value Framework in Health Care.

Anirban Basu1, Sean D Sullivan2

  • 1Pharmaceutical Outcomes Research and Policy Program, School of Pharmacy and Department of Health Services, University of Washington, Seattle, WA, USA; Department of Economics, University of Washington, Seattle, WA, USA; National Bureau of Economic Research, Cambridge, MA, USA.

Value in Health : the Journal of the International Society for Pharmacoeconomics and Outcomes Research
|February 27, 2017
PubMed
Summary

This study proposes a hedonic value framework for health insurance, using stated preference methods to capture population value distribution. This approach aims to inform coverage and subsidy decisions, integrating affordability for better healthcare resource allocation.

Keywords:
hedonic pricinginsurancevaluevalue framework

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Area of Science:

  • Health Economics
  • Behavioral Economics
  • Health Policy

Background:

  • Traditional hedonic pricing models are difficult to apply to health interventions due to market distortions and the non-tradable nature of health.
  • Existing healthcare valuation methods, like cost-effectiveness analysis, may not fully capture the diverse values individuals place on health interventions.

Purpose of the Study:

  • To develop a novel hedonic value framework for health insurance products using stated preference methods.
  • To inform decisions regarding insurance coverage and subsidies for health interventions by estimating their value.
  • To integrate affordability concerns into a comprehensive valuation model for health insurance.

Main Methods:

  • Utilizing stated preference methods to elicit individual valuations of health insurance attributes.
  • Developing a hedonic value framework that captures the distribution of marginal values across the population.
  • Integrating affordability considerations into the valuation model.

Main Results:

  • The proposed framework estimates a value index reflecting the distribution of marginal value in the population, not market equilibrium.
  • Affordability concerns can be systematically integrated into the hedonic valuation model.
  • The framework offers a comprehensive alternative to traditional cost-effectiveness analysis and existing value frameworks.

Conclusions:

  • A decision-theoretic hedonic value framework for health insurance is feasible and can systematically inform healthcare resource allocation.
  • This approach provides a more nuanced understanding of health intervention value by considering population-level marginal values and affordability.
  • The framework has the potential to guide pricing and coverage decisions for health insurance products for decades.