Monetary value of health-a practical decision-making framework combining equity considerations and WTP

We estimate the first monetary value of a health gain in Croatia to inform the debate about the appropriate "demand-side" cost-effectiveness thresholds in Croatia but also Central and Eastern Europe, where such debates are still uncommon. We test the empirical support for two equity considerations: age and severity operationalized as proportional shortfall (PS), and propose a pragmatic framework for combining equity considerations with the monetary value of health into a single threshold.

We used the contingent valuation method to elicit the willingness to pay per Quality-Adjusted Life Year (QALY) in Croatia, using a representative sample of the population (N = 1,500, online survey). 29 EQ-5D health states were valued using payment scales and open-ended question as payment vehicles. To test the hypotheses, we used both parametric tests and non-parametric tests. Multilinear regression was employed to test the theoretical validity of the results.

The monetary value of a health gain in Croatia is equivalent to 1.15 of GDP per capita (equaling €17,000). Age of patients seems to be an important equity-related characteristic. The WTP per QALY in the age-neutral risk group (€11,900) was nearly equivalent to the WTP per QALY in the adult (neutral) risk group (€11,700) but lower by 16% compared to the WTP per QALY estimated in children (€14,200; p = 0.00). WTP estimates are theoretically valid and to, a small degree, scale sensitive. There is a positive association between the level of proportional shortfall and willingness to pay. To increase the usefulness of our results for the policy-makers, we combine the elicited preferences into a single decision-making framework and construct several cost-effectiveness thresholds based on willingness to pay and equity-related preferences. Based on empirical results, cost-effectiveness thresholds could range up to €20,308 for the most severe health conditions in children or could be lowered to €16,777 for less severe health conditions.

In Central and Eastern Europe, in spite of a growing understanding of the importance of further developing value-based assessment frameworks there has been very little empirical research to guide, inform and promote this development. Countries in this region use mainly GDP-based thresholds without empirical evidence to support such important decisions. This may lead to thresholds that are too high, with detrimental consequence for the pricing and reimbursement systems.