Value Assessment Under Uncertainty: Measuring Insurance Value and Risk Aversion for a Novel Neurological Treatment Using a Stated Preference Survey

Speaker(s)

Shafrin J1, Than KS2, Kim J1, Fajnor J1, Mearns ES3, Kowal S4, Majda T3, Hlavka J5
1Center for Healthcare Economics and Policy, FTI Consulting, Los Angeles, CA, USA, 2Center for Healthcare Economics and Policy, FTI Consulting, Philadelphia, PA, USA, 3Genentech, Inc., South San Francisco, CA, USA, 4Genentech, Inc., Alameda, CA, USA, 5University of Southern California, Los Angeles, CA, USA

Presentation Documents

OBJECTIVES: To quantify the insurance value of a hypothetical novel neurological treatment that reduces the progression of mobility impairment and to quantify risk aversion regarding mobility-based health states.

METHODS: A survey was administered to US residents aged ≥ 21 years. A multiple random staircase design was used to elicit respondents’ willingness to pay (WTP) for coverage of a hypothetical new treatment that prevented progression of mobility impairment relative to standard of care. Insurance value was calculated as the share of the stated preference estimated value exceeding the expected quality-adjusted life-year (QALY)–based value, assuming risk neutrality (i.e. the product of annual incidence [0.076%], discounted QALYs gained [1.759] and WTP/QALY [$100,000]). To measure risk aversion, respondents were asked to (1) estimate quality of life (QOL) for four mobility health states using a visual analog scale and (2) choose between two hypothetical treatments, with probabilistically varying outcomes based on the Holt and Laury (2002) methodology. Respondents’ indifference points were inferred from survey responses and used to estimate relative risk aversion, assuming a constant relative risk aversion utility function.

RESULTS: Among 259 respondents who met all inclusion criteria, 51.0% were female, the average age was 49.3 (SD, 16.1) years, and 92.3% had health insurance. WTP for insurance coverage of a new treatment that prevents progression of mobility impairment was $671.35 per year compared with the ex ante, risk-neutral approach WTP of $133.23; this implies that 80.2% of treatment value was due to insurance value. Mean relative risk aversion was 0.680 (95% CI 0.506–0.855), suggesting diminishing marginal returns on QOL health gains.

CONCLUSIONS: Approximately 80% of the value of a treatment that improved mobility in patients with neurological conditions was due to insurance value. Individuals were risk averse regarding mobility impairment outcomes caused by neurological conditions.

Code

EE474

Topic

Economic Evaluation

Topic Subcategory

Novel & Social Elements of Value

Disease

Neurological Disorders, No Additional Disease & Conditions/Specialized Treatment Areas