PURPOSE:

To present a variety of empirical approaches for estimating risk preferences in the context of health, describe the benefits and limitations of these approaches, and discuss the implications of how risk preference estimates could inform payer decisions on reimbursement for treatments for severe disease.

DESCRIPTION:

Many novel approaches to value measurement for severe diseases rely on incorporating risk preferences. These include not only various petals of the ISPOR value flower (e.g., value of hope, insurance value) but also Generalized Risk Adjusted Cost Effectiveness (GRACE). This workshop will provide an overview of different empirical methods for estimating risk preferences through stated preference surveys, as well as a discussion of possible applications. The workshop will begin with Dr. Snider providing an overview of the economic theory of the value of health gains starting from a state of severe disease, possible implications for willingness to pay for treatments for severe disease, and some previous attempts to measure risk preferences. Next, Dr. Skedgel will provide a practical example of how to measure risk aversion based on generic quality-of-life values and how the result could inform operationalization of the GRACE model. Dr. Shafrin will extend this approach by describing how to estimate patient risk preferences while incorporating heterogeneity in patient valuations of specific health states within a disease. Dr. Shafrin will then discuss how the multiple random staircase approach could be used to quantify patient willingness to pay for generous insurance coverage of treatments for more vs. less severe disease. Finally, Dr. Snider will lead discussion with the discussants about the benefits and challenges of applying these risk-based estimates to value assessment for severe disease. Audience participation will include real-time survey to insure participants internalize the key steps for applying these risk measurement approaches empirically.