The Feasibility of Willingness-To-Pay Measurement in Health Services Research

Abstract

Societal decisionmaking can be aided by benefit-cost and cost-effectiveness analysis. These disciplines are, however, currently handicapped by their difficulties in dealing with nonmonetary effects. The consensus of current experts agrees that purely economic methods, such as the human capital approach, grievously misvalue such aspects of disease burden as pain, suffering, anxiety, depression, loss of self-esteem, reduced capacity in activities of daily living, lower satisfaction in leisure pursuits, disruption of marriage and social relationships, and dependence on friends and relatives. Expert opinion also concedes that using willingness to pay (WTP) to value nonmonetary program benefits is correct in concept but contends that it is infeasible to apply. Evidence is presented that current WTP methods are somewhat feasible. The approach of synthetic WTP - calculated using presumed utility functions - should further enhance methodological feasibility.

The opinions expressed in this article are solely those of the authors, and official endorsement by The Robert Wood Johnson Foundation is not intended and should not be inferred. Research for this paper was supported in part by the Institute for Health Research (a joint program of the Harvard Community Health Plan and Harvard University) and by grants from the Welcome Foundation and the Commonwealth Fund.