Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2016:23: Measuring the End of Life Premium in Cancer using Individual ex ante Willingness to Pay

Sara Olofsson (), Ulf-G. Gerdtham (), Lars Hultkrantz () and Ulf Persson ()
Additional contact information
Sara Olofsson: The Swedish Institute for Health Economics (IHE), Postal: Lund, Sweden
Ulf-G. Gerdtham: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Lars Hultkrantz: Örebro University, School of Business, Postal: Örebro, Sweden
Ulf Persson: The Swedish Institute for Health Economics (IHE), Postal: Lund, Sweden

Abstract: For the assessment of value of new therapies in healthcare, Health Technology Assessment (HTA) agencies often review the cost per Quality-Adjusted Life-Years (QALY) gained. Some HTAs accept a higher cost per QALY gained when treatment is aimed at prolonging survival for patients with a short expected remaining lifetime, a so called End-Of-Life (EoL) premium. The objective of this study is to elicit the existence and size of an EoL premium in cancer. Data was collected from 509 individuals in the Swedish general population 20-80 years old using a web-based questionnaire. Preferences were elicited using subjective risk estimation and the contingent valuation (CV) method. A split-sample design was applied to test for order bias. The value of a QALY at EoL in cancer was between €275,000 and €440,000, which is higher than the thresholds applied by HTAs. When expected remaining life expectancy was 6 months, the value of a QALY was 10-20 % higher compared to when remaining life expectancy was 24 months. Order of scenarios did not have a significant impact on the result and the result showed scale sensitivity. Thus this study supports an EoL premium in cancer when expected remaining lifetime is short.

Keywords: willingness to pay; value of a QALY; cancer; contingent valuation; order bias

JEL-codes: D61; D80; I18; J17

34 pages, September 23, 2016

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