Other Patient-Level Economic Other Patient-Level Economic OutcomesOutcomes

Todd Wagner, PhDTodd Wagner, PhD

August 8August 8thth, 2007, 2007

Outline of TalkOutline of Talk

Willingness to payWillingness to pay

Employment and (lost) productivityEmployment and (lost) productivity

Economic TheoryEconomic Theory A person’s happiness is dependent on:A person’s happiness is dependent on:

– her consumption of non-health goods (X)her consumption of non-health goods (X)– her health (H)her health (H)– where consumption is limited by income and time (Y)where consumption is limited by income and time (Y)

Without mammogram: V(Y,PWithout mammogram: V(Y,Pxx,H),H) Getting a mammogram costs time and moneyGetting a mammogram costs time and money Trade off for a mammogram -- WTPTrade off for a mammogram -- WTP

V(Y,PV(Y,Pxx,H) = V(Y-WTP,H) = V(Y-WTPmammam,P,Pxx,H),H)

Revealed PreferencesRevealed Preferences Analyses of consumption data provide Analyses of consumption data provide

information on “revealed preferences”information on “revealed preferences” For example, consumers show a For example, consumers show a

preference for iPods over other MP3 preference for iPods over other MP3 playersplayers

Economists can use this information to Economists can use this information to estimate social welfare in a cost-benefit estimate social welfare in a cost-benefit analysisanalysis

Contingent ValuationContingent Valuation Hard to observe revealed preferences in Hard to observe revealed preferences in

health care because of market distortions.health care because of market distortions.– Exceptions for travel costs

Clarke, P. M. (1998). JHE, 17(6), 767-787. Kessler, D. (2005) NBER Working Paper 11419

If preferences are not observable, perhaps they can they be elicited – Contingent valuation

Willingness to PayWillingness to Pay

WTPWTPcvcv can be used as an alternative to can be used as an alternative to utility and QALYsutility and QALYs

Hereafter I use WTP to refer to WTPHereafter I use WTP to refer to WTPcvcv

WTP can be used in a cost-benefit WTP can be used in a cost-benefit analysis or as preference measureanalysis or as preference measure

OverviewOverview

“What would I be willing to pay to avoid ‘x’ or gain ‘y’?”

Academic research roots in environmental economics

Also used in marketing

Benefits of WTPBenefits of WTP People understand the concept People understand the concept Explicit tradeoffExplicit tradeoff Adheres to neoclassical economic theoryAdheres to neoclassical economic theory Many people pay for health careMany people pay for health care Dollar an easy to understand unit as opposed Dollar an easy to understand unit as opposed

to risksto risks May be responsive to small effect not detected May be responsive to small effect not detected

with utilitieswith utilities

Drawbacks of WTPDrawbacks of WTP

Insurance obscures charges and reduces riskInsurance obscures charges and reduces risk Correlation with income makes many Correlation with income makes many

practitioners uncomfortablepractitioners uncomfortable Validity is extremely dependent on framing of Validity is extremely dependent on framing of

question and response scalequestion and response scale Vulnerable to social desirabilityVulnerable to social desirability

– No limit on willing to pay No limit on willing to pay – Never willing to payNever willing to pay

What to AskWhat to Ask

User based ex-post vs. insurance based ex-anteUser based ex-post vs. insurance based ex-ante Who pays: public versus privateWho pays: public versus private Results: certainty or uncertainResults: certainty or uncertain

FramingFraming– Realism of taskRealism of task– Extent of descriptionExtent of description

Who to AskWho to Ask

Everybody that could potentially benefit

Only those that directly benefit

Mode of AdministrationMode of Administration In person interviewing In person interviewing

– can positively bias responses through social can positively bias responses through social desirabilitydesirability

– Allows for probes and potentially greater Allows for probes and potentially greater accuracyaccuracy

Paper and web surveysPaper and web surveys– May avoid social desirabilityMay avoid social desirability– Any confusion may not be resolvedAny confusion may not be resolved

Response CategoriesResponse CategoriesPreferred

– Payment cards/scales Maximum amount is WTP This method biases estimates of variation

– Dichotomous response Randomly assign price, person asked yes or no Requires large sample WTP is estimated in a maximum likelihood logit model

Avoid– Open ended– Bidding games

NOAA. (1992). Report of the National Oceanic and Atmospheric Administration. Federal Registry, 58(10), 4601-4614.

Question DevelopmentQuestion Development WTP question must be tailored for each studyWTP question must be tailored for each study No standard WTP questionNo standard WTP question Pre-testing is highly recommendedPre-testing is highly recommended

– Dillman methodDillman method– Modify the questionModify the question– Identify the response scale rangeIdentify the response scale range

Assess validity– Correleted with income– Scope: WTP should vary by scope of benefits

Dillman, D. (2000). Mail and Internet Surveys: The Tailored Design Method (Second ed.). New York: JohnWiley and Sons, Inc.

ExampleExample

Pathfinders: NCI funded behavioral intervention that sought to improve cancer screening among ethnically diverse women

in the SF. Bay Area.

Focus GroupsFocus Groups Conducted focus groups and individual interviews

with low income women representing five race / ethnic groups (African American, Chinese, Filipino, Latino, and white) and four languages (English, Chinese, Spanish and Tagalog).

Focus group facilitators were women of approximately the same age and same race/ethnicity

All focus groups were tape recorded with consent

Question DevelopmentQuestion Development

Discussed use of mammography, paying for health care

Showed example WTP questions and had them discuss them

Identified range of WTP responsesIdentified range of WTP responses Forward and back translation into non-Forward and back translation into non-

English languagesEnglish languages

WTP QuestionWTP Question

The next questions ask how important you think mammograms are. I am The next questions ask how important you think mammograms are. I am going to ask how much you would be willing to pay to get a mammogram. going to ask how much you would be willing to pay to get a mammogram. Please be assured that answering these questions will not increase the cost of Please be assured that answering these questions will not increase the cost of any medical services. Your answer simply tells us what the mammogram is any medical services. Your answer simply tells us what the mammogram is worthworth to you in dollars. Okay, here are the questions. to you in dollars. Okay, here are the questions.

1. Many women get mammograms free of charge. But suppose that there was 1. Many women get mammograms free of charge. But suppose that there was no way to get a free mammogram. Would you get a mammogram if it cost no way to get a free mammogram. Would you get a mammogram if it cost $75?$75?

(PROBE):(PROBE): Considering what you Considering what you can afford right nowcan afford right now, would you be willing , would you be willing to payto pay $75 $75 for a mammogram? for a mammogram?

Question ValidationQuestion Validation

The validity was tested with a random sample of 52 low-income, ethnically diverse women in the San Francisco area.

Internal validity– correlation with income Construct validity– correlation with past

behaviors

Wagner, T. H., Hu, T.-w., Dueñas, G. V., & Pasick, R. J. (2000). Willingness to pay for mammography: item development and testing among five ethnic groups. Health Policy, 53(2), 105-121.

Pathfinders InterventionPathfinders Intervention

Enrolled 1463 womenEnrolled 1463 women Collected baseline data, including WTPCollected baseline data, including WTP Randomized to educational intervention Randomized to educational intervention

and control (usual care)and control (usual care) 24 month follow-up24 month follow-up

Baseline dataBaseline data

1419 respondents as of early-April 20001419 respondents as of early-April 2000

final ethnicity | Freq. Percent-----------------------+-----------------------Black/African American | 499 35.17 Chinese | 181 12.76 Filipina | 142 10.01 Latina | 297 20.93 White | 300 21.14-----------------------+----------------------- Total | 1419 100.00

Wagner, T. H., Hu, T.-w., Dueñas, G. V., Kaplan, C. P., Pasick, R. J., & Nguyen, B. H. (2001). Does willingness to pay vary by race/ethnicity? An analysis of mammography among low-income women. Health Policy, 58, 275-288.

Sample CharacteristicsSample Characteristics Survey in English 996 (70%) Survey in English 996 (70%) 39% of sample was foreign born 39% of sample was foreign born Proportion of life in USProportion of life in US

– Black/African American 0.99Black/African American 0.99– Chinese 0.33 Chinese 0.33 – Filipina 0.40 Filipina 0.40 – Latina 0.52Latina 0.52– White 0.97White 0.97

Baseline characteristics (cont.)Baseline characteristics (cont.) 1.14% had never heard of mammogram1.14% had never heard of mammogram 87% had a mammogram in their lifetime87% had a mammogram in their lifetime 83% had mammogram in last 5 years83% had mammogram in last 5 years Stages of changeStages of change

– precontemplation 5%precontemplation 5%

– contemplation 30%contemplation 30%

– action 12%action 12%

– maintenance 38%maintenance 38%

– relapse 14%relapse 14%

WTPWTP Average WTP $131 (SD 92; Range 0-500)Average WTP $131 (SD 92; Range 0-500)

wtp

-.065734.065734

0

130

500

ethn: Black/African American

-.06445.06445

0

75

500

ethn: Chinese

-.069484.069484

0

100

500

ethn: Filipina

-.068198.068198

0

100

500

ethn: Latina

-.05359.05359

0

130

500

ethn: White

p<.0001

WTP by stages of changeWTP by stages of changewtp

-.068524.068524

0

75

500

stage: precont

-.061237.061237

0

100

500

stage: contem

-.057168.057168

0

125

500

stage: action

-.0621 .0621

0

130

500

stage: maint

-.063448.063448

0

100

500

stage: relap p<.0001

Mother, daughter or sister with breast cancerMother, daughter or sister with breast cancer

141

128

122

133

110

115

120

125

130

135

140

145

Chinese, Filipina,White

AA / Latina

YesNo

Thistles and ThornsThistles and Thorns

Refused to answer 4 (0.3%)Refused to answer 4 (0.3%) Don’t know 26 (1.8%)Don’t know 26 (1.8%) No limit 95 (6.7%)No limit 95 (6.7%) Pay nothing 55 (3.9%)Pay nothing 55 (3.9%)

WTP and CBAWTP and CBA Cost benefit analysis compares costs to Cost benefit analysis compares costs to

monetized monetized benefitsbenefits CEA exists because people prefer CEA exists because people prefer

QALYs over QALYs over monetized monetized benefitsbenefits WTP is a measure of monetized benefitsWTP is a measure of monetized benefits Net benefit=WTP-CostsNet benefit=WTP-Costs Objective function: net benefit >0Objective function: net benefit >0

Employment OutcomesEmployment Outcomes

EmploymentEmployment Employment outcomes are typically excluded Employment outcomes are typically excluded

from a CEA because these effects are included from a CEA because these effects are included in the denominator (QALYs).in the denominator (QALYs).

However, employment may be an important However, employment may be an important outcome in its own right oroutcome in its own right or

CEA may be using another outcome that does CEA may be using another outcome that does not reflect employment (e.g., mortality)not reflect employment (e.g., mortality)

Typical (Bad) QuestionsTypical (Bad) Questions Are you currently working at a paying job?Are you currently working at a paying job?

□□ Full time Full time □□ Part time Part time □□ Not workingNot working

Please check one of the followingPlease check one of the following□□ working full time working full time □□ working part timeworking part time□□ homemakerhomemaker□□ studentstudent□□ unemployedunemployed□□ retiredretired

BLS on Being EmployedBLS on Being Employed Persons 16 years and over in the civilian noninstitutional Persons 16 years and over in the civilian noninstitutional

population who, during the reference week, (a) did any work population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working member of the family; and (b) all those who were not working but who had jobs or businesses from which they were but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were reasons, whether or not they were paid for the time off or were seeking other jobs. Excluded are persons whose only activity seeking other jobs. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, or own home housework) or volunteer work for religious, charitable, and other organizations. charitable, and other organizations.

UnemployedUnemployed Persons aged 16 years and older who had no Persons aged 16 years and older who had no

employment during the reference week, employment during the reference week, were were available for workavailable for work, except for temporary , except for temporary illness, illness, and had made specific efforts to find and had made specific efforts to find employment sometime during the 4-week employment sometime during the 4-week period ending with the reference weekperiod ending with the reference week. . Persons who were waiting to be recalled to a Persons who were waiting to be recalled to a job from which they had been laid off need not job from which they had been laid off need not have been looking for work to be classified as have been looking for work to be classified as unemployed. unemployed.

Out of Labor ForceOut of Labor Force

People who are not employed and not People who are not employed and not actively lookingactively looking

Class ExerciseClass Exercise

For employment status, how does BLS For employment status, how does BLS classify:classify:– military personnelmilitary personnel

– veteransveterans

– prison inmatesprison inmates

Measuring EmploymentMeasuring Employment Paid employmentPaid employment Employer (self or company)Employer (self or company) Hours of employmentHours of employment Productivity / lost productivityProductivity / lost productivity Absenteeism / presenteeismAbsenteeism / presenteeism Income / assetsIncome / assets Occupation (typically of little value)Occupation (typically of little value)

Employment MattersEmployment Matters

Diseases can affect overall employmentDiseases can affect overall employment– DepressionDepression– Arthritis– Stroke– Back pain

Diseases can affect willingness to start own company– Depression

ProductivityProductivity Many illnesses can affect productivity Many illnesses can affect productivity

and absenteeismand absenteeism– MigraineMigraine– IncontinenceIncontinence– UlcersUlcers– DepressionDepression– Substance UseSubstance Use– Back painBack pain

QuestionnairesQuestionnaires No gold standard exists for employment, No gold standard exists for employment,

assets, and incomeassets, and income Many people use questions from national Many people use questions from national

surveyssurveys PSID (Panel Study of Income Dynamics)PSID (Panel Study of Income Dynamics) AHEAD (Asset and Health Dynamics Among the AHEAD (Asset and Health Dynamics Among the

Oldest Old) Oldest Old) HRS (Health and Retirement Survey)HRS (Health and Retirement Survey) Bureau of Labor Statistics (www.bls.gov/ers/home.htm)Bureau of Labor Statistics (www.bls.gov/ers/home.htm)

Two measures of lost productivityTwo measures of lost productivity

Example of Tailored QuestionsExample of Tailored Questions

Partners in Care (depression)Partners in Care (depression)http://www.rand.org/health/projects/pic/measures/tcimeasure/cidi-tci.htmlhttp://www.rand.org/health/projects/pic/measures/tcimeasure/cidi-tci.html

23 pages of detailed questions on assets, 23 pages of detailed questions on assets, income, wealth for respondent and income, wealth for respondent and family.family.

Based on Health and Retirement Survey.Based on Health and Retirement Survey.

Heath and Work Performance Questionnaire (HPQ)

http://www.hcp.med.harvard.edu/hpq/http://www.hcp.med.harvard.edu/hpq/

How many hours does your employer expect you to work in a typical 7-day week?

In the past 4 weeks (28 days), how many days did you...– ...miss an entire work day because of problems with your

physical or mental health?– ...miss part of a work day because of problems with your

physical or mental health? (Please include only days missed for your own health, not someone else’s health.)

Work and Health InterviewWork and Health Interview In the past 4 weeks, how many In the past 4 weeks, how many hours per weekhours per week, on average, , on average,

did you work? did you work? ______________# of hours ______________# of hours

In the past 4 weeks, how many total, full In the past 4 weeks, how many total, full daysdays of work did you of work did you missmiss for health reasons? These would be days you did not go for health reasons? These would be days you did not go to work at all.to work at all. ______________# days______________# days

For a number of reasons (illnesses, poor concentration, For a number of reasons (illnesses, poor concentration, fatigue) people are not as productive as they can be at work all fatigue) people are not as productive as they can be at work all the time. In the past 4 weeks, how many the time. In the past 4 weeks, how many hours per weekhours per week, on , on average, were you average, were you notnot productiveproductive??

______________# of hours ______________# of hours

Note: wording from earlier version and it may have changedNote: wording from earlier version and it may have changedStewart et al. Lost Productive Time Due to Common Pain… JAMA 2003Stewart et al. Lost Productive Time Due to Common Pain… JAMA 2003

Barriers to Measuring EmploymentBarriers to Measuring Employment People who receive public benefits face a People who receive public benefits face a

disincentive to workdisincentive to work– Income from work must outweigh benefitsIncome from work must outweigh benefits– Incentives to work “under the table”Incentives to work “under the table”– Incentives to bill year’s work in a month or twoIncentives to bill year’s work in a month or two

These “perverse” incentives lead Congress to These “perverse” incentives lead Congress to enact the 1996 welfare reformsenact the 1996 welfare reforms

Veterans who receive means-tested public Veterans who receive means-tested public benefits also face a disincentivebenefits also face a disincentive

Other ProblemsOther Problems

For an outcome measure, avoid using labeled For an outcome measure, avoid using labeled categories (e.g., full time or part time)categories (e.g., full time or part time)

Measure hours of workMeasure hours of work Other issues to considerOther issues to consider

– UnionsUnions– Worksite health programsWorksite health programs– ChildcareChildcare– Health of family membersHealth of family members