Contingent Valuation: Indiscretion in the Adoption of Discrete Choice Question Formats?

Contingent valuation (CV) refers to a hypothetical survey method of valuing the benefits of an intervention in monetary terms by estimation of the individuals maximum willingness-to-pay (WTP). Currently, an issue in the application of CV methods is the technique used to elicit this monetary valuation. Historically, the favoured technique has been the `open-ended' questionnaire, where the respondent is asked directly for their maximum WTP for the commodity being valued. However, in recent years there has been a move away from the use of this open-ended technique, towards the use of discrete choice questionnaires (also referred to variously as closed-ended, binary or dichotomous choice questionnaires; as well as referendum surveys if the median, rather than mean, WTP is the desired measure of value). In contrast to open-ended questionnaires, discrete choice questions offer the respondent a single value (bid), which they either accept or reject. By varying this single bid across various sub-samples a demand curve for the commodity is estimated, and from this the maximum WTP calculated. The basis for the use of discrete surveys in preference to open-ended seems to rest on some combination of: (i) a belief that this technique offers a more `realistic' market, and will therefore lead to more valid responses (a truer estimate of actual WTP by respondents); and (ii) the supposed tendency of discrete surveys to yield higher response rates, through reduced mental demands (especially for mailed surveys). This paper presents a review of the use of discrete versus open-ended survey techniques, and addresses these issues as well as others of importance. It is concluded that, although there are issues yet to be resolved concerning the degree of bias within the open-ended technique, there appear to be substantial additional issues with the use of discrete survey techniques. While the discrete choice questionnaire seems to have been favoured, major problems still remain in its implementation. These problems arise from the fact that, simply, discrete choice survey design and analysis is very complex. Survey design elements include total sample size, bid range, specific bid levels, allocation of the total sample among the bid levels, and form of statistical model used to analyse such data. None of these issues has by any means been clearly resolved. This author would therefore suggest that the choice of discrete versus open-ended techniques is by no means settled, and is potentially a red-herring in the search for `valid' WTP values derived from CV surveys. There appears no reason why the open-ended survey should be summarily dismissed, and research may better be targeted to refinement of the open-ended approach to reduce bias. In the meantime, it is recommended that caution be exercised in the seemingly indiscreet adoption of the discrete choice question approach

Health Promotion and the Disabled: Funding Issues

The disabled have a narrow margin of health. They are, on average, much more likely than non-disabled persons to experience a broad range of secondary disabilities, and experience disability related acute health problems including decubitus ulcers, urinary tract infections, and respiratory tract infections. It has been shown that persons with disabilities experience higher rates of hospitalisation than the general population, largely from preventable conditions, and experience difficulties in access to primary care, and other services: in particular health promoting services. However, despite the vulnerability of the disabled to these problems, and the wide window of opportunity for health promotion to reduce premature mortality, improve quality of life and lower healthcare costs associated with disability, little research has been conducted to address issues of the funding of health promotion and healthcare for these persons. These issues are of considerable importance, as it is the funding arrangements which largely determine the scope and amount of health promotion received by the disabled, how this is distributed and to whom it is distributed. This paper attempts to redress this imbalance by providing an overview of issues concerning the funding of health promotion for the disabled. Several areas are considered where improvements in funding could be achieved to reduce barriers in access to appropriate healthcare and health promotion for the disabled. From this review it is clear that there is a need to find models of the finance of care that will avert unnecessary rehospitalisation, respond to the new health needs of the disabled as they get older, offer access to timely health promotion and primary care, focus on the outcomes of health promoting activities, lead to shorter stays in hospital, develop community-based rehabilitation, and encourage the role of carers and volunteers. In the end this requires incentives for providers of care to consider the longer-term needs of the disabled, and the most promising means to achieve this restructuring of funding may be through case-management. The uncertainty surrounding the future of the current Australian healthcare system, as with systems worldwide, presents the potential for the disabled to either lose their access to health promotion and care further or to capitalise on these changes to ensure that their situation is improved. Either way it is clear that research is urgently required to address the issues raised in this paper in a timely fashion, to ensure that beneficial changes are capitalised upon and the potential for negative impacts are minimised

The Transferable Permit Market: A Solution to Antibiotic Resistance?

In a previous paper the authors argued that antibiotic resistance will be best controlled by a system of tradeable permits. It was argued that use of charges or regulation to achieve a reduction, or control, of resistance would not be efficient. Regulation will not account for different marginal costs of reducing antibiotic prescription among GPs, but charges, although based on sound economic concepts, are based on an unrealistic amount of required information. The regulatory problem is to constrain prescription to achieve a desired reduction in antibiotic resistance. However, given informational uncertainties and variance in resistance, as well as other areas important in this system, such regulation or charges will not be efficient. It was argued, therefore, that permits, by combining the targets of regulation and the market flexibility of charges, would achieve the government's objectives more efficiently than simple regulation and be more practical than simple charges. The attraction of permits is to put an effective limit on the use of antibiotics but in a flexible manner. In this paper the authors progress this proposed policy by considering various important issues which arise in attempting to design such a tradeable permit system for antibiotics. Peculiarities of such a permit system, coupled with the peculiarities of healthcare, make this a tricky market to develop. The paper is therefore not an exhaustive plan enabling a blueprint for such a market to be designed, but a proposal from which certain issues are raised, and which can be used as platform for further development of such an initiative to deal with resistance. Given the degree of uncertainty surrounding resistance patterns, however, achieving a global limit will necessarily be pretty arbitrary, but it is better than no global limit at all

GP Budget Holding for Australia: Panacea or Poison?

Australia has a lot in common with other OECD nations in its experience of health care expenditure and provision over the last decade. It has experienced many problems and concerns similar to those of other OECD nations, including upward pressure on health care costs, potential reductions in service quality and growth of waiting lists, particularly for public patients. In addition, Australia has experienced problems which might be considered unique due to its system of funding and geographical dimensions, such as the potential for cost shifting across levels of government and between public and private sectors, as well as a potential maldistribution of GPs across urban and rural areas. Whilst many nations, such as the UK and NZ, have pursued some variation of managed competition and the purchaser-provider split to address these problems, and the USA has moved down the managed care reform path, the common element has been the focus on budget holding for primary care. In contrast, Australia has been relatively unusual in not moving down a budget holding route, but has instead chosen incremental reform, such as through coordinated care, restrictions of doctor supply and the General Practice Strategy. The central issue, given this divergence of reform strategies to tackle similar problems, is to establish the likely success of each in achieving its objectives. Given the similarity of many of the core issues of concern, would we expect that the piecemeal Australian reform strategy will produce a more effective and efficient outcome than the more widescale reform of budget holding as pursued by other nations? In particular, with the introduction of the Australian coordinated care trials and the implicit budget-holding responsibilities that these imply, it is useful to examine whether wider GP budget holding for Australia would be a panacea or poison. This paper reviews the likely effectiveness and efficiency of the Australian reform strategy in light of experience and evidence of budget holding in achieving similar objectives: principally to stem upward cost pressures, reduce reliance on FFS remuneration, improve coordination of care, reduce the incentive for cost- shifting, reduce waiting lists and tackle the issue of rural-urban imbalance in distribution and access to GPs. Within each of these areas budget holding would appear to offer a more effective, or cost-effective, achievement of the desired objective than piecemeal reform; in theory at least. It is clear, however, that in practice numerous issues pertinent to the Australian context would need to be tackled, such as the requirement for enrolment, or registration, of populations with specific GPs. In conclusion, the authors recommend that budget holding for general practice be considered further as a viable, and potentially more efficient, alternative to the current piecemeal reform of the primary care sector

The Cost-Effectiveness of Home Assessment and Modification to Reduce Falls in the Elderly: A Decision-Analytic Modelling Approach

A modelling exercise was conducted to assess the cost effectiveness of home assessment and modification to reduce falls in the elderly. The model was designed to simulate the costs and consequences of a fall to the elderly over a one year period. The model was developed using the results of published studies related to falls and injuries in the elderly. The intervention was assumed to reduce the fall incidence in the intervention group. The cost effectiveness of the proposed intervention was measured in terms of incremental cost per fall prevented and injury prevented. The model predicted that the home assessment and modification to reduce fall in the elderly would incur an incremental cost $17,210 for a fall-injury prevented