Deriving welfare measures from stated preference discrete choice modelling experiments, CHERE Discussion Paper No 48

The use of Stated Preference Discrete Choice Modelling (SPDCM) is gaining currency in the health economics field as a method of eliciting: preferences for goods and services; the rate at which individuals are prepared to trade off different attributes of a good or service; and the willingness to pay for goods and services. The purpose of this paper is to develop welfare measures from SPDCM data that are consistent with microeconomic welfare theory. The theory of welfare measurement using discrete data and links to the more well known literature using continuous data are presented. The estimation of welfare measures obtained from SPDCM and conjoint analysis experiments reported in the health economics literature to date are discussed, focusing on whether commonly adopted measures are consistent with microeconomic welfare theory. Finally, the Hicksian compensating variation is calculated from discrete data collected from a SPDCM experiment designed to elicit patient preferences for preventive asthma medications.Discrete Choice Modelling, conjoint analysis

Choice experiments in health: The good, the bad, the ugly and toward a brighter future

Compared to many applied areas of economics, health economics has a strong tradition in eliciting and using stated preferences (SP) in policy analysis. Discrete choice experiments (DCEs) are one SP method increasingly used in this area. Literature on DCEs in health and more generally has grown rapidly since the mid-1990s. Applications of DCEs in health have come a long way, but to date few have been 'best practice', in part because 'best practice' has been somewhat of a moving target. The purpose of this paper is to briefly survey the history of DCEs and the state of current knowledge, identify and discuss knowledge gaps, and suggest potentially fruitful areas for future research to fill such gaps with the aim of moving the application of DCEs in health economics closer to best practice. © Cambridge University Press 2009

Attributes and weights in health care priority setting: a systematic review of what counts and to what extent

In most societies resources are insufficient to provide everyone with all the health care they want. In practice, this means that some people are given priority over others. On what basis should priority be given? In this paper we are interested in the general public's views on this question. We set out to synthesis what the literature has found as a whole regarding which attributes or factors the general public think should count in priority setting and what weight they should receive. A systematic review was undertaken (in August 2014) to address these questions based on empirical studies that elicited stated preferences from the general public. Sixty four studies, applying eight methods, spanning five continents met the inclusion criteria. Discrete Choice Experiment (DCE) and Person Trade-off (PTO) were the most popular standard methods for preference elicitation, but only 34% of all studies calculated distributional weights, mainly using PTO. While there is heterogeneity, results suggest the young are favoured over the old, the more severely ill are favoured over the less severely ill, and people with self-induced illness or high socioeconomic status tend to receive lower priority. In those studies that considered health gain, larger gain is universally preferred, but at a diminishing rate. Evidence from the small number of studies that explored preferences over different components of health gain suggests life extension is favoured over quality of life enhancement; however this may be reversed at the end of life. The majority of studies that investigated end of life care found weak/no support for providing a premium for such care. The review highlights considerable heterogeneity in both methods and results. Further methodological work is needed to achieve the goal of deriving robust distributional weights for use in health care priority setting.12 page(s

Diaries or questionnaires for collecting self-reported healthcare utilisation and patient cost data? CHERE Project Report No 20

The literature comparing diaries and questionnaires was reviewed in order to identify the most appropriate method of collecting patient self-reported data, on health service utilisation and out-ofpocket costs, for a longitudinal study. Nine published studies met the review inclusion criteria; four compared the diary method with a self-completed questionnaire and five with an interviewer administered questionnaire. None of the eligible studies measured patient costs, and only two measured some aspects of health service utilisation. Most of the studies reported higher response rates for questionnaires than for diaries, and there was some evidence of selection bias. There was a tendency to report more symptoms, symptom intensity or health care utilisation by questionnaires compared to diaries, and compared to physician reports (included in only two studies). The review provides some information about the two approaches for collecting self-reported data, but does not provide sufficient evidence to favour either approach.diaries, health care utilisation

The relative value of different QALY types

The oft-applied assumption in the use of Quality Adjusted Life Years (QALYs) in economic evaluation, that all QALYs are valued equally, has been questioned from the outset. The literature has focused on differential values of a QALY based on equity considerations such as the characteristics of the beneficiaries of the QALYs. However, a key characteristic which may affect the value of a QALY is the type of QALY itself. QALY gains can be generated purely by gains in survival, purely by improvements in quality of life, or by changes in both. Using a discrete choice experiment and a new methodological approach to the derivation of relative weights, we undertake the first direct and systematic exploration of the relative weight accorded different QALY types and do so in the presence of equity considerations; age and severity. Results provide new evidence against the normative starting point that all QALYs are valued equally.This study was funded by an Australian National Health and Medical Research Council project grant APP1047788

New South Wales drug court evaluation: Cost-effectiveness, CHERE Project Report 17a

In this report we examine an issue central to the creation of the NSW Drug Court: namely its cost-effectiveness, compared with conventional sanctions, in reducing drug-related crime. We were particularly fortunate in undertaking this evaluation, to receive the support and cooperation of the Drug Court and the Attorney General in evaluating the Drug Court using a randomised controlled trial. Randomised controlled trials, in which individuals are randomly allocated to ?treatment? and ?control? groups are recognised as being the ?gold standard? when it comes to outcome evaluation. They provide more assurance of control over extraneous factors which might otherwise bias an evaluation than any other form of research design. To our knowledge, this is the first occasion on which a criminal justice program in Australia has been evaluated using a randomised control design. The evaluation is a first in one other way as well. Very few evaluations of criminal justice or crime prevention programs (either in Australia or overseas) pay much heed to the cost of the program. This greatly hampers the capacity of Government to make rational decisions about the allocation of scarce resources across competing programs. Of course, decisions on programs which affect the liberty of citizens cannot, and should not, be made on the grounds of cost-effectiveness alone. Nevertheless it is to be hoped that our efforts will convince others of the feasibility and value of introducing cost-effectiveness analyses into criminal justice evaluation.Economic evaluation, treatment programs

Modelling online job search and choices of dentists in the Australian job market:Staged sequential DCEs and FIML econometric methods

Workforce participation decisions involve multiple stages: search, screening and offer evaluation. Standard econometric practice focusses on these stages in isolation. We conceptualize the focal behaviours as separate sequential decision stages, and provide a stated preference measurement framework for online job search and choice with a behaviourally consistent modelling approach. We demonstrate this approach in an empirical application of 275 dentists who completed an online survey including two Discrete Choice Experiments: the first mimicked an online job search site in which dentists decided which jobs they would apply to and the second presented dentists with a job offer which they accepted or rejected. Modelling these tasks requires a two-stage econometric model that incorporates the likelihood of application (first stage) into the job offer choice (second stage). The model detects differences in preferences (hence behaviours) across stages, facilitating the differentiation of policy aimed at search and job choice behaviours. Job screening occurs during search and the marginal propensity to apply for a job-type differs from the offer stage. We suggest that the approach presented provides a valuable way to investigate how dentists particularly, and perhaps the health workforce more generally, respond at different stages of workforce participation decisions and discuss practical implications

Sources of variation in the costs of health care for asthma patients in Australia

Objectives: Individuals with chronic conditions, such as asthma, on average incur high health care costs, though good control can reduce costs and improve health outcomes. However, there may be substantial variation between patients in their use of services and therefore costs. Our objective was to investigate the sources of such variation in health system and out-of-pocket costs for people with asthma. Methods: A longitudinal observational study of 252 people with asthma in New SouthWales, Australia, followed for three years, using six-monthly postal surveys and individual administrative data. Factors associated with costs were investigated using generalized linear mixed models. Results: There was substantial variability in costs between individuals but relatively little within-person change over time for the majority. Costs to the health system and out-of-pocket costs were higher with increasing asthma-related health problems and increasing age. Health system costs were less for patients living outside the state capital (Sydney) and for those in the middle income group relative to high and low income groups. Conclusions: Those with poorly-controlled asthma and the elderly require more carefully targeted strategies to improve their health and ensure appropriate use of resources. Access to appropriate services for those living outside of major cities should be improved. Co-payments for the middle-income groups and those living outside major cities should be reduced to improve equity in the use of services. © The Royal Society of Medicine Press Ltd 2009

The effect of sugar-sweetened beverage price increases and educational messages on beverage purchasing behavior among adults

There is a paucity of evidence regarding the impact of sugar sweetened beverage (SSB) price increases on beverage consumption, using individual-level data, for the population overall and for different socioeconomic groups. This study aimed to predict the impact of altered beverage prices and educational messages on consumer purchasing behavior. 2020 adults representative of the Australian population by age, gender and income completed a discrete choice experiment online in 2016. Each subject completed 20 choice scenarios in a hypothetical convenience store setting where subjects chose between seven SSB and non-SSB beverage options or a no beverage option. Beverage prices and volumes varied between scenarios. Half of participants (n = 1012) were randomly exposed to an educational poster discouraging SSB consumption prior to completing choice scenarios. We used discrete choice models to predict purchases under several policy proposals, overall and for income and SSB consumption frequency sub-groups. Compared to baseline prices, a 10% SSB price increase was predicted to reduce SSB purchases by 15.0% [95%CI -15.2, -14.7], and increase purchases of non-SSBs by +11.0% [95%CI 10.8, 11.2] and no beverage by +15.5% [95%CI 15.1, 15.9]. Effects were greater with a 20% SSB price increase. Across all policy scenarios, the highest income quintile had a similar absolute and slightly greater relative decrease in SSB purchases compared to the lowest quintile. Educational poster exposure reduced SSB choice for all groups, with a greater reduction in the lower compared to higher income group, and additively increased response to price changes. Our results support the use of population-wide SSB pricing and educational interventions to reduce demand across all income groups.This research was funded by a Monash University Faculty of Businessand Economics Interdisciplinary Grant. MB is supported by an AustralianGovernment Research Training Program Scholarship and a MonashUniversity Departmental Scholarship. KB is supported by a post-doctoralfellowship from the National Heart Foundation of Australia (grant numberPH 12 M 6824). AP is supported by a National Health and Medical ResearchCouncil (NHMRC) fellowship. EL is supported by an Australian ResearchCouncil (ARC) fellowship (grant number DE140101260

Cost-effectiveness analysis of the New South Wales adult drug court program

In New South Wales, Australia, a cost-effectiveness evaluation was conducted of an adult drug court (ADC) program as an alternative to jail for criminal offenders addicted to illicit drugs. This article describes the program, the cost-effectiveness analysis, and the results. The results of this study reveal that, for the 23-month period of the evaluation, the ADC was as cost-effective as were conventional sanctions in delaying the time to the first offense and more cost-effective in reducing the frequency of offending for those outcome measures selected. Although the evaluation was conducted using the traditional steps of a cost-effectiveness analysis, because of the complexity of the program and data limitations it was not always possible to adhere to textbook procedures. As such, each step involved in undertaking the cost-effectiveness analysis is discussed, highlighting the key issues faced in the evaluation. © 2004 Sage Publications