# Presentation: 046598

## Other Patient-Level Economic Outcomes

- Todd Wagner, PhD
- August 8th, 2007

## Outline of Talk

- Willingness to pay
- Employment and (lost) productivity

## Economic Theory

- A person’s happiness is dependent on:
- her consumption of non-health goods (X)
- her health (H)
- where consumption is limited by income and time (Y)
- Without mammogram: V(Y,Px,H)
- Getting a mammogram costs time and money
- Trade off for a mammogram -- WTP
- V(Y,Px,H) = V(Y-WTPmam,Px,H)

## Revealed Preferences

- Analyses of consumption data provide information on “revealed preferences”
- For example, consumers show a preference for iPods over other MP3 players
- Economists can use this information to estimate social welfare in a cost-benefit analysis

## Contingent Valuation

- Hard to observe revealed preferences in 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 Pay

- WTPcv can be used as an alternative to utility and QALYs
- Hereafter I use WTP to refer to WTPcv
- WTP can be used in a cost-benefit analysis or as preference measure

## Overview

- “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 WTP

- People understand the concept
- Explicit tradeoff
- Adheres to neoclassical economic theory
- Many people pay for health care
- Dollar an easy to understand unit as opposed to risks
- May be responsive to small effect not detected with utilities

## Drawbacks of WTP

- Insurance obscures charges and reduces risk
- Correlation with income makes many practitioners uncomfortable
- Validity is extremely dependent on framing of question and response scale
- Vulnerable to social desirability
- No limit on willing to pay
- Never willing to pay

## What to Ask

- User based ex-post vs. insurance based ex-ante
- Who pays: public versus private
- Results: certainty or uncertain
- Framing
- Realism of task
- Extent of description

## Who to Ask

- Everybody that could potentially benefit
- Only those that directly benefit

## Mode of Administration

- In person interviewing
- can positively bias responses through social desirability
- Allows for probes and potentially greater accuracy
- Paper and web surveys
- May avoid social desirability
- Any confusion may not be resolved

## Response Categories

- Preferred
- 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 Development

- WTP question must be tailored for each study
- No standard WTP question
- Pre-testing is highly recommended
- Dillman method
- Modify the question
- Identify 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: John
- Wiley and Sons, Inc.

## Example

- Pathfinders: NCI funded behavioral intervention that sought to improve cancer screening among ethnically diverse women in the SF. Bay Area.

## Focus 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 Development

- Discussed use of mammography, paying for health care
- Showed example WTP questions and had them discuss them
- Identified range of WTP responses
- Forward and back translation into non-English languages

## WTP Question

- 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.  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 _worth_ to you in dollars.  Okay, here are the questions.
- 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 $75?
**(PROBE):** Considering what you _can afford right now_, would you be willing to pay** $75** for a mammogram?

## Question 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 Intervention

- Enrolled 1463 women
- Collected baseline data, including WTP
- Randomized to educational intervention and control (usual care)
- 24 month follow-up

## Baseline data

- 1419 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 Characteristics

- Survey in English 996 (70%)
- 39% of sample was foreign born
- Proportion of life in US
- Black/African American 0.99
- Chinese 0.33
- Filipina 0.40
- Latina  0.52
- White 0.97

## Baseline characteristics (cont.)

- 1.14% had never heard of mammogram
- 87% had a mammogram in their lifetime
- 83% had mammogram in last 5 years
- Stages of change
- precontemplation 5%
- contemplation 30%
- action 12%
- maintenance 38%
- relapse 14%

## WTP

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

- p<.0001

## WTP by stages of change

- p<.0001

## Mother, daughter or sister with breast cancer

## Thistles and Thorns

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

## WTP and CBA

- Cost benefit analysis compares costs to *monetized *benefits
- CEA exists because people prefer QALYs over *monetized *benefits
- WTP is a measure of monetized benefits
- Net benefit=WTP-Costs
- Objective function: net benefit >0

## Employment Outcomes

## Employment

- Employment outcomes are typically excluded from a CEA because these effects are included in the denominator (QALYs).
- However, employment may be an important outcome in its own right or
- CEA may be using another outcome that does not reflect employment (e.g., mortality)

## Typical (Bad) Questions

- Are you currently working at a paying job?
- □  Full time
- □  Part time
- □  Not working
- Please check one of the following
- □ working full time
- □ working part time
- □ homemaker
- □ student
- □ unemployed
- □ retired

## BLS on Being Employed

- Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.

## Unemployed

- Persons aged 16 years and older who had no employment during the reference week, _were available for work_, except for temporary illness, _and had made specific efforts to find employment sometime during the 4-week period ending with the reference week_. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

## Out of Labor Force

- People who are not employed and not actively looking

## Class Exercise

- For employment status, how does BLS classify:
- military personnel
- veterans
- prison inmates

## Measuring Employment

- Paid employment
- Employer (self or company)
- Hours of employment
- Productivity / lost productivity
- Absenteeism / presenteeism
- Income / assets
- Occupation (typically of little value)

## Employment Matters

- Diseases can affect overall employment
- Depression
- Arthritis
- Stroke
- Back pain
- Diseases can affect willingness to start own company
- Depression

## Productivity

- Many illnesses can affect productivity and absenteeism
- Migraine
- Incontinence
- Ulcers
- Depression
- Substance Use
- Back pain

## Questionnaires

- No gold standard exists for employment, assets, and income
- Many people use questions from national surveys
- PSID (Panel Study of Income Dynamics)
- AHEAD (Asset and Health Dynamics Among the Oldest Old)
- HRS (Health and Retirement Survey)
- Bureau of Labor Statistics (www.bls.gov/ers/home.htm)
- Two measures of lost productivity

## Example of Tailored Questions

- Partners in Care (depression)
- _[http://www.rand.org/health/projects/pic/measures/tcimeasure/cidi-tci.html](http://www.rand.org/health/projects/pic/measures/tcimeasure/cidi-tci.html)_
- 23 pages of detailed questions on assets, income, wealth for respondent and family.
- 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 Interview

- In the past 4 weeks, how many **hours per week**, on average, did you work?    	______________# of hours
- In the past 4 weeks, how many total, full **days** of work did you _miss_ for health reasons? These would be days you did not go to work at all.	______________# days
- For a number of reasons (illnesses, poor concentration, fatigue) people are not as productive as they can be at work all the time. In the past 4 weeks, how many **hours per week**, on average, were you **not** **productive**?
- 				______________# of hours

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

## Barriers to Measuring Employment

- People who receive public benefits face a disincentive to work
- Income from work must outweigh benefits
- Incentives to work “under the table”
- Incentives to bill year’s work in a month or two
- These “perverse” incentives lead Congress to enact the 1996 welfare reforms
- Veterans who receive means-tested public benefits also face a disincentive

## Other Problems

- For an outcome measure, avoid using labeled categories (e.g., full time or part time)
- Measure hours of work
- Other issues to consider
- Unions
- Worksite health programs
- Childcare
- Health of family members