PP74 Are Commonly Used Cost-Effectiveness Thresholds Too Low? Empirical Evidence From Economic Studies On The Value Of Life

Abstract

Introduction

In health technology assessment (HTA), “value for money” is frequently conceptualized as incremental cost-effectiveness (CE), with effectiveness measured as (quality-adjusted) life years gained (LYG). Commonly used CE thresholds have been subject to controversial debate. We reviewed and analyzed the worldwide economic literature on the value of a statistical life (VSL), which reported empirical estimates during the last 25 years.

Methods

We conducted an extended systematic literature search in the EconBiz and EconLit databases, spanning the period from January 1995 to December 2020. We transformed VSL data into the implied values of a statistical life year (VSLY) and analyzed the results by regional origin, elicitation method, and annual gross domestic product (GDP) per capita. Then, we performed a regression analysis using the ordinary least squares (OLS) model after log-transforming the VSLY estimates.

Results

We identified 156 empirical economic studies with 169 unique VSL estimates. Overall, the median VSLY was EUR168,367 (mean, EUR256,701) or 6.3 times annual GDP/capita. The median VSLY (expressed as multiples of GDP/capita) differed by regional origin (North America: EUR288,994; 7.2; Europe: EUR168,367, 5.2; Asia: EUR45,260, 4.5) and by elicitation method (revealed preference/wage risk studies: EUR274,625, 9.1; stated preference/contingent valuation studies: EUR113,246, 4.4; stated preference/discrete choice experiments: EUR178,130, 5.2). Regression analyses confirmed that studies with data originating from North America resulted in significantly higher VSLY estimates. The difference remained statistically significant after adjusting for GDP/capita.

Conclusions

The empirical economic literature, while showing heterogeneity by elicitation method, suggests that the adoption of a preference-based or “demand-side” perspective leads to willingness-to-pay estimates for a LYG that exceed commonly used CE thresholds in the context of HTA.