Money for health: the equivalent variation of cardiovascular diseases.
This paper introduces a new method to calculate the extent to which individuals are willing to trade money for improvements in their health status. An individual welfare function of income (WFI) is applied to calculate the equivalent income variation of health impairments. We believe that this approach avoids various drawbacks of alternative willingness-to-pay methods. The WFI is used to calculate the equivalent variation of cardiovascular diseases. It is found that for a 25 year old male the equivalent variation of a heart disease ranges from 114,000 euro to 380,000 euro depending on the welfare level. This is about 10,000 euro - 30,000 euro for an additional life year. The equivalent variation declines with age and is about the same for men and women. The estimates further vary by discount rate chosen. The estimates of the equivalent variation are generally higher than the money spent on most heart-related medical interventions per QALY. The cost-benefit analysis shows that for most interventions the value of the health benefits exceeds the costs. Heart transplants seem to be too costly and only beneficial if patients are young.
Groot
Wim
W
Department of Economics, University of Amsterdam, The Netherlands.
Van Den Brink
Henriëtte Maassen
HM
Plug
Erik
E
D000367:Age Factors; D000368:Aged; D001294:Attitude to Health; D002318:Cardiovascular Diseases / Q000191:economics / Q000401:mortality / Q000517:prevention & control; D003362:Cost-Benefit Analysis; D003430:Cross-Sectional Studies; D005260:Female; D017048:Health Care Costs / Q000706:statistics & numerical data*; D019538:Health Care Surveys; D006304:Health Status; D006801:Humans; D007182:Income / Q000706:statistics & numerical data*; D008017:Life Expectancy; D008297:Male; D008875:Middle Aged; D017059:Models, Econometric; D009426:Netherlands / Q000453:epidemiology; D018579:Patient Selection; D019057:Quality-Adjusted Life Years; D020127:Recovery of Function; D012680:Sensitivity and Specificity; D012737:Sex Factors; D011795:Surveys and Questionnaires; D026712:Value of Life