To pay or not to pay? Cost information processing in the valuation of publicly funded healthcare

Abstract

Discrete choice experiments (DCEs) commonly include a monetary attribute. This enables willingness to pay (WTP), a monetary measure of benefit, to be estimated for non-monetary attributes. There has been concern that the inclusion of a cost attribute challenges the credibility of the experiment when valuing publicly funded healthcare systems. However, very little research has explored this issue. Using a UK sample, we allocated participants across two versions of a DCE: one including a cost attribute and the other excluding a cost attribute. The DCE was identical in all other respects. We find no significant difference in response time across the two surveys, monotonicity was higher for the COST DCE and cost was stated as the most commonly ignored attribute in the COST DCE. Whilst the inclusion of a cost attribute did not alter the structure of preferences, it resulted in a lower level of choice consistency. Using an unrestricted latent class model, we find evidence of a credibility effect: respondents with experience of paying for health services and who perceive the choices as realistic are less likely to ignore cost. Further, respondents with a higher response time are less likely to be cost minimisers. Results are robust across different model specifications and choice formats. DCE practitioners should give due consideration to cost credibility when including a cost attribute, ensuring participants engage with the cost attribute. Ways to do this are suggested, including careful motivation of the cost attribute, consideration to the appropriate payment vehicle and careful consideration to the cost attribute when developing and piloting the survey. Failure to do this will result in an invalid willingness to pay estimates and thus policy recommendations.

Keywords: Cost attribute; Cost information processing; Discrete choice experiment; Multi-attribute choices; Publicly funded healthcare.