Estimating the monetary value of health and capability well‑being applying the well‑being valuation approach

Background

Quality of life measures going beyond health, like the ICECAP-A, are gaining importance in health technology
assessment. The assessment of the monetary value of gains in this broader quality of life is needed to use these measurements
in a cost-effectiveness framework.

Methods

We applied the well-being valuation approach to calculate a first monetary value for capability well-being in
comparison to health, derived by ICECAP-A and EQ-5D-5L, respectively. Data from an online survey administered in
February 2018 to a representative sample of UK citizens aged 18–65 was used (N = 1512). To overcome the endogeneity
of income, we applied an instrumental variable regression. Several alternative model specifications were calculated to test
the robustness of the results.

Results

The base case empirical estimate for the implied monetary value of a year in full capability well-being was £66,597.
The estimate of the monetary value of a QALY, obtained from the same sample and using the same methodology amounted
to £30,786, which compares well to previous estimates from the willingness to pay literature. Throughout the conducted
robustness checks, the value of capability well-being was found to be between 1.7 and 2.6 times larger than the value of health.

Conclusion

While the applied approach is not without limitations, the generated insights, especially concerning the relative
magnitude of valuations, may be useful for decision-makers having to decide based on economic evaluations using the
ICECAP-A measure or, to a lesser extent, other (capability) well-being outcome measures.