Nova workboard

a blog from young economists at Nova SBE

Status of health in Germany – Willingness to pay for QALYs

When asked about their priorities in life people in Germany tend to state that nothing is more important to them than their health. During recent years the perception of health has changed and people are becoming increasingly conscious of their well-being and claim to value it higher than financial aspects. This was confirmed by a recent survey of the reputable German research institute Forsa in which the respondents were asked to make statements about several factors in their life. 83% stated that health was very important to them and thereby ranked it as the most prioritized factor. On the other hand, an equally strong importance was assigned to financial independence by only 44% and to success in the job by only 18%[1].

This stands in contrast to a report which was published by several researchers of the CESifo institute[2]. The report deals with a study conducted by EuroVaQ in 2012 to estimate the monetary value that German people place on additional QALYs (quality adjusted life years). A QALY incorporates the increase in utility associated with a person’s health status as well as the number of years this improvement is expected to hold. The QALY concept is an established measure of benefits in countries such as the UK where it is for example used to support decision making on the introduction of health care technologies or treatments. German health institutions refuse to make use of it based on technical and ethical difficulties.

EuroVaQ carried out a study with Germans of different gender, age, income, social status and regions to test how much Germans would be willing to pay for the extension of life by one year as well as for an improvement of health for a given period of time. The findings showed that, not surprisingly, people of higher age and income showed a higher willingness to pay (WTP) for additional QALYs. Furthermore, a higher level of education was also positively correlated with people’s WTP. Additionally, Eastern Germans showed a lower WTP compared to Western Germans. Another finding was that the WTP is generally lower if the health gain lies farther in the future. This can be seen by the example that the number of people who showed zero willingness was much higher when offered one additional year at the end of their life compared to an increase in health over the next four years.
However, the most important finding was that the overall level of German’s WTP for living longer or being healthier is rather low. In comparison to people’s WTP for additional QALYs in other countries this may not be surprising. Nevertheless, it seems contradictory to the high importance that German people account to health over monetary factors in their life. Someone who prioritizes health over financial independence can be expected to show a rather high WTP for additional QALYs. The finding of the report suggests that either people themselves do not really know or are being dishonest when rating health as more important than monetary aspects. However, it is also possible that people simply value health differently when being asked under the condition that cost is included into the decision compared to valuing it free of all additional factors. Finally, the way that the surveys are conducted also play an important role. It was found in the study that the WTP increased when the questions and the survey process were designed to invoke a more realistic scenario in which people had to imagine themselves being in the situation of taking the decision.

By Nikolas Weiss (340)

[1] Press-release: Forsa survey for Horbach; “Health more important than career”; June 2013

[2] Ahlert, M.; Breyer, F.; Schwettmann, L.; „What you ask is what you get: Willingness to pay for a QALY in Germany”; CESifo working paper no. 4239; May 2013


Author: studentnovasbe

Master student in Nova Sbe

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