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Society For Risk Analysis Annual Meeting 2007

Risk 007: Agents of Analysis

Session Schedule & Abstracts

* Disclaimer: All presentations represent the views of the authors, and not the organizations that support their research. Please apply the standard disclaimer that any opinions, findings, and conclusions or recommendations in abstracts, posters, and presentations at the meeting are those of the authors and do not necessarily reflect the views of any other organization or agency. Meeting attendees and authors should be aware that this disclaimer is intended to apply to all abstracts contained in this document. Authors who wish to emphasize this disclaimer should do so in their presentation or poster. In an effort to make the abstracts as concise as possible and easy for meeting participants to read, the abstracts have been formatted such that they exclude references to papers, affiliations, and/or funding sources. Authors who wish to provide attendees with this information should do so in their presentation or poster.

Common abbreviations

W3-A Assessing the Cost-Effectiveness of Regulatory Risk Management Options Room: 202A   2:00 - 3:30 PM

Chair(s): John Graham, Zubair Saleem

W3-A.1  14:00  The IOM's recommendations for valuing health in regulatory cost-effectiveness analysis: Implementation status and potential enhancements. Robinson LA*, Miller W, Krupnick A; Independent consultant; George Washington University; Resources for the Future   lisa.a.robinson@comcast.net Abstract: In this session, some of the contributors to the 2006 IOM report, "Valuing Health for Regulatory Cost-Effectiveness Analysis," will re-visit its recommendations. We will begin with an overview of the impetus for the report, then discuss the reception of its recommendations including the extent to which they have been implemented in analyses of economically significant Federal regulations. We will consider the advantages and limitations of the recommendations from the perspective of the regulatory agencies, as well as from the perspectives of theory (economic and ethical) and empirical research. In addition, we will consider how regulatory CEA could be improved in terms of its usefulness for policy decisionmaking. For example, we will consider the relative strengths and limitations of CEA and BCA for regulatory analysis, the usefulness of CEA with different effectiveness measures (e.g., QALYs vs. physical units), and the effective communication of the results to government decisionmakers and stakeholders. We will also examine parallels and distinctions between the use of CEA in regulatory and medical care contexts.

W3-A.2  14:15  Valuing QALYs: Empirical Evidence and Equity Considerations. Haninger K*; Harvard University   haninger@hsph.harvard.edu Abstract: Willingness to pay (WTP) and quality-adjusted life years (QALYs) are commonly used alternative methods of valuing health risk, but there is little empirical research on the relationship between them. How they relate has important implications for the role of cost-effectiveness analysis in regulatory policies that affect health and safety. This talk will examine two lines of research on the valuation of health using QALYs. The first is the empirical finding that individuals do not have a constant rate of WTP for changes in QALYs, which implies that cost-effectiveness analysis using cost per expected QALY gained and measures of population health that assume a constant value per life year or QALY are not consistent with economic welfare theory and must be justified on extra-welfarist principles. The second is the proposal to incorporate such extra-welfarist principles into cost-effectiveness analysis through the use of quantitative measures known as equity weights that would reflect the relative social value of allocating QALYs to different groups of individuals. In both cases, the talk will examine the extent of the problems posed by using weighted or unweighted QALYs in regulatory analyses and what future research should be undertaken to improve the valuation of health risk.

W3-A.3  14:30  Decisionmaker Responses to Information on Cost-Effectiveness. Sofaer S*, Bryan S, Gold M, Seigelberg T; Baruch College   shoshanna_sofaer@baruch.cuny.edu Abstract: Cost-effectiveness analysis (CEA) is largely unused in the US. Our research explored receptiveness to CEA among those who influence coverage decisions, and how institutional constraints, individual values and methodological concerns shape decision-maker views. We collected data at six workshops in California with senior leaders from health insurance plans, purchasers, disease management organizations, and state regulators. All were asked to play the role of “social decision-maker” addressing hypothetical coverage decisions for the Medicare program. CEA methods were explained; ethical/normative issues inherent in CEA were discussed; and participants prioritized 14 treatments for coverage in response to information from published CEA studies. After this, participants discussed advantages and barriers to CEA within their organizations. A pre-group survey addressed knowledge and attitudes to CEA and asked respondents to prioritize the 14 treatments based on effectiveness information alone. A post-group survey re-asked knowledge and attitude questions and added questions about CEA. In the post-workshop survey, over 90% said CEA should be an input into Medicare coverage decisions and over 70% said it should be used by private plans. After getting CE ratios on treatments, participants changed their priorities to fund treatments with more favorable ratios, and exclude treatments with higher ratios. Reasons for their organizations’ avoiding use of CEA included: fears of negative consumer perceptions; litigation risks; inadequate in-house expertise; worries about biased studies; ethical concerns; and a preference for reducing costs by reducing demand. Many noted that no private sector entity could “go it alone” in explicitly using CEA. These findings imply decision-makers are favorably disposed to CEA, but that for it to be used in the US, a visible health policy leader, such as Medicare, must move toward making CEA studies an input into coverage decisions.

W3-A.4  14:45  Cost-Effectiveness Analysis at the US Environmental Protection Agency: Beyond the IOM Report. Dockins C, Wheeler W*, Simon N; U.S. Environmental Protection Agency   Wheeler.William@epamail.epa.gov Abstract: Cost-Effectiveness Analysis (CEA) has been conducted at the EPA for many years, but there has been a growing interest in this technique and its consistent application in rule-making. In fact, the Office of Management and Budget (OMB) now requires CEA for rules where "the primary benefits are improved public health and safety to the extent that a valid effectiveness measure can be developed to represent expected health and safety outcomes." In 2006, the Institute of Medicine (IOM) published a report entitled "Valuing Health for Regulatory Cost-Effectiveness Analysis." This report offers good guidance to comply with the OMB requirement, but the application of this guidance to EPA rules has provided some challenges. This paper discusses how CEA is currently being conducted at the EPA and how the IOM recommendations are being implemented. It also discusses how the CEA for health and safety outcomes may or may not be applicable to EPA regulation, especially when there are large non-health and safety benefits from the regulation.

W3-A.5  15:00  Discussant: Cost-Effectiveness Analysis of Risk Regulation: Perspectives from OMB. Morrall J*; US Office of Management and Budget

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