An Overview of Methods and Applications to Value Informal Care in Economic Evaluations of Healthcare
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This paper compares several applied valuation methods for including informal care in economic evaluations of healthcare programmes: the proxy good method; the opportunity cost method; the contingent valuation method (CVM); conjoint measurement (CM); and valuation of health effects in terms of health-related quality of life (HR-QOL) and well-being. The comparison focuses on three questions: what outcome measures are available for including informal care in economic evaluations of healthcare programmes; whether these measures are compatible with the common types of economic evaluation; and, when applying these measures, whether all relevant aspects of informal care are incorporated.
All types of economic evaluation can incorporate a monetary value of informal care (using the opportunity cost method, the proxy good method, CVM and CM) on the cost side of an analysis, but only when the relevant aspects of time costs have been valued. On the effect side of a cost-effectiveness or cost-utility analysis, the health effects (for the patient and/or caregiver) measured in natural units or QALYs can be combined with cost estimates based on the opportunity cost method or the proxy good method. One should be careful when incorporating CVM and CM in cost-minimization, cost-effectiveness and cost-utility analyses, as the health effects of patients receiving informal care and the carers themselves may also have been valued separately. One should determine whether the caregiver valuation exercise allows combination with other valuation techniques.
In cost-benefit analyses, CVM and CM appear to be the best tools for the valuation of informal care. When researchers decide to use the well-being method, we recommend applying it in a cost-benefit analysis framework. This method values overall QOL (happiness); hence it is broader than just HR-QOL, which complicates inclusion in traditional health economic evaluations that normally define outcomes more narrowly. Using broader, non-monetary valuation techniques, such as the CarerQol instrument, requires a broader evaluation framework than cost-effectiveness/cost-utility analysis, such as cost-consequence or multi-criteria analysis.
Informal care constitutes a substantial part of total healthcare provided, especially, although not exclusively, in the context of chronic diseases. Many people provide care tasks for someone in need of care in their social environment, mostly as a non-professional and unpaid. In general, the odds of being involved in the provision of informal care are considerable. In the Netherlands, for instance, about 10% of the population of 16 million inhabitants provide informal care. Inherently, informal care is not formally organized and is normally not paid out of healthcare budgets. As such, it is often an unnoticed part of total healthcare. As a consequence, attention on informal care has been limited, both in general and in the context of economic evaluations.
However, in recent years, both at a policy level and in the area of economic evaluations, attention on informal carers has begun to increase. Several studies have demonstrated the impact of informal care on carers, sometimes leading to high personal and societal costs, adverse health effects and even increased mortality risks.[2,3] Nonetheless, as long as such costs and effects are not systematically considered in healthcare decisions and analyses, informal care will continue to be considered a ‘zero cost’ substitute for formal care, leading to potentially undesirable outcomes from a societal perspective. Therefore, more attention on informal care is warranted. This is even more important in light of anticipated demographic trends; as a result of the ageing of the population, the demand for both formal and informal care is likely to increase, while, at the same time, the availability of professional workers in the formal care sector is likely to decrease. Rationing of care will become increasingly necessary.[4, 5, 6, 7, 8, 9]
Whenever informal care plays a substantial role in the treatment of patients, we argue that it needs to be considered in economic evaluations of healthcare programmes. The normally advocated societal perspective indeed dictates that all costs and effects need to be included in an analysis. This holds for patient-centered interventions in which informal care is an important input, as well as for interventions that are targeted at informal caregivers, such as support programmes and respite care.
The fact that costs and outcomes of informal care are often ignored in economic evaluations sometimes relates to the fact that the societal perspective is not adhered to, with a healthcare budget perspective being taken instead. Although one may criticize such a narrow perspective for not considering all relevant societal costs, it needs to be noted that even from such a restricted perspective, the position of carers should not be ignored, because possible adverse health effects in this group are also relevant from a healthcare budget perspective.[12,13] Another important reason for the lack of systematic inclusion of informal care in economic evaluations is that standardized methods to value informal care that are compatible with the common types of economic evaluation in healthcare are not available. The availability, development and use of such methods are prerequisites for the systematic incorporation of informal care in economic evaluations.
What outcome measures are available for including informal care in economic evaluations of healthcare programmes?
Are these measures compatible with the common types of economic evaluation?
When applying these measures, are all relevant aspects of informal care incorporated?
1. Valuation Methods for Informal Care
It is important to emphasize that different types of economic evaluations require different information regarding informal care. This may affect the possible and preferred measures for valuing informal care in those different contexts. All types of economic evaluations require information regarding costs of informal care, whereas the required information on effects or on benefits for informal caregivers may vary per method. The distinction between costs and effects of informal care is not always straightforward, for example, when valuing leisure time lost.
the proxy good method;
the opportunity cost method;
the contingent valuation method (CVM);
the conjoint measurement method (CM);
measurement of health effects, in terms of health-related quality of life (HR-QOL);
measurement of well-being, in terms of subjective (monetized) well-being, care-related QOL (CarerQol) and process utility.
1.1 Proxy Good Method
The proxy good (or market cost) method[10,15,16] is the most straightforward valuation method, and values the time spent on informal caregiving at the price of a close market substitute. The value of caregiver time can then differ for different tasks. For example, housework is valued at the market wage rate of a professional housekeeper, and personal care is valued at the market wage rate of a professional nurse. The proxy good method thus requires a list of the care tasks performed, the time spent on these tasks and proxy values for each task.
One advantage of the proxy good method (as compared with the methods in sections 1.2–1.6) is that the proxy value of each task can be estimated once and then used for different caregiving situations. The method also has some disadvantages. First, by using wage rates as the proxy value of time, one assumes that formal care and informal care are perfect substitutes and that, for instance, no differences in efficiency and quality exist. The method also assumes that informal caregiving does not involve direct (dis)utility. This means that neither the care recipient nor the informal caregiver has a preference for informal over formal care, or vice versa (e.g. it does not take into account that informal caregivers may experience fulfilment from providing care to a loved one).
The costs of informal care estimated using the proxy good method can be incorporated on the cost side of all common types of economic evaluation, as they are purely monetary. Double counting with, for instance, patient outcomes or costs is not expected, because only the informal caregiver’s input is considered. This method may also be used in combination with other methods such as measuring health effects in terms of HR-QOL (see section 1.5); however, caution is warranted to avoid double counting.
1.2 Opportunity Cost Method
In using the opportunity cost method[5,10,17] to value informal care, one estimates the value of the informal caregiver’s benefits forgone as a result of spending time on providing informal care. In general, the forgone benefits are approximated by an individual’s market wage rate. The value of informal care then equals the market wage rate of the informal caregiver multiplied by the hours spent on informal care. In an ideal world, this implies that, from the perspective of the informal caregiver, the value of all hours spent on informal care, including the last hour, exceeds the caregiver’s hourly market wage rate. The opportunity cost method therefore gives a minimum value of informal care. This method requires information about the time foregone for providing care and about the person’s wage rate.
One problem with the opportunity cost method is that many informal caregivers typically are not active on the labour market, such as full-time housewives or retired people. Therefore, no market wage rate may be available that can be readily used to value the opportunity costs of their time. In this case, one can use the reservation wage rate, which is the wage rate for which the informal caregiver is willing to supply at least 1 hour of paid labour. Another practical solution is the imputation of the known wage rates of similar people (e.g. same sex, educational level and age). If people provide care by reducing unpaid work or leisure time, for which no wage rate is available either, then the value of this time also needs to be estimated. In all cases of application of the opportunity cost method, it is important to be clear about the sources of time foregone, and the rate used to value this time. Finally, a noteworthy aspect of the opportunity cost method is that it leads to different values for the same commodity, depending on the informal caregiver’s wage rate. For instance, informal care provided by a bank manager will have a higher value than the same task provided by a cashier, all other things being equal.
The costs of informal care, according to the opportunity cost method, can be incorporated on the cost side of all common types of economic evaluation, as they are purely monetary. Double counting with patient costs or outcomes is not expected to pose a serious threat. This method can also be used in combination with other methods to measure the full impact of informal care, such as measuring health effects in terms of HR-QOL (see section 1.5). In this case, avoidance of double counting deserves attention, as well as the appropriate way of incorporating the health effects of informal caregivers in economic evaluations.
A more structural problem with both methods is that all care hours provided are valued equally, without considering possible differences in attractiveness or disutility between the first and the last hour or between different care tasks. Hence, both methods do not reflect heterogeneity very well in their valuation of informal care. A further limitation to be considered is that both methods value only the time invested in providing care, not the full impact of caregiving on the caregiver.
1.3 Contingent Valuation Method
The CVM values informal care by assessing the minimum amount of money an informal caregiver would want to receive (WTA) for providing an additional hour of informal care, or, alternatively, the maximum amount of money the caregiver would pay (WTP) for reducing caregiving by 1 hour.
There are several problems with CVM in the context of informal care. First, many people have a hard time eliciting a monetary value for their time or may feel especially uncomfortable with indicating what they would require as monetary compensation for providing an additional hour of informal care to a loved one. This may result in protest answers, an over-representation of zero values, and extreme outliers. Second, it has been argued that CVM measures only stated intention and that values may be quite different in a revealed preference context. Third, it is well known that CVM is susceptible to several problems and biases, such as strategic answers and starting-point biases. Finally, double counting could be an important problem in the application of CVM because, theoretically at least, informal caregivers are assumed to take the preferences and perhaps the health of their care recipient into account in their valuation.
Recently, we applied CVM to elicit informal caregivers’ WTA for providing an additional hour of informal care (see table II). The study showed that CVM is feasible in the context of informal care, with WTA values for different informal care tasks ranging between €7.20 per hour for personal care and €9.72 per hour for housework (year 2001 values). WTA was positively associated with caregiver characteristics, such as higher income, being male, being a housewife or house-husband and the subjective burden of caregiving, whereas better health of the care recipient was associated with lower WTA.
Van den Berg et al. further tested the feasibility of CVM (see table II) and concluded that the data were generally consistent with general welfare theory that accounts for the interdependency in preferences between caregiver and care recipient. Both patient and caregiver wealth had a positive impact on WTP/WTA, the caregivers’ own health had a negative impact, and care recipients’ health had a mixed effect. As opposed to most CVM studies, there were only small differences between WTP and WTA, which suggests that people have either clearer preferences regarding monetary compensation for informal care than for many other non-market commodities or stronger anchors on which to base their valuations.
Results of contingent valuation studies may be applicable in all common types of economic evaluations in healthcare, conditional on what is included in the valuation (e.g. how the WTP/WTA question is framed). For the same reason, double counting may be a problem in the application of CVM, as informal caregivers may take all sorts of effects, as well as the preferences of the care recipient, into account.
1.4 Conjoint Measurement
CM (or analysis) is a method for analysing preferences for a set of multi-attribute alternatives. Respondents are asked to evaluate different states of the world, usually called scenarios. These scenarios differ according to pre-specified dimensions, called attributes, which can take different values (levels). By evaluating a set of these scenarios, people reveal their relative preferences for the scenarios. If the level of one of the attributes is expressed in monetary terms, it is possible to derive implicit values of the other attributes. In this way, a value in monetary terms can be derived for any commodity, including informal care. Different CM techniques are available for eliciting preferences for scenarios and attributes, including ranking, rating, discrete choice and best-worst scaling.
Recently, a CM study was performed among 135 informal caregivers, who rated four scenarios consisting of three attributes: type of informal care task; number of informal care hours per week; and monetary compensation per hour worked. The results showed that informal caregivers required an additional compensation of €8 to switch from providing 7 hours of informal care per week to 8 hours per week, whereas the marginal costs of providing 9 hours a week instead of 7 hours were €18 (year 2001 values). Different care tasks were also valued differently. Informal caregivers required an extra compensation of >€13 per hour to switch from providing light housework to personal care.
A disadvantage of CM is that evaluating multi-attribute scenarios may be perceived to be cognitively demanding, as we have found, especially by older and less educated informal caregivers. Monetary valuations of informal care as derived from CM studies may be imputed in different types of economic evaluations depending on what exactly has been valued in the exercise (costs only or costs and health effects and/or well-being). Double counting may be a problem in the application of CM, just as with CVM (section 1.3), as informal caregivers may also take the preferences of the care recipient into account.
CVM and CM are similar in the sense that they are stated preference methods that, depending on their design, result in overall monetary valuations of informal care. Within economic evaluation, CM is of growing importance for the measurement of patient preferences. An important advantage of CM as compared with CVM is that it does not ask directly for a monetary valuation of informal care, and this may limit the number of protest or strategic answers. Researchers are also able to decompose the total valuation into various aspects of the commodity.
1.5 Valuation of Health Effects
Provision of informal care can lead to caregiver mental and physical health problems and even to a higher mortality risk. HR-QOL measurement may be used to assess the impact of providing informal care on caregivers’ health. However, the causality of the relationship between providing informal care and HR-QOL complicates the analysis of health effects of informal caregiving. Does the strain of providing informal care lead to reductions in HR-QOL, or do people with health problems who become informal caregivers perceive their care task as being more straining? This causality is crucial if one wishes to incorporate informal caregivers’ health losses in economic evaluations, because the focus of an economic evaluation is on the health effects of an intervention. In this respect, studying informal care and HR-QOL in longitudinal studies and controlled trials is important.
Moreover, some HR-QOL reductions reported in informal caregivers (such as depression and anxiety) may be related more to a patient’s illness (i.e. that someone in the social environment of the carer is ill, independent of caregiver tasks) than to the provision of informal care. This has been called the family effect and, in economic evaluations performed from a societal perspective, should be included as health effects in significant others[27,28] but not mistaken for caregiver effects.
In previous research, we applied the generic EQ-5D several times in cross-sectional studies on caregivers for stroke (n = 218) and RA (n = 147) patients (see also table II).[29,30] Although informal caregivers sometimes had higher QOL scores, on average, than their references in the general population of the same age and sex, this seems to be related to selection bias, similar to the healthy worker bias. Indeed, informal caregivers who provided a substantial amount of informal care over a longer period or to patients in a relatively worse health state were most likely to have a lower QOL score.
In cost-effectiveness and cost-utility analysis, HR-QOL data may be combined with cost estimates, as derived from the opportunity cost method (section 1.2) and the proxy good method (section 1.1), without risk of double counting.
1.6 Valuation of Well-Being
Informal care may affect caregiver well-being beyond health.[22,31] Different approaches have been proposed to capture such broader effects. First of all, these effects could be captured in monetary terms using CVM (section 1.3) or CM (section 1.4) techniques. Another way is to measure overall well-being directly, for instance, using self-reported well-being questions or the CarerQol instrument.
The ‘well-being valuation method’ is able to produce a complete monetary valuation of informal care, capturing all the costs (and benefits) faced (or enjoyed) by caregivers in terms of utility. The broad concept of well-being of the informal caregiver was first applied in a sample of 865 Dutch informal caregivers. Information on happiness (well-being), income and the number of hours of informal care provided was combined in order to derive an implicit trade-off between income and hours of informal care, provided that well-being remains equal (see table II). This trade-off is taken as the monetary value of providing an additional hour of informal care, for example.
The CarerQol instrument aims to measure care-related QOL and thus attempts to provide a complete valuation of informal caregiving in terms of happiness. The fact that providing informal care influences one’s general well-being, which is broader than only HR-QOL, lies at the root of the development of the instrument. It was designed in a similar fashion to the well-known EuroQol instrument. The CarerQol describes the impact of informal care on seven main dimensions of subjective burden (i.e. fulfilment, relationships, mental health, social, financial, perceived support and physical health) and makes an assessment of the total valuation of this impact from the perspective of the caregiver in terms of happiness (well-being), using a visual analogue scale (VAS). This instrument was used to assess the QOL of 175 Dutch caregivers. This was the first study to apply this method.
A measure that is similar to the CarerQol is the Caregiver Quality of Life Instrument (CQLI).[25,32] The CQLI uses a time trade-off technique to obtain utility scores for three standardized caregiver situations and the respondent’s own state. Disadvantages of the CQLI are its complexity and its high costs; it requires face-to-face interviews by trained interviewers.
Process utility refers to the (positive or negative) utility directly derived from the process of providing informal care. It is measured by calculating the difference between the current happiness of a caregiver and the happiness of that same caregiver in the hypothetical situation in which all care tasks are taken over free of charge by a person of the caregiver’s and the patient’s choice, all else being equal. As a question on current happiness is already included in the CarerQol, process utility can be assessed by adding an additional question to the CarerQol instrument.
We found that, on average, the level of happiness decreased by 6.5 points on a 0–100 scale in the hypothetical scenario of care tasks taken over free of charge by a caregiver rather than being provided by an informal caregiver. This indicates that providing informal care, on average, has a positive impact on well-being. However, the sub-group of informal caregivers experiencing high strain from their caregiving tasks (37% of all caregivers) indicated that they would be (substantially) more happy not providing informal care. In this sample, process utility was related to caregiver characteristics such as age, sex, general happiness, relationship to the patient, difficulties in performing daily activities, the subjective burden and the number of hours of care provided. This confirms the importance of process utility and well-being as outcome measures when analysing informal care. Although not an independent valuation technique, process utility can help us to understand the underlying dynamics of informal care, which is also the aim of the CarerQol.
The measurement of well-being seems typically suitable in the context of a cost-benefit analysis, as (at least in theory) it incorporates all aspects of caregiving: time, financial, health and psychological aspects. But, as discussed in the case of HR-QOL (section 1.5), the causality of the relationship between providing informal care and well-being complicates the application of the well-being method and the CarerQol. However, application of these concepts in controlled trials could help overcome the causality problem. Moreover, it needs to be noted that, as in the measurement of health effects (section 1.5), measurements of well-being may include both family and caregiver effects.
CarerQol is not easily incorporated into the results of an economic evaluation, except in the case of evaluation of a programme targeted at caregivers (typically in a cost-utility analysis). In other cases, CarerQol should preferably be reported separately, or as one of the items in a multi-criteria analysis.
1.7 Objective and Subjective Burden
Objective burden and subjective burden are two important measures in the area of informal care, which do not constitute valuations. Objective burden concerns the time invested in caring and the caregiving tasks performed. Subjective burden refers to how an informal caregiver experiences her or his care task, and is related to the balance between the objective burden of the care task and the supporting capacity of the informal caregiver.
Examples of much-used validated instruments for measuring subjective burden are the Caregiver Strain Index, the Caregiver Reaction Assessment and the Sense of Competence Questionnaire. However, these multidimensional, multi-item instruments operationalize subjective burden in many different ways, making interpretation and comparison of results difficult. In addition, most instruments do not value the burden; they merely register it. An exception to this is the recently developed Self-Rated Burden (SRB) instrument, a VAS that asks informal caregivers to give an overall ‘evaluation’ score for their burden. Comparison of the SRB with the above-mentioned instruments (see table II) revealed that informal caregivers do not equally weigh the different dimensions of burden these instruments cover, which implies that a simple sum score would not be appropriate as a caregiver preference-based measure of burden.
Given the information value of objective and subjective burden assessments, the incorporation of these measures in economic evaluations has been suggested. However, the results of such assessments are primarily suitable as additional, supporting information in most types of economic evaluations, as the findings are not expressed in monetary terms or HR-QOL. Moreover, as subjective burden shows clear overlap with other measures such as health effects and costs, there is a high risk of double counting.
In summary, table II presents monetary values for the average cost per hour of informal care based on different valuation methods using data from recent research among Dutch informal caregivers. Values ranged between €7 and €17 per hour; the differences between the methods were moderate. The valuation methods that encompass the most aspects of informal care (CVM, CM and valuation of well-being) did not elicit higher valuations. Three different populations of informal caregivers were included in these studies: caregivers for patients with stroke; caregivers for patients with RA; and a heterogeneous population providing care for patients with various diseases. The hourly valuation of informal care does not appear to depend on the specific carer population. For example, the mean WTP estimates for caregivers and care recipients in the RA populations were similar to those in the heterogeneous population. The proxy good and opportunity cost methods were both applied to data from carers for patients with stroke and RA. The opportunity cost method produced higher estimates for carers in the stroke population than in the RA population (see table II), mainly as a result of the larger proportion of carers giving up paid work. In respect of the proxy good method, the difference was much smaller.
Attention on informal care and its inclusion in economic evaluation is increasing. Indeed, in an increasing number of countries, national guidelines for economic evaluation studies include explicit instructions regarding incorporation of informal care. However, these guidelines do not always relate to all costs and effects of informal care.
In the UK, for instance, the National Institute for Health and Clinical Excellence (NICE) recommends the UK NHS/Personal Social Service (PSS) perspective for costing, which excludes caregiver costs. However, for health effects, NICE advises considering all health effects, both in patients and, where relevant, in other individuals (principally carers). Recently, caregiver effects were explicitly discussed in relation to drugs for dementia: “The Committee heard that, when the effect on carers is to be considered in an economic evaluation, it should only be considered from the point of view of either carer benefits, in the form of improvements in quality of life (utilities), or carer costs in the form of some (monetary) valuation of the opportunity costs of caring, but not both. The Committee also noted that costs related to NHS and PSS resources that are required to achieve clinical and health-related benefits are the only appropriate ones to include.”
In the Netherlands, as another example, guidelines prescribe the use of the societal perspective in economic evaluations of healthcare interventions, which preferably includes direct costs outside the healthcare system, such as those for informal care. The Dutch manual for costing in economic evaluations states that informal care costs consist of material and time costs, and recommends that time be valued using a shadow price based on the proxy good method (€8.30 per hour for the year 2003, based on cleaning jobs) or based on contingent valuation.
In this article, we discussed the main methods for the valuation of informal care. Although most methods can be incorporated in all common types of economic evaluation (see table I), it remains important to take the merits and downsides of the methods closely into consideration when choosing which method to use. At present, table I should be viewed as a provisional overview of the methods for the valuation of informal care, which can be applied in the available types of economic evaluation studies.
As research on the valuation of informal care is still quite new, it seems premature to be conclusive about which valuation method is preferable. In addition, the choice of method is likely to depend on the perspective of the economic evaluation. Still, some general guidance may be provided. It may be concluded that all types of economic evaluation can incorporate a monetary value of informal care (using the opportunity cost method, the proxy good method, CVM or CM) on the cost side of an analysis, but only when the relevant aspects of time costs have been valued. On the effect side of a cost-effectiveness or cost-utility analysis, the health effects (for the patient and/or caregiver) measured in natural units or QALYs can be combined with cost estimates, based on the opportunity cost method or the proxy good method. One should be careful with incorporating CVM and CM in cost-minimization, cost-effectiveness and cost-utility analyses, as health effects of patients receiving informal care and the carers themselves may also have been valued separately. Whether the caregiver valuation exercise allows combination with other valuation techniques needs careful consideration.
In cost-benefit analyses, the appropriate tools for the valuation of informal care appear to be CVM and CM. When researchers decide to use the well-being method, we recommend applying it in a cost-benefit analysis framework. The valuation of overall QOL (happiness), not just HR-QOL, complicates inclusion of the well-being method in traditional health economic evaluations (cost-effectiveness and cost-utility analyses) that normally define outcomes more narrowly. Using broader, non-monetary valuation techniques such as the CarerQol requires a broader evaluation framework than cost-effectiveness or cost-utility analysis, such as cost-consequence or multi-criteria analysis.
The right valuation technique may be used in the wrong way. How best to use the techniques also requires attention. The careful design and testing of different valuation approaches, capturing all relevant aspects of informal care and disregarding the irrelevant ones, remains an important research area. Moreover, more research could be aimed at disentangling caregiver and family effects.
We recommend using a combination of several of the techniques discussed in this article in future research in order to detect the full impact of informal caregiving. More information on the performance of different methods should also be gathered. Informal care is valuable. It is time for it to be valued.
No sources of funding were used to assist in the preparation of this review. The authors have no conflicts of interest that are directly relevant to the content of this review.
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