ML20302A117
| ML20302A117 | |
| Person / Time | |
|---|---|
| Issue date: | 10/28/2020 |
| From: | Pamela Noto Office of Nuclear Material Safety and Safeguards |
| To: | |
| Pamela Noto | |
| References | |
| Download: ML20302A117 (40) | |
Text
Valuing Nonfatal Cancer Risks in Cost-Benefit Analyses Public Meeting October 29, 2020
Purpose Present approaches to value nonfatal cancer risks for use in cost-benefit analyses 2
Logistics and Ground Rules 3
Category 3 Public Meeting Questions and discussion are encouraged Please identify yourself and the organization you represent (if any) before speaking
4 Agenda
Background
Approaches to Health Risks Valuation Federal Agency Practices NRC Proposed Approach for Nonfatal Health Risks Next Steps
=
Background===
5 NRC conducts regulatory analyses for Commission decisionmaking Health detriments from radiation exposure are valued using a dollar per person-rem conversion factor NUREG-1530 provides the dollar per person-rem conversion factor In the SRM to SECY-12-0110, the Commission approved the staffs plan, which included updating NUREG-1530
Dollar per Person-Rem Conversion Factor Dollar per person-rem conversion factor is used in cost-benefit analyses to determine the monetary valuation of the consequences associated with radiological exposure Dollar per person-rem is the product of
- value of a statistical life (VSL)
- probability for stochastic health effects per radiological dose dollar per person-rem value of a statistical life ($)
nominal risk coefficient (per rem)
=
x
NUREG-1530, Revision 1 7
In revising the NUREG, the staff is proposing to change its method for valuing radiological exposure Incorporates a revised method for valuing cancer mortality An approach for valuing nonfatal cancer risk is not included
Approaches to Health Risks Valuation 8
Approaches to Valuation 9
Financial Burden of Disease Direct Markets Cost of Illness Human Capital Individual Willingness to Pay Revealed Preference Stated Preference Hedonic Wage Contingent Valuation Averting Behaviors Discrete Choice Modeling Proxy Approaches Constant Fraction of Mortality Jury Awards Monetized Quality-Adjusted Life Years Data Sources Conceptual Approach Method Indirect Data Sources
Approaches to Valuation (cont.)
10 WTP Revealed Preference Stated Preference Cost of Illness Proxy Methods Monetized Quality-Adjusted Life Years (QALYs)
Jury Awards
OMB Circular A-4, Regulatory Analysis 11 Willingness to pay (WTP) is the most appropriate measure for monetizing health benefits Office of Management and Budget (OMB) recommends using alternative approaches (e.g., health utility studies) when WTP data is not available
Willingness to Pay The rate at which individuals would spend their own money for small changes in their nonfatal cancer risk within a defined time 1
2
Revealed Preference 13 Utilize individuals choices in real markets
- Hedonic wage
- Averting behaviors Advantages
- Based on market data and observable choices that individuals make Disadvantages
- Assumes individuals are risk-aware
- Limited data
Stated Preference 14 Usually involves surveying individuals about the value they place on a good or service in a hypothetical market Advantages of surveys
- Used to analyze the specific risk of concern
- Provides detailed information about the health risks they are valuing
- May include questions to gauge the understanding of the information Disadvantages of surveys
- Participants have less incentive to carefully consider their choices
- Subject to biases (e.g. warm glow effect, protest responses)
Cost-of-Illness 15 Estimates the financial burden of a disease on an individual and society Cost Components
- Direct costs of medical treatment
- Indirect costs due to lost productivity and lost income
- Indirect opportunity costs such as lost leisure time Advantages
- Cost components based on market data
- Relatively easy to explain and understand Disadvantages
- Does not capture pain and suffering
- May greatly underestimate WTP
Quality-Adjusted Life Years
- A summary measure of a health outcome including both the years and quality of life
- Used extensively in cost-effectiveness analysis of medical interventions
- Health index
- 1 = ideal health
- 0 = death 16
Quality-Adjusted Life Years (cont.)
17 QALY monetization is typically done by dividing the VSL by remaining life expectancy Output is value of statistical life year (VSLY)
Advantage
- QALY values exist for a vast number of illnesses Disadvantage
- Methods used to develop QALYs are proxy methods that are not based on direct value elicitations
Open Discussion
Federal Agency Practices 19
Federal Agency Practices NRC reviewed available Federal-wide guidance and rulemakings that valued nonfatal health effects
- Agencies reviewed
- Department of Health and Human Services (HHS)
- Food and Drug Administration (FDA)
- Department of Transportation (DOT)
- Department of Labor (DOL)
- Department of Agriculture (USDA) 20
Environmental Protection Agency 21 The EPA published Guidelines for Preparing Economic Analyses, in 2010, providing an overarching framework for economic analyses Discusses different approaches to health valuation Benefits transfer of existing WTP values is the preferred approach
Example of the Environmental Protection Agencys Analyses Arsenic in Drinking Water Rule Economic Analysis(2000)
- Used benefits transfer of WTP estimate to avoid chronic bronchitis as a surrogate for bladder cancer
- WTP estimate is based on 1996 study of nonfatal lymphoma risks (Magat et al., 1996) 22
Health and Human Services Guidelines Guidelines for Regulatory Impact Analysis
- WTP is the preferred method
- Monetized QALYs is a proxy if WTP estimates are unavailable The Guidelines provide detailed guidance on the application of monetized QALYs 23
Food and Drug Administration Recent Analysis Smokeless Tobacco Proposed Rule used a monetized QALY approach to value changes in oral cancer risks Estimated the present discounted value of QALYs gained for an individual 62 years old (median age of diagnosis)
Assumed for a case of oral cancer:
- Upon diagnosis, assign a health-related quality of life (HRQL) of 0.68 for first year during treatment
- Recurrence risk within 5 years of diagnosis is 19.1% with an HRQL of 0.68
- For cancer patients who remain cancer free for 5 years, the HRQL is 0.75 24
Food and Drug Administration Recent Analysis (cont.)
- For the baseline case, age-specific HRQL weights are assigned in each year of life between 62 and 100.
- The QALY is monetized by dividing VSL by the present discounted QALYs remaining for an individual 40 years in age and averaged across gender.
25 Mean HRQL Scores (EQ-5D US)
Age Male Female 20 - 29 0.928 0.913 30 - 39 0.918 0.893 40 - 49 0.887 0.863 50 - 59 0.861 0.837 60 - 69 0.84 0.811 70 - 79 0.802 0.771 80 - 89 0.782 0.724 Scores taken from Hanmer et al 2006.
Department of Labor Examples Two recent final rules monetized benefits of decreased cancer risks:
- Occupational Exposure to Respirable Crystalline Silica
- Occupational Exposure to Beryllium Used the WTP approach and provided low and high estimates for valuation
- Low value: value of statistical injury derived from an analysis of hedonic wage studies
- High value: WTP to avoid non-fatal lymphoma as a fraction of VSL
- Did not designate a best estimate 26
Department of Agriculture Practice Within the USDA, the Economic Research Service publishes and maintains costs of foodborne illnesses for 15 major pathogens Cost estimates
- Medical costs due to inpatient and outpatient care
- Opportunity costs of lost workdays The WTP to avoid pain and suffering associated with nonfatal illness risks is not monetized:
- Lack of suitable WTP estimates
- Cited two National Academy of Science committee and EPA Science Advisory Board recommendations against monetizing QALYs 27
Department of Transportation
- DOT publishes crash injury costs by severity on the Maximum Abbreviated Injury Scale (MAIS)
- DOT establishes relative disutility factors, which represent a fraction of VSL, for non-fatal injury levels 28 Relative Disutility Factors by Injury Severity
Conclusion The general consensus is that WTP is the best method to value morbidity risks; however, there is limited applicable WTP data Two approaches have been recently applied by Federal agencies for valuing cancer morbidity
- EPA/Occupational Safety and Health Administration-benefits transfer of a WTP estimate
- HHS (FDA)-monetized QALYs
NRC Proposed Approach for Nonfatal Cancer Risks 30
Considerations
- The application of WTP estimates is the preferred method for monetizing changes in health risks
- However, in absence of available estimates, OMB allows the use of proxy measures such as health utilities
- The literature review revealed a single reference for nonfatal cancer risks that used the WTP approach to value only one cancer type (lymphoma) 31
Considerations (cont.)
- Exposure of a population to radiation can induce other types of health effects (e.g., leukemia, multiple myeloma, thyroid cancer, breast cancer, lung cancer)
- Other Federal agencies have successfully applied the QALY approach in the absence of WTP data
- Sufficient data sources are available to address morbidity effects using a monetized QALY approach 32
Proposed Approach
- Estimate the value per statistical cancer using a monetized QALY approach that makes use of existing HRQL values
- Apply these value estimates to the nonfatal portion of the EPAs cancer incidence risk coefficient 33
Open Discussion
Next Steps 35 Incorporate, as appropriate, feedback from this public meeting Develop estimates of nonfatal cancer risk values as an appendix to NUREG/BR-0058, Revision 5 Issue the appendix for public comment/public meeting Consider public comments and finalize the appendix Brief the Advisory Committee on Reactor Safeguards on final appendix Submit final appendix to Commission for review and approval
How Did We Do?
There are several ways you can provide your feedback on this meeting:
- Scan QR code for NRC Public Meeting Feedback Form-Meeting ID # 20201083
- Go to the Public Meeting Schedule and click on the Meeting Feedback link.
36
Backup Slides 37
38 References EPA, 2000. Arsenic in Drinking Water Rule Economic Analysis.
EPA, 2010. Guidelines for Preparing Economic Analyses. National Center for Environmental Economics.
FDA, 2017. Tobacco Product Standard for N-Nitrosonornicotine Level in Finished Smokeless Tobacco Products. Federal Register, 82 FR 8004, January 23, 2017.
Hanmer, J., Lawrence, et. al., 2006. Report of Nationally Representative Values for the Noninstitutionalized U.S. Adult Population for 7 Health-related Quality of Life Scores. Med Decision Making, Vol. 26, Issue 4, pp. 391-400.
HHS, 2016. Guidelines for Regulatory Impact Analysis. Office of the Assistant Secretary for Planning and Evaluation.
Magat, W.A., Viscusi, W.K., and Huber, J., 1996. A Reference Lottery Metric for Valuing Health. Management Science, Vol. 42, No. 8, pp. 1118-1130.
NRC, 1995. NUREG-1530, Reassessment of NRCs Dollar Per Person-Rem Conversion Factor Policy. Available at ML063470485.
NRC, 2013. SRM-SECY-12-0110, Consideration of Economic Consequences in the NRCs Regulatory Framework. Available at ML13079A055.
NRC, 2017. SECY-17-0017, Proposed Revision to NUREG-1530, Reassessment of the NRCs Dollar per Person-Rem Conversion Factor Policy. Available at ML16147A293 (package).
NRC, 2020. Valuing Morbidity White Paper. Available at ML20058C225.
Acronyms DOL Department of Labor DOT Department of Transportation EPA Environmental Protection Agency FDA Food and Drug Administration HHS Department of Health and Human Services HRQL health-related quality of life MAIS Maximum Abbreviated Injury Scale NRC Nuclear Regulatory Commission OMB Office of Management and Budget QALY quality-adjusted life year SRM staff requirements memoranda USDA United States Department of Agriculture VSL value of a statistical life VSLY value of a statistical life year WTP willingness to pay 39
Willingness to Pay X represents an individuals initial wealth and nonfatal cancer risk (morbidity)
Rate of tradeoff, represented by the slope of the line, is called the WTP.
=
~ w p, for small changes in risk 40