Interaction Effects in Health State Valuation Studies: An Optimal Scaling Approach

Objectives: This study aimed to introduce a parsimonious modeling approach that enables the estimation of interaction effects in health state valuation studies. Methods: Instead of supplementing a main-effects model with interactions between each and every level, a more parsimonious optimal scaling approach is proposed. This approach is based on the mapping of health state levels onto domain-specific continuous scales. The attractiveness of health states is then determined by the importance-weighted optimal scales (ie, main effects) and the interactions between these domain-specific scales (ie, interaction effects). The number of interaction terms only depends on the number of health domains. Therefore, interactions between dimensions can be included with only a few additional parameters. The proposed models with and without interactions are fitted on 3 valuation data sets from 2 different countries, that is, a Dutch latent-scale discrete choice experiment (DCE) data set with 3699 respondents, an Australian time trade-off data set with 400 respondents, and a Dutch DCE with duration data set with 788 respondents. Results: Important interactions between health domains were found in all 3 applications. The results confirm that the accumulation of health problems within health states has a decreasing marginal effect on health state values. A similar effect is obtained when so-called N3 or N5 terms are included in the model specification, but the inclusion of 2-way interactions provides superior model fits. Conclusions: The proposed interaction model is parsimonious, produces estimates that are straightforward to interpret, and accommodates the estimation of interaction effects in health state valuation studies with realistic sample size requirements. Not accounting for interactions is shown to result in biased value sets, particularly in stand-alone DCE with duration studies.