Should Commercial Diagnostic Testing Be Stimulated or Discouraged? Analyzing Willingness-to-Pay and Market Externalities of Three Commercial Diagnostic Tests in The Netherlands.

Abstract

Consumers may purchase commercial diagnostic tests (CDT) without prior doctor consultation. This paper analyzes three CDT markets-commercial cholesterol tests (CCT), direct-to-consumer genetic health tests (DGT) and total body scans (TBS)-in the context of the universal, collectively financed health care system of the Netherlands. An online willingness-to-pay (WTP) questionnaire was sent to a representative sample of 1500 Dutch consumers. Using contingent valuation (CV) methodology, an array of bids for three self-tests were presented to the respondents. The results were extrapolated to the Dutch population and compared to current prices and follow-up medical utilization, allowing analysis from a societal perspective. Overall, 880 of 1500 respondents completed the questionnaire (response rate 59%). Of the respondents, 26-44% were willing to pay a positive amount for the CDT. Willingness-to-pay was correlated to age and household income, but not to health status or prior experience with these tests. At mean current prices of €29 for CCT, €229 for DGT and €1,650 for TBS, 3.3%, 2.5%, and 1.1%, were willing to purchase a CCT, DGT, and TBS, respectively. All three CDT resulted in net costs to the health system, estimated at €5, €16, and €44 per test, respectively. Reducing volumes by 90,000 CCTs (19%), 19,000 DGTs (5%) and 4,000 TBSs (2.5%) in 2019 would optimize welfare. Most respondents were unwilling to consume CDT at any price or only if the CDT were provided for free. However, for a small group of consumers, societal costs exceed private benefits. Therefore, CDT regulation could provide small welfare gains.