Beyond QALYs: Multi-criteria based estimation of maximum willingness to pay for health technologies
The QALY is a useful outcome measure in cost-effectiveness analysis. But in determining the overall value of and societal willingness to pay for health technologies, gains in quality of life and length of life are prima facie separate criteria that need not be put together in a single concept. A focus on costs per QALY can also be counterproductive. One reason is that the QALY does not capture well the value of interventions in patients with reduced potentials for health and thus different reference points. Another reason is a need to separate losses of length of life and losses of quality of life when it comes to judging the strength of moral claims on resources in patients of different ages. An alternative to the cost-per-QALY approach is outlined, consisting in the development of two bivariate value tables that may be used in combination to estimate maximum cost acceptance for given units of treatment—for instance a surgical procedure, or 1 year of medication—rather than for ‘obtaining one QALY.’ The approach is a follow-up of earlier work on ‘cost value analysis.’ It draws on work in the QALY field insofar as it uses health state values established in that field. But it does not use these values to weight life years and thus avoids devaluing gained life years in people with chronic illness or disability. Real tables of the kind proposed could be developed in deliberative processes among policy makers and serve as guidance for decision makers involved in health technology assessment and appraisal.
KeywordsQALY Societal value Graded willingness to pay Proportional shortfall Absolute shortfall Cost value analysis
JEL ClassificationD61 D63 I13
I am very grateful to Jaime Caro, Paul Menzel, Jeff Richardson, and Michael Schlander for helpful comments on an earlier version of this paper.
- 2.The Swedish Parliamentary Priorities Commission: Priorities in Health Care. SOU 1995:5. Stockholm: The Ministry of Health and Social Affairs (1995)Google Scholar
- 4.National Institute for Health and Clinical Excellence (NICE): Appraising life-extending, end-of-life treatments. Guidelines. London: NICE (2009)Google Scholar
- 5.Menzel, P.: Strong Medicine. Oxford University Press, Oxford (1990)Google Scholar
- 6.Richardson, J.: Economic assessment of health care: theory and practice. The Australian Economic Review (1991). (1st quarter, 4–19)Google Scholar
- 13.Schlander, M., Garattini, S., Holm, S., Kolominsky-Rabas, P., Nord, E., Persson, U., et al.: Incremental cost per quality-adjusted life year gained? The need for alternative methods to evaluate medical interventions for ultra-rare disorders. J. Comp. Eff. Res. 3, 399–422 (2014)CrossRefPubMedGoogle Scholar
- 14.World Health Organization: Making fair choices on the path to universal health coverage. Final report of the WHO Consultative Group on Equity and Universal Health Coverage. Geneva: WHO (2014)Google Scholar
- 15.Hausman, D.: Valuing health. Oxford Press, New York (2016)Google Scholar
- 19.Chombart de Lauwe, P.H.: Sociologie des aspirations. Denoël, Paris (1979)Google Scholar
- 24.Stolk, E., Pickee, S., Ament, A., Busschbach, J.: Equity in health care prioritization: an empirical inquiry into social value. Health Econ. 74, 343–355 (2005)Google Scholar
- 25.Norwegian Ministry of Health.: White Paper on Priority Setting. Oslo (2016)Google Scholar
- 26.Harris, J.: The value of life. Routledge, London (1985)Google Scholar