Jeff Richardson

Cost utility analysis: What should be measured?

The paper re-examines the issue of the appropriate unit for measuring output in cost utility analysis and the technique that will measure it. There are two main themes. The first is that utility, as it is often conceived and quantified, is not an appropriate basis for measurement. Consequently, a question arises concerning the selection of an appropriate unit of measurement. The second theme is that there is a need to establish criteria for the evaluation of measurement units. Four criteria are proposed which follow from commonly accepted social objectives and from the requirements of a measurement unit. It is concluded that, as judged by these criteria, the measurement units produced by the time trade-off and person trade-off (equivalence) techniques are more satisfactory than the units produced by the rating scale, magnitude estimation or the standard gamble.

Maximizing health benefits vs egalitarianism: An Australian survey of health issues

Economists have often treated the objective of health services as being the maximization of the QALYs gained, irrespective of how the gains are distributed. In a cross section of Australians such a policy of distributive neutrality received: (a) very little support when health benefits to young people compete with health benefits to the elderly; (b) only moderate support when those who can become a little better compete with those who can become much better; (c) only moderate support when smokers compete with non smokers; (d) some support when young children compete with newborns; and (e) wide spread support when parents of dependent children compete with people without children. Overall, the views of the study population were strongly egalitarian. A policy of health benefit maximization received very limited support when the consequence is a loss of equity and access to services for the elderly and for people with a limited potential for improving their health.

Who cares about cost? Does economic analysis impose or reflect social values?

In a two-stage survey, a cross-section of Australians were questioned about the importance of costs in setting priorities in health care. Generally, respondents felt that it is unfair to discriminate against patients who happen to have a high cost illness and that costs should therefore not be a major factor in prioritising. The majority maintained this view even when confronted with its implications in terms of the total number of people who could be treated and their own chance of receiving treatment if they fall ill. Their position cannot be discarded as irrational, as it is consistent with a defensible view of utility. However, the results suggest that the concern with allocative efficiency, as usually envisaged by the economists, is not shared by the general public and that the cost-effectiveness approach to assigning priorities in health care may be imposing an excessively simple value system upon resource allocation decision-making.

The Significance of Age and Duration of Effect in Social Evaluation of Health Care

To give priority to the young over the elderly has been labelled ‘ageism’. People who express ‘ageist’ preferences may feel that, all else equal, an individual has greater right to enjoy additional life years the fewer life years he or she has already had. We shall refer to this asegalitarian ageism. They may also emphasise the greater expected duration of health benefits in young people that derives from their greater life expectancy. We may call thisutilitarian ageism. Both these forms of ageism were observed in an empirical study of social preferences in Australia. The study lends some support to the assumptions in the QALY approach that duration of benefits, and hence old age, should count in prioritising at the budget level in health care.

The Measurement of Utility in Multiphase Health States

To examine the validity of the additive quality-adjusted life year model used to evaluate a multiphase health state, data from a pilot study of mammography were used to determine whether the values assigned to a multiphase postmastectomy health state could be estimated from a combination of the independently rated constituent health state values. The results suggest that they cannot.

The allocation of health care resources : an ethical evaluation of the 'QALY' approach

Contents: Introduction The background to the QALY Age discrimination Quality of life Double jeopardy Public opinion Conclusion Bibliography Index.