Resource allocation, social values and the QALY: a review of the debate and empirical evidence

Most health economists agree that public preferences should play a major role in setting criteria for distributing scarce resources. The quality‐adjusted life year (QALY) is used as a preference‐based measure for the outcome of health‐care activities in health economic evaluative studies. Traditionally, health economists proposed maximizing the additional health gain in terms of QALYs so as to maximize social welfare. Evidence has grown however, that neither potential health gain as a single relevant determinant of value, nor the rule of maximizing this health gain are sufficient. Concerns about fairness and equity are also important to the public in distributional decisions. This paper reviews the debate on the role and limitations of the QALY in health‐care priority setting and the empirical evidence surrounding it. A framework is used to systematically explore the available data on factors considered to be important to the public in health‐care resource allocation, and to investigate how these fit with the implicit value judgements inherent in the original QALY formulation. Potential sources of social value are classified into (1) factors that relate to the characteristics of patients and (2) factors related to the characteristics of the intervention's effect on patients' health. As well as these main categories, the article considers preferences for distributional rules. Recent approaches that aim to capture public preferences more comprehensively and to better reflect the value attributed to different health‐care programmes in economic evaluation methods are outlined briefly.     

Cost-utility analysis from a societal perspective

In this paper, we outline how to use cost-utility analysis from a societal perspective and the arguments that could be made for using data such as a model for economic evaluation of health care. We show that to include all the costs in the analysis, a price per quality-adjusted life years (QALY) gained rather than a given budget should be used as the decision rule. Using cost-utility analysis this way is based on a willingness to pay per QALY gained that is constant and the same for everyone. To use a fixed price per QALY gained is consistent with societal utility maximization if aggregated QALYs are a measure of societal utility and if the mix of financing sources is the same for all health care programmes. If, furthermore, the price per QALY gained is set at the optimal level, cost-utility analysis will lead to a maximization of societal utility. To get more information on the willingness to pay per QALY gained so as to provide cost-utility analysis with a useful decision rule should be a research priority.     

QALY-maximisation and public preferences: results from a general population survey

The appropriate criteria that should be used in setting priorities in a publicly funded health care system remain open to debate. From a health economics perspective, quality-adjusted life years (QALYs) are increasingly portrayed as a measure of societal value and the criterion of QALY maximisation is then advocated. This paper reports a study that investigated the extent to which some of the assumptions underlying the QALY maximisation approach, notably constant marginal societal value for increases in the size of health programmes, the level of risk, and the level of benefit are supported by members of the public. A general population interview-based survey was conducted. The survey design employed conjoint methods. In general, the public preference data from this study, in themselves, are not much at odds with the core proportionality assumptions concerning societal value in the QALY maximisation model assumptions. The data are, however, at odds with reports from various previous studies.     

QALYs: is the value of treatment proportional to the size of the health gain?

In societal priority setting between health programs for different patient groups, many people are reluctant to discriminate too strongly between those who can benefit much from treatment and those who can benefit moderately. We suggest that this view of distributive fairness has a counterpart in personal valuations of gains in health. Such valuations may be influenced by psychological reference points and diminishing marginal utility such that the individual utility of care in patient groups with different potentials may be more similar than what conventional QALY estimates suggest. In interviews in three convenience samples, there is some support for the hypothesis. Most respondents do not think that desire for treatment is significantly less in those who stand to gain only moderately compared with those who stand to gain much – even when the treatment is associated with a mortality risk. When stating insurance preferences, a majority of subjects express a greater concern for avoiding the worst states in question than for maximising expected value for money in terms of treatment effects. The tendency applies to outcomes in terms of both quality and quantity of life. Choices between prefixed response options fit well with oral explanations of these choices. Copyright © 2009 John Wiley & Sons, Ltd.     

Priority to End of Life Treatments? Views of the Public in the Netherlands

Objectives

Recent debates in the Netherlands on health care priority setting have focused on the relative value of gains generated by life-extending medicines for people with a terminal illness, mostly new cancer drugs. These treatments are generally expensive, provide relatively small health gains, and therefore usually do not meet common cost per QALY thresholds. Nevertheless, these drugs may be provided under the assumption that there is public support for making a special case for treatments for people with a terminal illness. This study investigated the views of the public in the Netherlands on a range of equity and efficiency considerations relevant to priority setting and examines whether there is public support for making such a special case.

Eliciting preferences for resource allocation in mental health care in Ireland

The proportion of total health care expenditure devoted to mental health care in Ireland, at just below 7%, is low relative to other countries. There have been few studies that have examined the relationship between public preferences for different kinds of health care expenditure and priority setting as undertaken by policy-makers and governments. This paper examines citizen's rankings and willingness to pay for a community-based mental health care programme in Ireland relative to two other programmes: cancer and elderly care. Respondents rank cancer as the most important programme, followed by elderly care and then mental health care. The contingent valuation survey demonstrated that people are willing to make significant tax contributions to new community-based services for people with mental health problems, counteracting the view sometimes expressed that people do not care at all about mental health care provision. However, the survey also found that people tend to value additional spending on mental health care lower than cancer and elderly care programmes.     

Eliciting preferences for resource allocation in mental health care in Ireland

The proportion of total health care expenditure devoted to mental health care in Ireland, at just below 7%, is low relative to other countries. There have been few studies that have examined the relationship between public preferences for different kinds of health care expenditure and priority setting as undertaken by policy-makers and governments. This paper examines citizen's rankings and willingness to pay for a community-based mental health care programme in Ireland relative to two other programmes: cancer and elderly care. Respondents rank cancer as the most important programme, followed by elderly care and then mental health care. The contingent valuation survey demonstrated that people are willing to make significant tax contributions to new community-based services for people with mental health problems, counteracting the view sometimes expressed that people do not care at all about mental health care provision. However, the survey also found that people tend to value additional spending on mental health care lower than cancer and elderly care programmes.     

Nutrition and maternal health: What women want and can we provide it?

Aim:  Maternal dietary behaviours are associated with some maternal and infant health outcomes during and after pregnancy. However, effective Maternal Health Dietetic models of care are limited. The aim of this study was to benchmark our services against other Australian Maternal Health Dietetic services and to describe nutrition knowledge and use of dietetic services in a major Australian women's hospital.
Method:  During 2008, 15 Australian tertiary Maternal Health Dietetic services were surveyed collecting staffing and service delivery information. Patients in a maternity hospital were also surveyed to assess nutrition knowledge, attitudes, behaviour, education preferences and dietetic service awareness.
Results:  The benchmarking survey response rate was 73%. There was considerable variation in staffing levels and services delivered. Individual antenatal inpatient and outpatient counselling dominated dietetic time. Few evidence-based models of care or guidelines were used by dietitians. Of the 309 antenatal (RR 24%) and 102 postnatal (RR 17.4%) patients surveyed, half were primiparous; over one-third had prepregnancy body mass indices > 25.9 kg/m², and average pregnancy weight gain was 14.1 ± 6.7 kg. Few antenatal women knew their recommended pregnancy weight gain range. Excessive weight gain occurred in 33.3% to 100% of women (per body mass index range). Women had poor diet quality, despite identifying healthy eating as a personal priority. Nutrition education delivery preferences were identified.
Conclusion:  Considerable variation exists in Australian Maternal Health Dietetic services and referral guidelines. There is a role for Maternal Health Dietitian/Nutritionists to advocate for improved staffing levels and for the implementation and evaluation of evidence-based services. Potential service delivery improvements are suggested, including a model of dietetic care.     

Incorporating societal concerns for fairness in numerical valuations of health programmes

The paper addresses some limitations of the QALY approach and outlines a valuation procedure that may overcome these limitations. In particular, we focus on the following issues: the distinction between assessing individual utility and assessing societal value of health care; the need to incorporate concerns for severity of illness as an independent factor in a numerical model of societal valuations of health outcomes; similarly, the need to incorporate reluctance to discriminate against patients that happen to have lesser potentials for health than others; and finally, the need to combine measurements of health-related quality of life obtained from actual patients (or former patients) with measurements of distributive preferences in the general population when estimating societal value. We show how equity weights may serve to incorporate concerns for severity and potentials for health in QALY calculations. We also suggest that for chronically ill or disabled people a life year gained should count as one and no less than one as long as the year is considered preferable to being dead by the person concerned. We call our approach 'cost-value analysis'.     

Balancing equity and efficiency in the Dutch basic benefits package using the principle of proportional shortfall

Economic evaluations are increasingly used to inform decisions regarding the allocation of scarce health care resources. To systematically incorporate societal preferences into these evaluations, quality-adjusted life year gains could be weighted according to some equity principle, the most suitable of which is a matter of frequent debate. While many countries still struggle with equity concerns for priority setting in health care, the Netherlands has reached a broad consensus to use the concept of proportional shortfall. Our study evaluates the concept and its support in the Dutch health care context. We discuss arguments in the Netherlands for using proportional shortfall and difficulties in transitioning from principle to practice. In doing so, we address universal issues leading to a systematic consideration of equity concerns for priority setting in health care. The article thus has relevance to all countries struggling with the formalization of equity concerns for priority setting.     

Involving the general public in priority setting: experiences from Australia

The discussion over whether community preferences have a legitimate role to play in priority setting has been highly polarised. Skeptics warn of the risk of establishing a 'dictatorship of the uninformed', while advocates proclaim the legitimacy of the participatory process. The one group who appears not to be consulted in this debate is the citizens themselves. In this study, a convenience sample of 373 citizens attending two medical clinics in central Sydney were surveyed about whether the general public has a legitimate role to play in informing priority setting in health care. Respondents were presented with three different levels of priority setting: across health care programmes, across medical procedures, and at a global level. To assist respondents in understanding the choices and trade-offs involved, they were given information about current levels of funding and the cost-effectiveness of each alternative. Respondents were asked whether they felt the preferences of the general public should be used to inform priority setting at each level. Of particular interest was the question of whether their willingness to use public preferences depended on the level of priority setting. Respondents were also asked about who else's preferences should be used to inform priority setting at each level. The results suggest that the public overwhelmingly want their preferences to inform priority-setting decisions in health care. This was seen to be particularly important in informing decisions about how to prioritise across broad health care programmes and about the criteria to be used to allocate funds across different population groups. In contrast, the preferences of medical professionals and health service managers were rated most highly in relation to the prioritisation of different treatments and medical procedures. In most cases, however, respondents did not advocate the use of one particular group's preferences. Even when the preferences of the general public were considered most important, it was felt that any decision-making process needed to be informed by the preferences of a range of groups. The preferences of politicians were viewed as least important to processes of priority setting in health care.     

Incorporating concerns for equal lifetime health in evaluations of public health programs

Economic evaluations are increasingly common as evidence in priority setting decisions, but lack of quantification of equity impact represents a situation of asymmetric information that easily lead to discrepancies between stated preferences for distribution of health care and the preferences revealed in actual priority setting. We suggest Gini impact and Achievement Index methodology as tools that can be used to incorporate concerns for equal lifetime health in numerical evaluation of public health programs. In a case study from Tanzania we explore how these techniques may diminish this information asymmetry. By comparing a childhood vaccine with treatment of hypertension in adults, we show that concerns for equity in the distribution of healthy years can be captured with standard measures of inequality and combined with a maximization concern. This illustrative case from a low-income setting, where resources are insufficient to meet the needs of both patient groups, illustrates how quantification of equity impact may change priorities.     

Cost-Effectiveness of Sorafenib for Second-Line Treatment of Advanced Renal Cell Carcinoma

Objectives:  To estimate the cost-effectiveness of sorafenib (Nexavar, Bayer, Leverkusen, Germany) versus best supportive care (BSC) for second-line treatment of advanced renal cell carcinoma from the perspective of the UK National Health Service.
Methods:  A decision analytic model was developed to estimate the cost-effectiveness of sorafenib. The clinical effectiveness of sorafenib versus BSC was taken from a recent randomized phase III trial. Utility values were taken from a phase II trial of sunitinib, using EQ-5D tariffs. Cost data were obtained from published literature and were based on current UK practice. The effect of parameter uncertainty on cost-effectiveness was explored through extensive one-way and probabilistic sensitivity analyses.
Results:  Compared to BSC, sorafenib treatment resulted in an incremental cost per quality-adjusted life year (QALY) gained of £75,398, based on an estimated mean gain of 0.27 QALYs per patient, at a mean additional cost of £20,063 (inflated to 2007/2008). The probability that sorafenib is cost-effective compared to BSC at a willingness to pay threshold of £30,000 per QALY is 0.0%. In sensitivity analysis, estimates of cost per QALY were sensitive to changes in the clinical effectiveness parameters, and to health state utilities and drug costs.
Conclusions:  Sorafenib has been shown to be clinically effective compared to BSC, offering additional health benefits; however, with a cost per QALY in excess of £70,000, it may not be regarded as a cost-effective use of resources in some health-care settings.     

Use of societal criteria in evaluation of medical technology assessment research proposals in the netherlands: Development and testing of a checklist

Rising health care costs, and the recognition that medical technology is a significant contributor to these costs, have provided the stimulus to develop medical technology assessment programmes in the Netherlands. The most important programme in this field is the Investigational Medicine Programme of the Dutch Sick Funds Council So far, priority setting for evaluation of medical technologies in this programme has mostly been based on the scientific merits of individual research proposals. This research was undertaken to encourage priority setting in health care research concerning both new and existing medical technology based on societal criteria as well. A literature study was performed to identify relevant items for the development of a checklist. The checklist was tested using a random selection of eight research proposals granted in the context of the Investigational Medicine Programme. Results of the reassessment showed that, despite the inclusion of a specific question in the application form focusing on societal aspects of an intervention, this issue is hardly dealt with. In those cases where information is given by investigators, its quality is relatively poor. In an attempt to improve this situation and as a result of our work, the Investigational Medicine Committee has restructured its application form. This article concludes with suggestions to improve the methodology of priority setting in health care research.     

Estimating a constant WTP for a QALY—a mission impossible?

Economic evaluations are an important input to decision-making and priority-setting in the health care sector. Measuring preferences for health improvements, as the demand-side value (willingness to pay) of gaining a quality-adjusted life year (QALY), is one relevant component in the interpretation of the results from health economic evaluations. Our article addresses whether willingness to pay for a QALY (WTP-Q) is sensitive to the size of the health differences and the probability for improvement. We use data from a contingent valuation survey based on 1400 respondents conducted in the spring of 2014. The results show that the expectation of sensitivity to scope, or higher WTP to the larger expected quality of life improvement, is not supported. We find WTP-Q values that conform reasonably well to previous studies in Sweden.     

QALYs and ageism: philosophical theories and age weighting

QALY maximization is sometimes criticized for being 'ageist', because, other things being equal, the elderly, with a shorter life expectancy, will be given lower priority. On the other hand, there are philosophical arguments that, for different reasons, advocate rationing health care to the elderly, even when the size of the expected benefits in QALY terms is the same across older and younger patients. This paper examines six proposals, both from the philosophical and the health economics literature, that will lead to such conclusions. These are: two variants of the so-called fair innings argument, the fair innings weights, the Disability Adjusted Life Year (DALY) age weighting, the biographical life span, and the prudential lifetime account. Two questions are addressed with regard to each of these. First, what is the reason for choosing the younger patient when the QALY gains are equal; second, will the younger patient continue to be chosen even when the QALY gains to the older patient are larger. The paper studies the relationship between the six proposals and explores their possible implications for QALY maximization.     

Equity in health care prioritisation: an empirical inquiry into social value

The value of QALY gains for different patients may be recalculated using equity weights, but it is unclear which interpretation of equity should be used: severity of illness, fair innings or proportional shortfall. We set up an experiment to analyze which of these equity concepts best reflects people's distributional preferences. Sixty respondents assigned a priority rank to the treatment of 10 conditions using the paired comparison technique. We described these real-life conditions by their actual QALY profiles, i.e. in terms of age, disease free period, duration of disease, quality of life, and life years lost. Next we determined the priority rank order of the 10 conditions by the three equity concepts, using the weights that each equity concept attributes to the different units of the QALY profile describing the 10 conditions. To explore the social interpretation of equity, we compared the observed and theoretical rank orderings using Spearman correlations. All correlations were significant at a 0.05 level. Fair innings best predicted the observed rank order of the 10 conditions (r=0.95). Weaker correlations were found for proportional shortfall (r=0.82) and severity of illness (r=-0.65). This result calls attention to health policy, because actual health care decisions often reflect concerns of severity of illness. This raises the question if health care decision makers evaluate the claims of different patients for health care by appropriate criteria.     

Cost effectiveness of a community based exercise programme in over 65 year olds: cluster randomised trial

OBJECTIVE: To assess the cost effectiveness of a community based exercise programme as a population wide public health intervention for older adults. DESIGN: Pragmatic, cluster randomised community intervention trial. SETTING: 12 general practices in Sheffield; four randomly selected as intervention populations, and eight as control populations. PARTICIPANTS: All those aged 65 and over in the least active four fifths of the population responding to a baseline survey. There were 2283 eligible participants from intervention practices and 4137 from control practices. INTERVENTION: Eligible subjects were invited to free locally held exercise classes, made available for two years. MAIN OUTCOME MEASURES: All cause and exercise related cause specific mortality and hospital service use at two years, and health status assessed at baseline, one, and two years using the SF-36. A cost utility analysis was also undertaken. RESULTS: Twenty six per cent of the eligible intervention practice population attended one or more exercise sessions. There were no significant differences in mortality rates, survival times, or admissions. After adjusting for baseline characteristics, patients in intervention practices had a lower decline in health status, although this reached significance only for the energy dimension and two composite scores (p<0.05). The incremental average QALY gain of 0.011 per person in the intervention population resulted in an incremental cost per QALY ratio of 17 174 (95% CI = 8300 to 87 120). CONCLUSIONS: Despite a low level of adherence to the exercise programme, there were significant gains in health related quality of life. The programme was more cost effective than many existing medical interventions, and would be practical for primary care commissioning agencies to implement.     

Longevity bias in cost-effectiveness analysis

We use a simple lifetime utility maximization model to study the problem of medical resource allocation. This model leads to a welfare specification with a QALY (quality-adjusted life-year) component that captures an individual's preferences over both life expectancy and health status. The goal of medical cost-effectiveness analysis (CEA) is characterized as maximizing the QALY measure for a given total medical expenditure. We show that the CEA with such a goal has a longevity bias: the CEA-based division of a given total medical expenditure between extending life and improving health gives the former a larger share than is called for by welfare maximization.     

The Potential Clinical and Economic Outcomes of Pharmacogenomic Approaches to EGFR-Tyrosine Kinase Inhibitor Therapy in Non–Small-Cell Lung Cancer

Objectives:  Pharmacogenomic applications in oncology offer significant promise, but the clinical and economic implications remain unclear. The objective of this study was to evaluate the potential cost-utility of implementing epidermal growth factor receptor (EGFR) testing before initiating second-line therapy for advanced refractory non–small-cell lung cancer (NSCLC).
Methods:  We developed a decision analytic model to evaluate the cost-utility of EGFR protein expression or gene copy number testing compared to standard care with erlotinib in refractory advanced NSCLC patients. Costs and utilities were obtained from publicly available sources. We performed sensitivity analyses to evaluate uncertainty in the results.
Results:  The quality-adjusted life expectancies for erlotinib, EGFR protein expression testing, and gene copy number testing were: 0.44, 0.48, and 0.50 quality-adjusted life years (QALYs); and the costs were: $57,238, $63,512, and $66,447, respectively. The most cost-effective testing option, EGFR gene copy number testing, produced an incremental cost-effectiveness ratio of $162,018/QALY compared to no testing (erlotinib). The results were most sensitive to the survival estimates, health state utilities, and cost of disease progression. In the probabilistic sensitivity analyses, erlotinib without testing was the optimal treatment strategy until the $150,000/QALY willingness-to-pay threshold, after which gene copy testing was optimal. The discounted expected value of perfect information at a $100,000/QALY threshold in the USA over 5 years was $31.4 million.
Conclusions:  The study results suggest that EGFR pharmacogenomic testing has the potential to improve quality-adjusted life expectancy in the treatment of refractory NSCLC by a clinically meaningful margin at a value commensurate with the approved therapies in this setting. Additional research in this area is warranted.