Quality adjusted life year may be worth more when life expectancy is at stake

In assessing the effectiveness of a medication or treatment, the number of years by which the treatment extends life is not the only measure of interest. We also want to maintain or improve quality of life. Quality adjusted life years (QALYs) are an outcome measure used to asses both the quantity and quality of life lived with a specific disease or after a given treatment.

Treatments, policy changes, and other interventions aimed at extending life and improving quality of life usually come at some cost or financial investment. A new treatment may be more cost effective than existing options, achieving comparable or even better health outcomes for each dollar spent.

Decision makers abroad – particularly in the UK, Netherlands, Australia, and Sweden – have increasingly used cost-effectiveness analysis to determine which interventions or treatments to fund or prioritize. A recent study from Swedish researchers seeks to understand how much people would be willing to pay for a quality adjusted life year, with the thought that this value could then be compared to the cost per QALY of an intervention, policy, or technology.

“…it is relevant for policy-makers and decision-makers to have an understanding of the preferences of the population regarding resource allocation, which is exactly the information provided in a [willingness to pay]-based threshold value.”

Linda Ryen and Mikael Svensson, Health Economics

Related Content:

Health Spending

Charges for emails with doctors and other healthcare providers

Health Spending

How does medical inflation compare to inflation in the rest of the economy?

Cost per QALY values cannot feasibly be estimated for every potential investment, so the general approach is to determine a cost-effective threshold value (or range of values). Methods for determining this threshold value vary – some are supply-sided, others demand-sided. All of the studies included in this review were demand-sided, and most surveyed people directly about their willingness to pay in exchange for reduced mortality risks or for better health.

Researchers in this study reviewed existing literature on willingness to pay for a quality adjusted life year (QALY), finding that all QALYs are not equal – willingness to pay for improved life expectancy was greater than willingness to pay for improved quality of life.. In studies that directly surveyed people about their preferences, respondents were generally willing to pay more for a QALY when asked about hypothetical scenarios involving risk of premature death than when they were questioned only about quality of life.

“The implication in this case is that [willingness to pay for a QALY] estimates obtained from [quality of life] improvements might not be appropriate when evaluating policies affecting length of life and vice versa. Still, there is a lack of studies combining quality and length of life changes, which in practice might be the relevant case for a large number of policies or health technologies that are evaluated.”

Linda Ryen and Mikael Svensson, Health Economics

The review presents a mean willingness to pay of €118, 839 Euros per QALY based on 2010 price levels across 24 different research studies. This is the approximate equivalent of $157,393 U.S. Dollars per QALY based on 2010 price levels. Although some of the studies included in this review were performed in the U.S., the majority were from European countries, where significant cultural differences may lead to different results. Several other factors could be behind the range of willingness to pay-based threshold values in current literature, including different study methodologies and survey methods.

The Peterson Center on Healthcare and KFF are partnering to monitor how well the U.S. healthcare system is performing in terms of quality and cost.

More from Health System Tracker
A Partnership Of
Share Health System Tracker