Norwegian Institute of Public Health

Erik Nord, Norwegian Institute of Public Health

June 22 2007

Consensus workshop on QALYs: Three basic issues.

Introduction

The following brief note is meant as a possible help to structuring discussions at the Philadelphia workshop, beginning with the telephone conferences of Group B.

My starting point is the core idea of the QALY and similar concepts like the Healthy Year Equivalent (HYE) and the Disability Adjusted Life Year (DALY), which is:

(1) to use a gained life year in full health in the near future (a ‘gained life year’ for short) as a reference outcome and (2) to value other possible outcomes of health care – whatever their nature - relative to this reference outcome.

These ideas are intrinsic to QALYs, HYEs and DALYs. I regard further specifications of QALYs as non-intrinsic. From the above core ideas, a number of possible routes forward are possible and discretionary. Some of these routes may call for other names than ‘QALY’. I shall therefore partly be using the term ‘Outcome Valuation’ below, as a common name for all approaches that build on the core ideas above.

In fulfilling point 2 above, it seems to me that three main issues need to be addressed up front:

1. Which policy relevant question is the Outcome Valuation supposed to answer? This is much the same as asking in what sense or meaning outcomes are supposed to be valued relative to the reference outcome. 2. Given a specific question or meaning, who should be asked to judge the value of different outcomes? 3. According to appropriate judges (point 2), what are the functional relationships between value and different main aspects of health outcomes, such as severity of initial condition, improvement in quality of life, gain in length of life, distance in time, patients’ age etc? Note that this is not a question about valuing different illness symptoms and impairments relative to each other (which is only a means to quantifying one of the main aspects of outcomes, namely improvements in quality of life). Question 3 addresses a higher level of the model, namely what weight different main aspects should be assigned.

In the following I suggest that question 1 (about the intended meaning of Outcome Valuations) has several possible answers and that the answer to question 2 (whom to ask about values) follows from the answer to question 1. Regarding question 3 - the functional relationships between main aspects and value - I suggest that QALY research

1 has focussed very much on something else, namely the undesirability of different states of illness and disability. This is of course useful. But the QALY value function as such – in its most common form - is largely based on assumptions made by early developers of the QALY rather than on data from appropriate judges. There is a need to reconsider the original assumptions – and thus the model as such - in the light of later evidence.

To which questions may Outcome Valuations be the answer?

The health economics literature suggests that over the years, different researchers have had in mind different questions that policy makers may ask and to which Outcome Valuations may offer answers. The following questions are probably the most salient ones:

1. How desirable – relatively speaking - do people in general think it is to avoid different possible health losses in the future (e.g. to avoid having moderate angina for 10 years vs to avoid losing 5 years of life due to cancer). QALYs typically purport to answer this type of question. QALYs may thus be said to express value in terms of ‘ex ante desirability’ (often called ‘ex ante preferences’ or ‘ex ante utility’).

2. How much do people with different conditions of illness or disability actually suffer, and how much value do people with different conditions place ex post on different treatments? Outcome Valuations that purport to answer these types of question may be said to express value in terms of ‘experiential utility’ (often referred to as ‘ex post utility’).

3. When thinking about both efficiency and fairness, how highly does the general public value programs for different groups of patients, disabled people or people at risk? Outcome Valuations that purport to answer this type of question may be said to express value in terms of ‘overall societal value’.

There is also a fourth possible meaning of Outcome Valuations, which is perhaps less directly related to an explicit policy question, but nevertheless worth mentioning because of the prominent research group associated with it, namely so-called ‘predicted self utility’. In this interpretation, the value of a health state is the utility that well informed members of the general public predict that they would experience if they were to be in the state in question. It is the target concept of value in the Health Utilities Index (Torrance et al 1982, and Torrance 2007, personal communication) and thus an important potential interpretation of QALYs.

With the exception of HUI-associated work, it seems that QALYs today are mostly interpreted in terms of ex ante desirability (Gold et al, 1996, see also for instance Sintonen, 1981 and the EuroQol Group, 1990). But Outcome Valuations first developed with considerable emphasis on experiential utility (Berg, 1972; Weinstein and Stason 1977) and overall societal value (Culyer, Lavers and Williams, 1971; Rosser and Kind, 1978). Experiential utility is also the target of the Australian Quality of Life Instrument (Hawthorne and Richardson et al, 1997), and overall societal value has been the focus of a number of researchers in later years (Menzel, 1990; Nord, 1992; Richardson 1994; Ubel et al 1996; Pinto 1997; Williams, 1997). It seems safe to say that no single form of healthy-year-oriented Outcome Valuations may be said to be ‘the correct one’.

2 The various concepts of value are related empirically. In particular, information about experiential utility will tend to affect the general public’s ex ante judgements of the undesirability of different health losses as well as their judgements of the overall societal value of programs for different groups, and individuals’ ex ante judgements of personal desirability are likely to spill over on their judgements of fairness – and thus of overall societal value - of resource allocation across groups.

A more detailed comment is called for regarding ‘predicted self utility’ (PSU). Given the definition of this concept above, it is the same as a well informed judgement of a later feeling. It is thus conceptually different from ex ante desirability, which is a present feeling about something that may happen later. Clearly, a person can predict that a later feeling will be different from a present one. PSU is very close to experiential utility (EPU), inasmuch as it is actual experience that is the target. The only difference is that PSU is elicited in samples of the general public rather than in patients. The rationale for this is to ensure representativity with respect to values (which may be biased in samples of patients). But bearing in mind that the best predictions a rational person can give is to use the values observed historically in similar circumstances (‘the historical statistical mean is the best prediction’), predicted self utility will ideally, i.e. in well informed people, merge with observed experiential utility in patients who in other respects (valuewise, lifestylewise) are similar to persons in a representative population sample. In other words, if a rational population sample is told about the quality of life of people much like themselves living with condition A, they will predict this quality of life as their own quality of life if they were to have condition A.

Regarding the first three concepts of value above, it must be stressed that their relevance depends on the question asked. I submit that they therefore may exist alongside each other as different value estimates without inconsistency or self contradiction being implied. For instance, the general public may to some extent hold ‘biased’ ex ante views on the ‘badness’ of different health problems that no amount of information about actual experience in patients will ever completely rectify. In other words, ex ante desirability may to some extent ‘live its own life’. The same may be said of overall societal judgements of fairness in resource allocation. They may continue to exist and be meaningful and acceptable even if one is able to show that they do not fit with the same judges’ long term self interests behind a veil of ignorance.

Moreover, all the three concepts of value may be of interest to policy makers. To see this, consider a regional health authority that has decided to cut back on expenditures and is looking at a handful of ongoing programs in which cuts might be implemented. Policy makers may then be interested in knowing the preferences of the general public as to which of the programs they personally, i.e. in self interest behind a veil of ignorance about future health, would think it most important to maintain in their health insurance plan in coming years. This amounts to ascertaining the ex ante desirability of the various programs. But policy makers will surely also want to know what is actually being achieved in each program, i.e. what is the experiential utility. Finally, the policy makers could be facing difficult ethical choices, for instance between cutting down on help to the worse off versus cutting down on help to those with a greater capacity to benefit. Policy makers might be interested in making such choices in a way which the electorate, i.e. the general public, would deem fair. Similarly, analysts preparing economic evaluations for politicians might be interested in conducting their analyses in terms reflecting trade offs

3 between concerns for efficiency and fairness that politicians have agreed upon and specified earlier. In both cases, assessments of the overall societal value of the various programs will be of interest.

Who should be asked about values?

The above analysis suggests that experiential utility from patients and disabled people (current and/or former) is needed whichever question an Outcome Valuation is supposed to answer. If the question is the second one above (about experiential utility), then obviously patients and disabled people are the only source needed. If the question is about ex ante desirability or overall societal value or predicted self utility, the general public will have to be asked after having been informed about experiential utilities. With predicted self utilities one will expect very small differences between these and reported experiential utilities from population representative groups of patients and disabled people.

How much should different aspects of outcomes count?

To be able to value health outcomes of different kinds relative to gaining a health life year, a number of basic valuation issues need to be resolved. Below I formulate them such that they apply whichever concept of value (see above) one has in mind. I also briefly indicate my personal impression of what we presently know about the various empirical questions raised:

1. Severity: If A is a specific state of illness, what is the value of averting A for a year relative to averting the loss of a healthy life year?

There is a vast body of data on the value of different health states within the ex ante desirability interpretation. The Health Utilities Index has much data in the predicted self utility interpretation, but it must be said that the respondents are hardly well informed. There is limited data in terms of experiential utility, but the data that exists, suggests much lower values for averting ‘liveable’ states than ex ante desirability data do. Similarly, data in terms of overall societal value (often person trade-off based) suggest much smaller values for averting moderate health problems (compared to more severe ones) than ex ante desirability data do (suggesting a need for ‘upper end compression’ of health states on the 0-1 value scale).

2. Capacity to gain health/quality of life: If A, B and C are health states, where A is considerably better than B and B is considerably better than C, what is the value of achieving C => B in one type of illness compared to achieving C => A in another type of illness?

The conventional QALY model simply assumes proportionality between value and size of benefit. The ethics literature questions this (Norman Daniels 1985 and others) and preference studies suggest that the assumption does not hold in the overall societal value interpretation, cfr the ‘realisation of potential argument’ (Nord, 1993; Pinto et al, 1998). It is a priori not obvious that the assumption holds in the context of ex ante desirability or experiential utility either. A key question to ask is: Do people’s strength of interest in

4 an outcome increase proportionally to the size of the outcome, or – alternatively – is strength of interest much determined by a desire to become as well as possible. If the latter is true, the value of C => B may not be so different from the value of C => A in the example above. This is an issue for empirical research.

3. Quality of life in life extension: What is the value of gaining a life year in health state A in one type of illness relative to gaining a year in full health in another type of illness? Is the value of life different?

The conventional QALY model simply assumes proportionality between value and quality of life. Ethical reflection suggests that the assumption is discriminatory (John Harris 1987 and others) and it has been shown that the assumption can be dropped in Outcome Valuation in the overall societal value interpretation by counting all ‘decent’ gained life years as 1 (Nord, 1999; Nord et al, 2003). It is furthermore dubious that the assumption holds in the context of ex ante desirability or experiential utility, cfr the comment on strength of interest in point 2 above. Again, this is an issue for empirical research.

4. Number of years gained: What is the value of gaining N years in one type of illness relative to gaining 1 year in another type of illness?

The conventional QALY model simply assumes proportionality between value and the number of years gained. (Discounting is applied for distance in time (see below), not for quantity.) There is some data suggesting that the proportionality assumption does not hold in the overall societal value interpretation (e.g. Dolan and Cookson, 1998) and thus that there is diminishing marginal value of gained life years as a pure quantity effect (in addition to the effect of distance in time). It is a priori not obvious that the proportionality assumption holds in the context of ex ante desirability or experiential utility either, cfr the comment on strength of interest in point 2 above.

5. Duration of QoL improvement: What is the value of achieving QoL improvement Q in an illness associated with a life expectancy of N years relative to the same improvement in an illness associated with a life expectancy of 1 year?

The conventional QALY model simply assumes proportionality between value and the duration of the QoL improvement. Objections similar to those in points 2 and 4 apply.

6. Distance in time: What is the value of obtaining a health gain (a QoL improvement or an extra life year) T years from now relative to obtaining it right away?

There is some preference data in the overall societal value interpretation (Olsen 1994 and others).

7. Other personal characteristics: What is the value of obtaining a given health gain e.g. in young people vs elderly people, in care givers vs non care givers etc?

This is relevant only in the overall societal value interpretation. There is various data suggesting that apart from age, personal characteristics should not count. The message regarding age varies across studies.

5 Tentative suggestions

One tentative suggestion is that it may not be right to look for one single type of Outcome Valuation. As noted above, policy makers may find it useful to have several types of evaluation of outcomes. Today QALYs come by way of many different procedures, and MAU-instruments like the HUI, EQ-5D, QWB, 15-D, AQOL. SF-6 often yield different values for the same health states, even though they by most potential users largely are thought to express the same thing (the same concept of value). It would probably be an improvement if it were made clear that different Outcome Valuations measure different things and if it were required of all publications that they specify which type of Outcome Valuation is being applied.

Another suggestion is that there is a need to reexamine the ideology of ‘health benefit maximisation’ by applying the concept of ‘strength of interest’. Consider again two equally severe illnesses A and B. For A there is a large outcome of treatment, while for B the outcome of treatment is more moderate, although still substantial. Which party in society has an interest in giving priority to treatment capacity for A? Assuming no difference in production effects, people allocating resources to those in need have nothing to gain by giving priority to A. Furthermore, is it obvious that those in B have a lesser interest in treatment than those in A? Is it obvious that it would be more important for people behind a veil of ignorance to be insured against A than B? If yes, how much more important? Could it be that only a slightly higher probability of B than of A would lead to a preference for insurance against B? I believe that we need to think carefully about these issues and also study them empirically rather than make assumptions about them.

References

Berg R. Establishing the values of various conditions of life for a health status index. In Berg R (ed). Health Status Indexes. Conference Proceedings Arizona 1972. Chicago 1973. Culyer T, Lavers R, Williams A. Social Indicators: Health. Social Trends 1971,2,31-42. Daniels, N. Just Health Care. Cambridge: Harvard University Press 1985. Dolan P, Cookson R. Measuring preferences over the distribution of health benefits. Mimeo. University of York, Centre for Health Economics 1998. Gold M et al. Cost-effectiveness analysis in health and medicine. New York 1996. Harris J.Qualifying the value of life. Journal of Medical Ethics 1987,13,117-123. Hawthorne G, Richardson J, Osborne R, McNeil H. The assessment of Quality of Life (AQOL) Instrument. Working paper 76. Melbourne: Centre for Health Program Evaluation 1997. Menzel P. Strong Medicine. Oxford University Press 1990. Nord E. Methods for quality adjustment of life years. Social Science & Medicine 1992,34,559-569. Nord E. The relevance of health state after treatment in prioritising between patients. Journal of Medical Ethics 1993, 19,37-42. Nord E. Cost value analysis in health care. Cambridge University Press 1999. Nord E, Menzel P, Richardson J. The value of life: individual preferences and social choice. A comment to Magnus Johannesson. Health Economics 2003,12,873-877. Olsen JA. Person vs years: two ways of eliciting implicit weights. Health Economics 3,39-46.

6 Pinto JL. Is the person trade-off a valid method for allocating health care resources? Health Economics 1997,6,71-81. Pinto JL, Perpinan J. Health state after treatment: A reason for discrimination? Health Economics 1998. Richardson J. Cost-utility analysis: What should be measured? Social Science & Medicine 1994,39,7-21. Rosser R, Kind P. A scale of valuations of states of illness. Internations Journal of Epidemiology 1978,7,347-358. Sintonen H. An approach to measuring and valuing health states (12-D). Social Science & Medicine 1981,15c,55-65.. The EuroQol Group. EuroQol – a new facility for the measurement of health related quality of life. Health Policy 1990,16,199-208. Torrance G, Boyle M, Horwood S. Application of multi-attribute utility theory to measure social preferences for health states. Operations Research 1982,30,1043-1069. Ubel P et al. Individual utilities are inconsistent with rationing choices. Medical Decision Making 1996,16,108-116. Weinstein M, Stason W. Foundations of cost-effectiveness analysis.. New England Journal of Medicine 1977, 296, 716-721. Williams A. Intergenerational equity: An exploration of the ‘fair innings’ argument. Health Economics 1997,6,117-132.