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Does Cost-Effectiveness Analysis Discriminate against Patients with Short Life Expectancy?

Author

Listed:
  • Mike Paulden

    (Toronto Health Economics and Technology Assessment (THETA) Collaborative, University of Toronto, Canada)

  • Anthony J. Culyer

    (Department of Health Policy, Management and Evaluation, University of Toronto, Canada; Department of Economics and Related Studies, University of York, UK; Centre for Health Economics, University of York, UK; The Rimini Centre for Economic Analysis (RCEA), Italy)

Abstract

Does the use of quality-adjusted life-years (QALYs) in cost-effectiveness analyses (CEAs) of health care interventions necessarily discriminate against patients with short life expectancy compared with others? This paper reviews the arguments both that it does and that it does not, and demonstrates that whether the use of any time-dependent outcome measure in CEA will result in discrimination depends, in the context of any given choice between interventions, upon the choice of cost-effectiveness ‘threshold’ adopted by the decision maker, whether the incremental cost-effectiveness ratio (ICER) of the intervention for a subgroup of patients with relatively short life expectancy lies above the cost-effectiveness threshold, and whether the ICER for a subgroup of patients with longer life expectancy falls below the cost-effectiveness threshold. For discrimination to result against such patients requires that the long term ratio of costs to QALYs associated with the intervention be lower than the short term ratio of costs to QALYs. The implications for agencies which use CEA as part of their decision making are then discussed.

Suggested Citation

  • Mike Paulden & Anthony J. Culyer, 2010. "Does Cost-Effectiveness Analysis Discriminate against Patients with Short Life Expectancy?," Working Paper series 41_10, Rimini Centre for Economic Analysis.
    • Handle: RePEc:rim:rimwps:41_10
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    References listed on IDEAS

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    1. Hugh Gravelle & Werner Brouwer & Louis Niessen & Maarten Postma & Frans Rutten, 2007. "Discounting in economic evaluations: stepping forward towards optimal decision rules," Health Economics, John Wiley & Sons, Ltd., vol. 16(3), pages 307-317, March.
    2. Mike Paulden & Karl Claxton, 2012. "Budget allocation and the revealed social rate of time preference for health," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 612-618, May.
    3. Karl Claxton & Mike Paulden & Hugh Gravelle & Werner Brouwer & Anthony J. Culyer, 2011. "Discounting and decision making in the economic evaluation of health‐care technologies," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 2-15, January.
    4. Karl Claxton & Mark Sculpher & Anthony Culyer & Chris McCabe & Andrew Briggs & Ron Akehurst & Martin Buxton & John Brazier, 2006. "Discounting and cost‐effectiveness in NICE – stepping back to sort out a confusion," Health Economics, John Wiley & Sons, Ltd., vol. 15(1), pages 1-4, January.
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    Cited by:

    1. Round, Jeff, 2012. "Is a QALY still a QALY at the end of life?," Journal of Health Economics, Elsevier, vol. 31(3), pages 521-527.
    2. Mike Paulden & James O’Mahony & Anthony Culyer & Christopher McCabe, 2014. "Some Inconsistencies in NICE’s Consideration of Social Values," PharmacoEconomics, Springer, vol. 32(11), pages 1043-1053, November.

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