Okay – so just what exactly is a Quality Adjusted Life Year (QALY)?
“A QALY scores your health on a scale from zero to one: zero if you're dead and one if you're in perfect health. You find out as a result of a treatment where a patient would move up the scale. If you do a hip replacement, the patient might start at .5 and go up to .7, improving by .2. You can assume patients live for an average of 15 years following hip replacements. And .2 times 15 equals three quality-adjusted life years. If the hip replacement costs 10,000 GBP to do [about $15,000], it's 10,000 divided by three, which equals 3,333 GBP [about $5,000]. That figure is the cost per QALY."
So, how much is a year of life worth?
"The most controversial area is where you place the dividing line between what is cost effective and what is cost ineffective. That is the "how much is life worth?" question. And there is no real empirical research to guide you. We have looked at what other government departments do. Our Department of Transport, for instance, has a cost-per-life-saved threshold for new road schemes of about about 1.5 million-pounds-per-life, or around 30,000 GBP per life year gained. The judgment of our health economists is that somewhere in the region of 20,000-30,000 GBP per Quality-Adjusted Life Year (QALY) is the [threshold], but it's not a strict limit."
That's a tough decision to make for bureaucrats, is it not?
"For many difficult questions, we capture public preferences by our citizens council, a representative sample drawn from the general public. For example we asked if should we give greater priority to children than the elderly. The group decided that a year of life was worth just as much when you are a grandparent as when you are a child. That is very culturally specific and might not apply to other countries in the world."
Thanks Sir Michael.
But, according to Dr. Frank Lichtenberg of Columbia University, for a healthcare technology assessment (HTA) scheme (such as the NICE model) to yield valid decisions in practice, it is necessary to have reliable estimates of:
ΔCOST
ΔQALY
and VSLY (Value of a Statistical Life Year)
And his main point is that the devil is in the details.
Lichtenberg believes that incorrect estimates of some or all of these key inputs are often used:
ΔCOST is frequently overestimated
ΔQALY and VSLY are frequently underestimated
And due to these estimation biases, health technologies that are truly cost-effective may often be rejected as cost-ineffective.
Per the recent debate over the utility of new cancer treatments, he makes a very interesting point -- that even though, over the past 30 years, the U.S. Mortality Age-Adjusted Rates for cancer have remained relatively constant -- (leading to such mainstream media headlines as Fortune Magazine's "Why have we made so little progress in the War on Cancer?” and NEJM articles like "The effect of new treatments for cancer on mortality has been largely disappointing” -- the often ignored reality is that 5-year relative survival rates, for all cancer sites, have increased from 50.1% in 1975 to 65.9% in 2000.
Lichtenberg cites two crucial studies, pointing out how health care economists must seriously reconsider the outdated estimates of a QALY:
Viscusi and Aldy: The value of a statistical life for prime-aged workers has a median value of about $7 million in the United States
Viscusi, W. Kip and Joseph E. Aldy, “The Value of a Statistical Life: A Critical Review of Market Estimates Throughout the World,” The Journal of Risk and Uncertainty, 27:1; 5–76, 2003.
and
Murphy and Topel: The value of a life year is $373,000.
Murphy, Kevin M., and Robert H. Topel, “The value of health and longevity,” Journal of Political Economy, 2006.
Attention must be paid. Hello NICE. Hello IQWiG. Hello Senators Baucus and Conrad.
If the devil is in the details (and it is) -- it's time for a deep dive beyond simplistic and self-serving "comparative effectiveness."
