Quality Adjusted Life Years Notes for November 12

Main points

If we are going to ration health care, it would be nice if we had a way of comparing different options, where options range over treatments, technologies, institutions (shall we build a children’s hospital or a geriatric care center?), and policies.

It would also be nice if this method of comparison seemed relevant to the aims of health care. Money has some advantages. We use it to price most other things and it’s neutral because it isn’t valued for itself. But we have never been fully comfortable with using it to measure the value of health care: think back to Williams.

Enter the Quality Adjusted Life Year or QALY. The QALY measures the two basic things we want out of health care: longer life and higher quality life, ideally at the same time.

We talked about how to measure quality and some of the difficulties with using QALYs to make rationing decisions.

Does quality ever matter?

One very controversial kind of rationing decision involves decisions to enhance the quality of some peoples’ lives rather than saving others’ lives. How could an improvement for one be more important than continued life for someone else?

Perhaps we should give priority to saving lives. Only after we have saved all the lives that we can should we devote health care resources to improving the quality of life for others. Nose jobs, hip replacements, cataract surgeries … they all have to wait.

We noted at least three problems with this priority rule. First, the life saving options may have only very low prospects of saving lives. Second, the lives saved may not last long. Third, the lives saved may be of very low quality. In all cases, we wondered whether it would make sense to prefer trying to save lives rather than enhancing the quality of life.

When we make decisions about our own lives, we’re willing to trade some kinds of life saving for enhancements in the quality of our lives.

But is that fact about individual decision making relevant to social decisions? It might be if we think of the social health insurance system as reflecting our choices about what coverage we want. Then our preferences for our own lives would be reflected in the social insurance scheme.

However, we don’t have a social insurance system that we all explicitly buy into. Rather, as Kyle pointed out, we’re using surveys to attribute preferences to people so we can presume their consent to rationing decisions. That’s a lot of steps, generalizations, and presumptions. Does all of that make sense?

Let’s break that down into two questions. First, using that method, would it ever make sense to count quality of life in addition to quantity? Second, could we use that method to make definite decisions about rationing?

I strongly suspect that the answer to the first question is yes. I think that almost all of us think that quality matters in addition to quantity. So far so good. But that isn’t enough to help us make any policy decisions: quality matters, but what do people think quality consists in and how much do they think it matters?

Assume that the surveys cover a representative, informed set of the population. Even so, averages won’t be good enough. If the answers vary widely, we couldn’t presume that very many people consent to the average answers. Rather, what we need is for answers to strongly cluster. We can only presume consent if the overwhelming majority make roughly the same choices about quality and its importance.

Do answers cluster? Got me. I think that’s the important question, though.

Forecasting and bias

We met up with our old friends, hedonic forecasting errors and their cousin adaptive preferences. These account for significant variations in the assessments of the quality of life with a chronic handicap. That much seems obvious. The thorny question is what it means.

Menzel asked whether including the answers of healthy people biased the results. But you could ask about how seriously to take the answers of people who have experienced the condition as well. Most of us think that a paralyzed person is worse off than a non-paralyzed person, even if the paralyzed person is about as happy as someone who won the lottery. If we let that person’s assessment determine our response, we wouldn’t devote any special attention to his condition. But that strikes me as wrong.

As Alex and Professor Brown pointed out, a paralyzed person may be perfectly content with his condition but still prefer not to have it. So there is a bit of tension between two measures of subjective well-being: feelings of happiness and preferences. According to the first measure, the paralyzed person should be indifferent between being paralyzed and not being paralyzed. According to the second measure, this is definitely not so.

Mechanical applications

The application of any rule in a mechanical fashion will produce odd results. We saw this earlier, where a simplistic priority for life saving lead to decisions that do not make much sense.

Something similar is true with QALYs. If you just try to maximize QALYs, you’ll favor saving one life for six years rather than seven lives for one year apiece. Or you’ll think that it makes sense to give a sixty year old eleven more years of life rather than ten more years to a twenty year old.

If you don’t think those decisions are obviously wrong, just push the numbers a little farther until you get a result that strikes you that way.

Young, old, and middle-aged

We didn’t have time to discuss the question of whether to give preference to the young over the old at great length. You can find lots of thought provoking stuff in the handout’s bibliography.

Nonetheless, we did get one extremely interesting and, to my ears, utterly novel, remark from Prof. Brown. She pointed out that the categories of young and old are too simple. What matters are how those years fit into our lives.

So, for instance, she said that she would much rather die young or old than to die before her children were grown up. So she, at least, has a preference for middle age over all the others.

Aside from the intrinsic interest of that remark, it greatly favors me in these sorts of rationing decisions. So I’m all for it!

This page was written by Eleanor Brown and Michael Green for Freedom, Markets, and Well-Being, PPE 160, Fall 2007.
Freedom, Markets, and Well-Being