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

Mike Paulden and Anthony Culyer
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Mike Paulden: Toronto Health Economics and Technology Assessment (THETA) Collaborative, University of Toronto, Canada

Working Paper series from Rimini Centre for Economic Analysis

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.

Date: 2010-01
New Economics Papers: this item is included in nep-age and nep-hea
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