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Write a critical summary of the paper, including the key points, such as its motivation, its hypothesis, the data used, the methods used to analyse those data, and the outcome/result of this analysis.

Also state its relevant policy implications and discuss its limitations.

HEALTH ECONOMICS; Health Econ.

THINKING ABOUT IT: THOUGHTS ABOUT HEALTH

AND VALUING QALYs

PAUL DOLAN

Department of Social Policy, London School of Economics and Political Science, London, UK

SUMMARY

When valuing health states (e.g. for use in the assessment of health technologies), health economists often ask

respondents how many years of life in poor health they would be willing to trade-off in order to live in full health.

Problems with preferences of this kind have led to calls for the use of more direct measures of the utility associated

with experiencing a health state. The fact remains, however, that individuals are often willing to make large

sacrifices in life expectancy to alleviate conditions for which there appears to be a considerable degree of hedonic

adaptation. The purpose of this study is to investigate this important discrepancy in more detail. Data from 1173

internet and telephone surveys in the United States suggest that time trade-off responses are related to the frequency

and intensity of negative thoughts about health in ways that may not be very well captured by any of the proposed

valuation methods. Copyright

r

2010 John Wiley & Sons, Ltd.

Received 18 August 2009; Revised 19 June 2010; Accepted 24 August 2010

KEY WORDS:

quality-adjusted life years; time trade-off; experienced utility

1. INTRODUCTION

Decisions about who gets what treatment should be informed by the value of the benefits that health

services generate. The question is how to judge the value of those benefits. Until about 100 years ago,

economists would have thought about benefits in terms of people’s experiences – the greater the gains in

an individual’s enjoyment of an outcome, the greater the benefit (Edgeworth, 1881). More recently, they

have thought about benefits in terms of preferences – the stronger an individual’s preference for that

outcome, the greater the benefit (Fisher, 1918). The two definitions amount to the same thing if people

want most what they will eventually enjoy best and this is a common, albeit often implicitly made,

assumption in economics. It is also descriptively flawed (Dolan and Kahneman, 2008). Since we value

health using preference-based methods and since we may wish to know what effect health interventions

have on people’s experiences, we need further enquiry into the difference between strength of preference

and intensity of experience.

Methods have been developed for valuing states of health that are based on preferences and which

allow for the calculation of quality-adjusted life years (QALYs). The QALY approach assigns a weight

between 0 (for death) and 1 (for full health) to each state of health and then multiplies that value by how

long the state lasts. QALYs are increasingly being used by health technology assessment agencies to

help determine the relative cost-effectiveness of different interventions e.g. they are used by the National

Institute for Health and Clinical Excellence (NICE) in the UK. There are three main questions that need

*Correspondence to: Department of Social Policy, London School of Economics and Political Science, Houghton Street, London

WC2A 2AE, UK. E-mail: p.h.dolan@lse.ac.uk

Copyright

r

2010 John Wiley & Sons, Ltd.

to be aIDressed to calculate the ‘quality adjustment’ part of the QALY:

what

is to be valued;

how

is it to

be valued; and

who

is to value it (Dolan, 2000)?

The choice of

what

refers to the dimensions of health or well-being being considered. Most health

economists would recommend using an established generic measure of health that is designed

specifically for generating QALYs. One such descriptive system is the EQ-5D, which describes health in

terms of three levels (broadly, no problems, some problems and extreme problems) for each of five

dimensions (mobility, self-care, usual activities, pain/discomfort and anxiety/depression). The choice of

how

refers to the ways in which the health states are valued so that they lie on a 0–1 scale. One of the

most widely used preference-based methods is the time trade-off (TTO), which requires respondents to

consider how many years in full health are equivalent to a longer period of time in a poor health state.

The choice of

who

refers to the source of health state values, such as ‘patients’ experiencing a particular

state or the ‘public’ asked to imagine it.

A set of valuations for the EQ-5D have been estimated from the responses to hypothetical TTO

questions of a representative sample of over 3000 members of the UK general population (Dolan, 1997).

NICE recommends that patients describe their own health using the EQ-5D and that the population

valuation set be used to determine the number of QALYs associated with any change in health state as a

result of intervention. These recommendations are also being followed in other countries (e.g. Australia

and Canada), and are broadly consistent with the current emphasis in economics on an account of well-

being that is based on the satisfaction of preferences.

It is increasingly recognised that a person’s preferences at time 0 are often a poor guide to that

person’s preferences at time 1 (see Loewenstein and Angner, 2003 for a good review). Although very few

longitudinal studies exist, we do find in the health state valuation literature that members of the general

public (analogous with an assessment at

t

5

0 before circumstances change) generally consider most

adverse health states to be more severe than do those in the states (an assessment at

t

5

1) (de Wit

et al

.,

2000). Beyond this, there is also good evidence to suggest that the strength of preference is often a poor

guide to the intensity of experience (Schkade and Kahneman, 1998; Wilson and Gilbert, 2003). This is

partly because we exaggerate the extent to which we will attend to the state being valued (Dolan and

Kahneman, 2008) and we are all (‘public’ and ‘patients’) susceptible to exaggeration.

Imagine being asked to value walking with a cane. It is almost impossible to avoid imagining that as

you walk you will be thinking about the cane much of the time when, in fact, the cane will rarely be the

focus of your attention, especially as time passes. Focussing effects are an issue for any preference

elicitation question for any population, including those with experience of the condition, since what we

focus on in the question may not be focussed on the same extent in the experience of our lives. A person

who walks with a cane who is asked to imagine having their walking restrictions alleviated will

inevitably imagine actively enjoying the freedom of normal walking, which they may quickly take for

granted.

This is not to say that walking with a cane will not have any effect on utility but, rather, that its effect

is likely to be considerably less than we think about it being. As Adam Smith noted over 250 years ago:

‘The great source of both the misery and disorders of human life seems to arise from over-rating the

difference between one permanent situation and another’ (Smith, 1759). This may generally be true but

some things, like the effects of prolonged and unexplained pain (Peters

et al

., 2000), may perhaps turn

out to be worse than we imagine them to be. The important general point is that the focus of attention

that drives our strength of our preferences is different from the focus of attention that explains the

intensity of our experiences.

Partly in response to such problems, increasing interest is being shown in the direct assessment of

experienced utility, as approximated by the flow of feelings during the day (Dolan and Kahneman,

2008). The day reconstruction method (DRM), for example, has been specifically designed to measure

experienced utility in this way (Kahneman

et al

., 2004). The DRM asks respondents to divide the

previous day into a number of episodes and then to rate different feelings during those activities. Any

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