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Double discounting of QALYs

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Author Info

  • Linda D. MacKeigan

    (Faculty of Pharmacy, University of Toronto, Toronto, Canada)

  • Amiram Gafni
  • Bernie J. O'Brien
Registered author(s):

    Abstract

    Quality-adjusted life-years (QALYs) calculated from time tradeoff (TTO) based preferences have a time preference component. To impose a conventional discount rate on these implicitly discounted QALYs introduces some degree of double discounting. The purpose of this study was to determine the magnitude of the double discounting effect and the effectiveness of a suggested method for avoiding double discounting in a TTO-based QALY model. Our analysis used holistic and composite preference scores obtained with the TTO technique in a prior study of four hypothetical treatment paths in type 2 diabetes. Discounted composite preference scores were significantly discrepant from holistic preference scores. Adjusting TTO-based quality weights prior to external discounting reduced the discrepancy only slightly. Since time preference effects may vary with health state context, the double discounting effect needs further investigation. Copyright © 2002 John Wiley & Sons, Ltd.

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    File URL: http://hdl.handle.net/10.1002/hec.718
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    Bibliographic Info

    Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

    Volume (Year): 12 (2003)
    Issue (Month): 2 ()
    Pages: 165-169

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    Handle: RePEc:wly:hlthec:v:12:y:2003:i:2:p:165-169

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    Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    References

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    1. Bleichrodt, Han & Gafni, Amiram, 1996. "Time preference, the discounted utility model and health," Journal of Health Economics, Elsevier, vol. 15(1), pages 49-66, February.
    2. Marjon M. Van Der Pol & John A. Cairns, 2000. "Negative and zero time preference for health," Health Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 171-175.
    3. Bleichrodt, Han & Johannesson, Magnus, 1997. "Standard gamble, time trade-off and rating scale: Experimental results on the ranking properties of QALYs," Journal of Health Economics, Elsevier, vol. 16(2), pages 155-175, April.
    4. Mehrez, Abraham & Gafni, Amiram, 1990. "Evaluating health related quality of life: An indifference curve interpretation for the time trade-off technique," Social Science & Medicine, Elsevier, vol. 31(11), pages 1281-1283, January.
    5. Hammitt, James K., 1993. "Discounting health increments," Journal of Health Economics, Elsevier, vol. 12(1), pages 117-120, April.
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    Cited by:
    1. José Mª Abellán & José Luis Pinto & Ildefonso Méndez & Xabier Badía, 2004. "A test of the predictive validity of non-linear QALY models using time trade-off utilities," Economics Working Papers 741, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Attema, Arthur & Brouwer, Werner, 2012. "Deriving time discounting correction factors for TTO tariffs," MPRA Paper 37002, University Library of Munich, Germany.
    3. Attema, Arthur E. & Brouwer, Werner B.F., 2009. "The correction of TTO-scores for utility curvature using a risk-free utility elicitation method," Journal of Health Economics, Elsevier, vol. 28(1), pages 234-243, January.
    4. Marjon Pol & Larissa Roux, 2005. "Time preference bias in time trade-off," The European Journal of Health Economics, Springer, vol. 6(2), pages 107-111, June.
    5. José-Mar�a Abellán-Perpi�án & José-Luis Pinto-Prades & Ildefonso Méndez-Mart�nez & Xabier Bad�a-Llach, 2006. "Towards a better QALY model," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 665-676.

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