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A note on the nature of utility in time and health and implications for cost utility analysis

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Author Info
Ken Buckingham (Department of Preventive and Social Medicine, University of Otago, New Zealand)
Nancy Devlin () (Department of Economics, City University, London)

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Abstract

Time Trade-Off valuations of health are widely used in economic evaluation of health care. Current approaches to eliciting TTO values, and their use in economic evaluation, rests on specific assumptions about the way utility relates to time and health. Both the assumptions themselves and evidence of violations of them are discussed in the literature - yet the issues appear not to be widely appreciated by those using and applying TTO. This paper adds to that literature by demonstrating both the requirements of TTO and violations of these assumptions in terms of the underlying indifference curve maps and utility functions. The advantage of this approach is that is demonstrates very clearly a number of fundamental problems for the way TTO values are currently elicited and used in Cost Utility Analysis. In essence, it is extremely unwise to assume that the current ‘tariffs’ of TTO values, such as those routinely used by NICE and other organisations, can be applied irrespective of the duration of the health states to which they are assigned. The estimates of QALYs that result will, quite often, simply be wrong. We suggest a number of solutions, including the provision of multiple value sets, for a range of durations.

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Publisher Info
Paper provided by Department of Economics, City University, London in its series City University Economics Discussion Papers with number 08/02.

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Length: 27 pages
Date of creation: Feb 2008
Date of revision:
Handle: RePEc:cty:dpaper:0802

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Related research
Keywords: TTO; utility; QALYs; maximal endurable time;

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References listed on IDEAS
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  1. Angela Robinson & Anne Spencer, 2006. "Exploring challenges to TTO utilities: valuing states worse than dead," Health Economics, John Wiley & Sons, Ltd., vol. 15(4), pages 393-402. [Downloadable!]
  2. Ken Buckingham & Nancy Devlin, 2006. "A theoretical framework for TTO valuations of health," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1149-1154. [Downloadable!]
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