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Valuing the benefits and costs of health care programmes: where's the 'extra' in extra-welfarism?

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  • Birch, Stephen
  • Donaldson, Cam

Abstract

The application of Sen's notion of capabilities to problems of the allocation of resources to health in the form of an extra-welfarist framework underlies the justification of quality adjusted life years (QALYs) as the method for valuing the benefits of health care. In this paper we critically appraise this application from both conceptual and empirical perspectives. We show that the alleged limitations of the welfarist approach are essentially limitations in its application, not in the capacity of the approach to accommodate the concerns of extra-welfarists. Moreover, the arguments used to justify the application of the extra-welfarist framework are essentially welfarist. We demonstrate that the methods used to measure QALYs share their basic theoretical roots with welfarist valuation methods, such as willingness to pay (WTP). Although QALYs and WTP share many challenges, we argue that WTP provides a method which performs better with respect to those challenges. In the context of evaluating alternative allocations of health care resources we are left asking what is 'extra' in extra-welfarism?

Suggested Citation

  • Birch, Stephen & Donaldson, Cam, 2003. "Valuing the benefits and costs of health care programmes: where's the 'extra' in extra-welfarism?," Social Science & Medicine, Elsevier, vol. 56(5), pages 1121-1133, March.
  • Handle: RePEc:eee:socmed:v:56:y:2003:i:5:p:1121-1133
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The potential of the super QALY to reconcile the key contentions in health economics
      by Chris Sampson in The Academic Health Economists' Blog on 2013-05-20 11:54:41

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    Cited by:

    1. Buckingham, Ken J. & Devlin, Nancy Joy, 2009. "A note on the nature of utility in time and health and implications for cost utility analysis," Social Science & Medicine, Elsevier, vol. 68(2), pages 362-367, January.
    2. Anand, Paul & Dolan, Paul, 2005. "Equity, capabilities and health," Social Science & Medicine, Elsevier, vol. 60(2), pages 219-222, January.
    3. Jennifer Whitty & Emily Lancsar & Kylie Rixon & Xanthe Golenko & Julie Ratcliffe, 2014. "A Systematic Review of Stated Preference Studies Reporting Public Preferences for Healthcare Priority Setting," The Patient: Patient-Centered Outcomes Research, Springer;Johns Hopkins Bloomberg School of Public Health, vol. 7(4), pages 365-386, December.
    4. Gregory Merlo & Katie Page & Julie Ratcliffe & Kate Halton & Nicholas Graves, 2015. "Bridging the Gap: Exploring the Barriers to Using Economic Evidence in Healthcare Decision Making and Strategies for Improving Uptake," Applied Health Economics and Health Policy, Springer, vol. 13(3), pages 303-309, June.
    5. Wildman, John & McMeekin, Peter & Grieve, Eleanor & Briggs, Andrew, 2016. "Economic evaluation of integrated new technologies for health and social care: Suggestions for policy makers, users and evaluators," Social Science & Medicine, Elsevier, vol. 169(C), pages 141-148.
    6. Gafni, Amiram & Birch, Stephen, 2006. "Incremental cost-effectiveness ratios (ICERs): The silence of the lambda," Social Science & Medicine, Elsevier, vol. 62(9), pages 2091-2100, May.
    7. David Whynes & Emma Frew & Jane Wolstenholme, 2005. "Willingness-to-Pay and Demand Curves: A Comparison of Results Obtained Using Different Elicitation Formats," International Journal of Health Economics and Management, Springer, vol. 5(4), pages 369-386, December.
    8. Mooney, Gavin, 2005. "Communitarian claims and community capabilities: furthering priority setting?," Social Science & Medicine, Elsevier, vol. 60(2), pages 247-255, January.
    9. Herlitz, Anders & Horan, David, 2016. "Measuring needs for priority setting in healthcare planning and policy," Social Science & Medicine, Elsevier, vol. 157(C), pages 96-102.
    10. Coast, Joanna & Smith, Richard D. & Lorgelly, Paula, 2008. "Welfarism, extra-welfarism and capability: The spread of ideas in health economics," Social Science & Medicine, Elsevier, vol. 67(7), pages 1190-1198, October.
    11. Richard Smith & Paula Lorgelly & Hareth Al-Janabi & Sridhar Venkatapuram & Joanna Coast, 2012. "The Capability Approach: An Alternative Evaluation Paradigm for Health Economics?," Chapters,in: The Elgar Companion to Health Economics, Second Edition, chapter 39 Edward Elgar Publishing.
    12. Sanghera, Sabina & Frew, Emma & Kai, Joe & Gupta, Janesh & Elizabeth Roberts, Tracy, 2013. "An assessment of economic measures used in menorrhagia: A systematic review," Social Science & Medicine, Elsevier, vol. 98(C), pages 149-153.
    13. Mitchell, Paul Mark & Roberts, Tracy E. & Barton, Pelham M. & Coast, Joanna, 2015. "Assessing sufficient capability: A new approach to economic evaluation," Social Science & Medicine, Elsevier, vol. 139(C), pages 71-79.
    14. Richard D. Smith & Tracey H. Sach, 2009. "Contingent valuation: (still) on the road to nowhere?," Health Economics, John Wiley & Sons, Ltd., vol. 18(8), pages 863-866.
    15. Coast, Joanna, 2009. "Maximisation in extra-welfarism: A critique of the current position in health economics," Social Science & Medicine, Elsevier, vol. 69(5), pages 786-792, September.

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