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A Note on QALYs, Time Tradeoff, and Discounting

Author

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  • Magnus Johannesson
  • Joseph S. Pliskin
  • Milton C. Weinstein

Abstract

The theoretical model of QALYs is based on risk neutrality with respect to life years or constant proportional risk posture with respect to life years. It is shown that discounting of QALYs is inconsistent with these assumptions. For discounting to be consistent with individual preferences in a QALY model, individuals have to be risk-neutral with respect to discounted life years or exhibit constant proportional risk posture with respect to discounted life years. For the time-tradeoff method to be consistent with these assumptions, the QALY weights have to be derived by dividing the number of discounted life years in full health by the number of discounted life years in the assessed health states. Key words: quality-adjusted life years; discounting; time tradeoff; standard gamble; individual preferences. (Med Decis Making 1994;14:188-193)

Suggested Citation

  • Magnus Johannesson & Joseph S. Pliskin & Milton C. Weinstein, 1994. "A Note on QALYs, Time Tradeoff, and Discounting," Medical Decision Making, , vol. 14(2), pages 188-193, April.
    • Handle: RePEc:sae:medema:v:14:y:1994:i:2:p:188-193
    DOI: 10.1177/0272989X9401400212
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    References listed on IDEAS

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    Cited by:

    1. Arthur E. Attema & Werner B.F. Brouwer, 2014. "Deriving Time Discounting Correction Factors For Tto Tariffs," Health Economics, John Wiley & Sons, Ltd., vol. 23(4), pages 410-425, April.
    2. Edward C. Mansley & Elamin H. Elbasha, 2003. "Preferences and person trade‐offs: forcing consistency or inconsistency in health‐related quality of life measures?," Health Economics, John Wiley & Sons, Ltd., vol. 12(3), pages 187-198, March.
    3. José‐María Abellán‐Perpiñán & José‐Luis Pinto‐Prades & Ildefonso Méndez‐Martínez & Xabier Badía‐Llach, 2006. "Towards a better QALY model," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 665-676, July.
    4. Floortje van Nooten & Werner Brouwer, 2004. "The influence of subjective expectations about length and quality of life on time trade‐off answers," Health Economics, John Wiley & Sons, Ltd., vol. 13(8), pages 819-823, August.
    5. Blumenschein, Karen & Johannesson, Magnus, 1996. "Incorporating quality of life changes into economic evaluations of health care: an overview," Health Policy, Elsevier, vol. 36(2), pages 155-166, May.
    6. 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.
    7. Mara Airoldi & Alec Morton, 2009. "Adjusting life for quality or disability: stylistic difference or substantial dispute?," Health Economics, John Wiley & Sons, Ltd., vol. 18(11), pages 1237-1247, November.
    8. Oliver, Adam & Wolff, Jonathan, 2014. "Are people consistent when trading time for health?," Economics & Human Biology, Elsevier, vol. 15(C), pages 41-46.
    9. Johannesson, Magnus, 1995. "Quality-adjusted life-years versus healthy-years equivalents -- A comment," Journal of Health Economics, Elsevier, vol. 14(1), pages 9-16, May.
    10. Christian R. C. Kouakou & Thomas G. Poder, 2022. "Willingness to pay for a quality-adjusted life year: a systematic review with meta-regression," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(2), pages 277-299, March.
    11. Linda D. MacKeigan & Amiram Gafni & Bernie J. O'Brien, 2003. "Double discounting of QALYs," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 165-169, February.
    12. Paul F M Krabbe, 2013. "A Generalized Measurement Model to Quantify Health: The Multi-Attribute Preference Response Model," PLOS ONE, Public Library of Science, vol. 8(11), pages 1-12, November.
    13. Arthur E. Attema & Marieke Krol & Job Exel & Werner B. F. Brouwer, 2018. "New findings from the time trade-off for income approach to elicit willingness to pay for a quality adjusted life year," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 19(2), pages 277-291, March.
    14. John Mullahy, 2001. "Live long, live well: quantifying the health of heterogeneous populations," Health Economics, John Wiley & Sons, Ltd., vol. 10(5), pages 429-440, July.
    15. Kvamme, Maria Knoph & Gyrd-Hansen, Dorte & Olsen, Jan Abel & Kristiansen, Ivar Sønbø, 2010. "Increasing marginal utility of small increases in life-expectancy?: Results from a population survey," Journal of Health Economics, Elsevier, vol. 29(4), pages 541-548, July.
    16. Bleichrodt, Han & Pinto, Jose Luis & Maria Abellan-Perpinan, Jose, 2003. "A consistency test of the time trade-off," Journal of Health Economics, Elsevier, vol. 22(6), pages 1037-1052, November.
    17. Bert Wee & Piet Rietveld, 2013. "Using value of statistical life for the ex ante evaluation of transport policy options: a discussion based on ethical theory," Transportation, Springer, vol. 40(2), pages 295-314, February.
    18. Joshua A. Salomon & Christopher J.L. Murray, 2004. "A multi‐method approach to measuring health‐state valuations," Health Economics, John Wiley & Sons, Ltd., vol. 13(3), pages 281-290, March.
    19. 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.
    20. Kristian Schultz Hansen & Lars Peter Østerdal, 2006. "Models of Quality‐Adjusted Life Years when Health Varies Over Time: Survey and Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 229-255, April.
    21. Marjon Pol & Larissa Roux, 2005. "Time preference bias in time trade-off," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 6(2), pages 107-111, June.
    22. John M. Miyamoto & Peter P. Wakker & Han Bleichrodt & Hans J. M. Peters, 1998. "The Zero-Condition: A Simplifying Assumption in QALY Measurement and Multiattribute Utility," Management Science, INFORMS, vol. 44(6), pages 839-849, June.
    23. Bengt Liljas & Göran S. Karlsson & Nils‐Olov Stålhammar, 2008. "On future non‐medical costs in economic evaluations," Health Economics, John Wiley & Sons, Ltd., vol. 17(5), pages 579-591, May.
    24. Han Bleichrodt, 2002. "A new explanation for the difference between time trade‐off utilities and standard gamble utilities," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 447-456, July.
    25. Lisa Prosser & James Hammitt & Ron Keren, 2007. "Measuring Health Preferences for Use in Cost-Utility and Cost-Benefit Analyses of Interventions in Children," PharmacoEconomics, Springer, vol. 25(9), pages 713-726, September.

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