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Double discounting of QALYs

  • Linda D. MacKeigan

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

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

    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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    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
    Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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    1. Amiram Gafni & George W. Torrance, 1984. "Risk Attitude and Time Preference in Health," Management Science, INFORMS, vol. 30(4), pages 440-451, April.
    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. Hammitt, James K., 1993. "Discounting health increments," Journal of Health Economics, Elsevier, vol. 12(1), pages 117-120, April.
    4. 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.
    5. 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.
    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.
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