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When does quality‐adjusting life‐years matter in cost‐effectiveness analysis?

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  • Richard H. Chapman
  • Marc Berger
  • Milton C. Weinstein
  • Jane C. Weeks
  • Sue Goldie
  • Peter J. Neumann

Abstract

Purpose: This paper investigates the impact of quality‐of‐life adjustment on cost‐effectiveness analyses, by comparing ratios from published studies that have reported both incremental costs per (unadjusted) life‐year and per quality‐adjusted life‐year for the same intervention. Methods: A systematic literature search identified 228 original cost–utility analyses published prior to 1998. Sixty‐three of these analyses (173 ratio pairs) reported both cost/LY and cost/QALY ratios for the same intervention, from which we calculated medians and means, the difference between ratios (cost/LY minus cost/QALY) and between reciprocals of the ratios, and cost/LY as a percentage of the corresponding cost/QALY ratio. We also compared the ratios using rank‐order correlation, and assessed the frequency with which quality‐adjustment resulted in a ratio crossing the widely used cost‐effectiveness thresholds of $20000, $50000, and $100000/QALY or LY. Results: The mean ratios were $69100/LY and $103100/QALY, with corresponding medians of $24600/LY and $20400/QALY. The mean difference between ratios was approximately −$34300 (median difference: $1300), with 60% of ratio pairs differing by $10000/year or less. Mean difference between reciprocals was 59 (QA)LYs per million dollars (median: 2.1). The Spearman rank‐order correlation between ratio types was 0.86 (p

Suggested Citation

  • Richard H. Chapman & Marc Berger & Milton C. Weinstein & Jane C. Weeks & Sue Goldie & Peter J. Neumann, 2004. "When does quality‐adjusting life‐years matter in cost‐effectiveness analysis?," Health Economics, John Wiley & Sons, Ltd., vol. 13(5), pages 429-436, May.
    • Handle: RePEc:wly:hlthec:v:13:y:2004:i:5:p:429-436
    DOI: 10.1002/hec.853
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    References listed on IDEAS

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    1. Gerard, Karen, 1992. "Cost-utility in practice: A policy maker's guide to the state of the art," Health Policy, Elsevier, vol. 21(3), pages 249-279, July.
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    3. Garber, Alan M. & Phelps, Charles E., 1997. "Economic foundations of cost-effectiveness analysis," Journal of Health Economics, Elsevier, vol. 16(1), pages 1-31, February.
    4. Weinstein, Milton & Zeckhauser, Richard, 1973. "Critical ratios and efficient allocation," Journal of Public Economics, Elsevier, vol. 2(2), pages 147-157, April.
    5. Richard A. Hirth & Michael E. Chernew & Edward Miller & A. Mark Fendrick & William G. Weissert, 2000. "Willingness to Pay for a Quality-adjusted Life Year," Medical Decision Making, , vol. 20(3), pages 332-342, July.
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    1. Caitlin M Dugdale & Tamsin K Phillips & Landon Myer & Emily P Hyle & Kirsty Brittain & Kenneth A Freedberg & Lucy Cunnama & Rochelle P Walensky & Allison Zerbe & Milton C Weinstein & Elaine J Abrams &, 2019. "Cost-effectiveness of integrating postpartum antiretroviral therapy and infant care into maternal & child health services in South Africa," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-18, November.

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