IDEAS home Printed from https://ideas.repec.org/p/cty/dpaper/08-02.html
   My bibliography  Save this paper

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

Author

Listed:
  • Buckingham, K.
  • Devlin, N.

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.

Suggested Citation

  • Buckingham, K. & Devlin, N., 2008. "A note on the nature of utility in time and health and implications for cost utility analysis," Working Papers 08/02, Department of Economics, City University London.
  • Handle: RePEc:cty:dpaper:08/02
    as

    Download full text from publisher

    File URL: https://openaccess.city.ac.uk/id/eprint/1480/1/0802_buckingham-devlin.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Drummond, Michael F. & Sculpher, Mark J. & Torrance, George W. & O'Brien, Bernie J. & Stoddart, Greg L., 2005. "Methods for the Economic Evaluation of Health Care Programmes," OUP Catalogue, Oxford University Press, edition 3, number 9780198529453.
    2. A Mehrez & A Gafni, 1990. "Evaluating Health Related Quality-of-life: An Indifference Curve Interpretation for the Time Trade-off Technique," Centre for Health Economics and Policy Analysis Working Paper Series 13, Centre for Health Economics and Policy Analysis (CHEPA), McMaster University, Hamilton, Canada.
    3. 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.
    4. Brouwer, Werner B.F. & Culyer, Anthony J. & van Exel, N. Job A. & Rutten, Frans F.H., 2008. "Welfarism vs. extra-welfarism," Journal of Health Economics, Elsevier, vol. 27(2), pages 325-338, March.
    5. 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.
    6. David Parkin & Nancy Devlin, 2006. "Is there a case for using visual analogue scale valuations in cost‐utility analysis?," Health Economics, John Wiley & Sons, Ltd., vol. 15(7), pages 653-664, July.
    7. 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, April.
    8. 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.
    9. 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, October.
    10. Dolan, Paul & Stalmeier, Peep, 2003. "The validity of time trade-off values in calculating QALYs: constant proportional time trade-off versus the proportional heuristic," Journal of Health Economics, Elsevier, vol. 22(3), pages 445-458, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Federico Augustovski & Lucila Rey-Ares & Vilma Irazola & Mark Oppe & Nancy Devlin, 2013. "Lead versus lag-time trade-off variants: does it make any difference?," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 25-31, July.
    2. Ariel Beresniak & Antonieta Medina-Lara & Jean Auray & Alain Wever & Jean-Claude Praet & Rosanna Tarricone & Aleksandra Torbica & Danielle Dupont & Michel Lamure & Gerard Duru, 2015. "Validation of the Underlying Assumptions of the Quality-Adjusted Life-Years Outcome: Results from the ECHOUTCOME European Project," PharmacoEconomics, Springer, vol. 33(1), pages 61-69, January.
    3. Papathanasopoulou, Eleni & White, Mathew P. & Hattam, Caroline & Lannin, Aisling & Harvey, Andrea & Spencer, Anne, 2016. "Valuing the health benefits of physical activities in the marine environment and their importance for marine spatial planning," Marine Policy, Elsevier, vol. 63(C), pages 144-152.
    4. Sharma, Rajiv & Stano, Miron, 2010. "Implications of an economic model of health states worse than dead," Journal of Health Economics, Elsevier, vol. 29(4), pages 536-540, July.
    5. Nancy J. Devlin & Aki Tsuchiya & Ken Buckingham & Carl Tilling, 2011. "A uniform time trade off method for states better and worse than dead: feasibility study of the ‘lead time’ approach," Health Economics, John Wiley & Sons, Ltd., vol. 20(3), pages 348-361, March.
    6. Devlin, N. & Tsuchiya, A. & Buckingham, K. & Tilling, C., 2009. "Does the value of quality of life depend on duration?," Working Papers 09/07, Department of Economics, City University London.
    7. Cathrine Elgaard Jensen & Sabrina Storgaard Sørensen & Claire Gudex & Morten Berg Jensen & Kjeld Møller Pedersen & Lars Holger Ehlers, 2021. "The Danish EQ-5D-5L Value Set: A Hybrid Model Using cTTO and DCE Data," Applied Health Economics and Health Policy, Springer, vol. 19(4), pages 579-591, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    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. R. Hoorn & A. Donders & M. Oppe & P. Stalmeier, 2014. "The Better than Dead Method: Feasibility and Interpretation of a Valuation Study," PharmacoEconomics, Springer, vol. 32(8), pages 789-799, August.
    3. Round, Jeff, 2012. "Is a QALY still a QALY at the end of life?," Journal of Health Economics, Elsevier, vol. 31(3), pages 521-527.
    4. 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.
    5. 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.
    6. Simon, Judit & Anand, Paul & Gray, Alastair & Rugkåsa, Jorun & Yeeles, Ksenija & Burns, Tom, 2013. "Operationalising the capability approach for outcome measurement in mental health research," Social Science & Medicine, Elsevier, vol. 98(C), pages 187-196.
    7. Coast, Joanna, 2018. "A history that goes hand in hand: Reflections on the development of health economics and the role played by Social Science & Medicine, 1967–2017," Social Science & Medicine, Elsevier, vol. 196(C), pages 227-232.
    8. Nicolas A. Menzies & Joshua A. Salomon, 2011. "Non‐monotonicity in the episodic random utility model," Health Economics, John Wiley & Sons, Ltd., vol. 20(12), pages 1523-1531, December.
    9. Karl Claxton & Mike Paulden & Hugh Gravelle & Werner Brouwer & Anthony J. Culyer, 2011. "Discounting and decision making in the economic evaluation of health‐care technologies," Health Economics, John Wiley & Sons, Ltd., vol. 20(1), pages 2-15, January.
    10. Basu, Anirban, 2020. "A welfare-theoretic model consistent with the practice of cost-effectiveness analysis and its implications," Journal of Health Economics, Elsevier, vol. 70(C).
    11. 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.
    12. Karl Claxton & Simon Walker & Steven Palmer & Mark Sculpher, 2010. "Appropriate Perspectives for Health Care Decisions," Working Papers 054cherp, Centre for Health Economics, University of York.
    13. Mike Paulden & Karl Claxton, 2012. "Budget allocation and the revealed social rate of time preference for health," Health Economics, John Wiley & Sons, Ltd., vol. 21(5), pages 612-618, May.
    14. 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.
    15. MORENO-TERNERO, Juan & OSTERDAL, Lars P., 2014. "Normative foundations for equity-sensitive population health evaluation functions," LIDAM Discussion Papers CORE 2014031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    16. Gafni, Amiram & Birch, Stephen, 1997. "QALYs and HYEs Spotting the differences," Journal of Health Economics, Elsevier, vol. 16(5), pages 601-608, October.
    17. Juan D. Moreno-Ternero & Lars Peter Østerdal, 2017. "A normative foundation for equity-sensitive health evaluation: The role of relative comparisons of health gains," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 19(5), pages 1009-1025, October.
    18. Daniel M. Hausman, 2010. "Valuing health: a new proposal," Health Economics, John Wiley & Sons, Ltd., vol. 19(3), pages 280-296, March.
    19. 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.
    20. Luciana Scalone & Peep Stalmeier & Silvano Milani & Paul Krabbe, 2015. "Values for health states with different life durations," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(9), pages 917-925, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cty:dpaper:08/02. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/decituk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Research Publications Librarian (email available below). General contact details of provider: https://edirc.repec.org/data/decituk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.