Toward a More Universal Approach in Health Valuation

By polling individual responses to hypothetical scenarios, valuation studies estimate population preferences toward health on a quality-adjusted life year (QALY) scale. The scenarios typically involve trade-offs in time (time trade-off (TTO)), risk (standard gamble (SG)), or number of persons affected (person trade-off (PTO)). This paper revisits the QALY assumptions and provides a coherent health econometric approach that unites TTO, SG, and PTO techniques under a common estimator. The proposed approach avoids the use of ratio statistics in QALY estimation and the common convention of arbitrarily changing trade-off responses. As an example, 34% of the TTO responses from the seminal Measurement and Valuation of Health study were changed in the original UK analysis, which led to substantially lower QALY estimates. As a general rule, if the original estimate is less than 0.5 QALYs, add 0.25 QALYs to get the new estimates.