Brown bag: Individual's preference towards physical mobility and length of life

Economics

Speaker:Antonieta Medina-Lara , University of Exeter
Date: Tuesday 29 September 2015
Time: 12.30 - 13.30
Location: Syndicate Room C, Building One

Further details

Background: The Quality-Adjusted Life Year (QALY) is the health outcome measure used in economic evaluation studies as recommended by the National Institute for Health and Care Excellence (NICE) in the UK. It is a composite measure of quality and quantity of life with the former derived from individuals’ expressed preferences over health states. Criticisms of the QALY are abundant in the literature, covering theoretical, empirical and ethical issues. Objective: To elicit individuals’ valuations of health states with different mobility levels and survival durations using Expected Utility as the theoretical framework under which to test key axioms of the QALY model. Methods: Data were collected at the Finance and Economics Experimental Laboratory at Exeter (FEELE) at the University of Exeter. Undergraduate students’ preferences were elicited using two set of five health state scenarios in which the quality and quantity of life was varied. Descriptive statistics were used to identify individual response patterns in the data and linear fixed effect regressions of second-order Taylor series expansion approximations to individual responses were used to test whether Monotonicity, Risk Neutrality and Proportionality (axioms of utility functions) held in the sample. The robustness of the results was further tested for males and females participants. Results: A total of 301 students participated in the experiment of whom 57% (172/301) were female; the mean age was 19.7 (mode 19) years for both males and females. The students came from 20 degree programmes, and the majority, 36% (109/301), from the Business School. There were some contradictions in the students’ stated preferences for the mobility-based health state scenarios. The Monotonicity axiom was not rejected but the axioms of Risk Neutrality and Proportionality did not hold for this experiment; this was also true in the analysis of sub-groups. Discussion: The multiplicative QALY model is, therefore, inconsistent with the health state preferences elicited in this study. Therefore, current decisions about healthcare service provision may be based on misleading evidence about the relative value between treatments aimed at people of different ages or involving health risks of different order of magnitude.