HEALTH ECONOMICS Health Econ. 8: 25–39 (1999) ECONOMIC EVALUATION INCORPORATING SOCIETAL CONCERNS FOR FAIRNESS IN NUMERICAL VALUATIONS OF HEALTH PROGRAMMES

The paper addresses some limitations of the QALY approach and outlines a valuation procedure that may overcome these limitations. In particular, we focus on the following issues: the distinction between assessing individual utility and assessing societal value of health care; the need to incorporate concerns for severity of illness as an independent factor in a numerical model of societal valuations of health outcomes; similarly, the need to incorporate reluctance to discriminate against patients that happen to have lesser potentials for health than others; and finally, the need to combine measurements of health-related quality of life obtained from actual patients (or former patients) with measurements of distributive preferences in the general population when estimating societal value. We show how equity weights may serve to incorporate concerns for severity and potentials for health in QALY calculations. We also suggest that for chronically ill or disabled people a life year gained should count as one and no less than one as long as the year is considered preferable to being dead by the person concerned. We call our approach ‘cost-value analysis’. Copyright © 1999 John Wiley & Sons, Ltd. KEY WORDS — QALY; cost-utility analysis; health programme evaluation; fairness; severity of illness; potential for health; person trade-off; cost-value analysi