Uses and abuses of QALY analysis

A major contribution of economics to health services research has been the development of QALYs (quality adjusted life years) as a measure of health status. This thesis investigates, in three essays, the use of QALYs in health care project evaluation and as an indicator of societal health. The first essay examines the validity (defined as consistency with preferences) and feasibility of various QALY construction methods. Conditions for validity, derived from welfare principles, are used to assess the different methods. A new QALY instrument is devised that has interpersonal content (i.e. is valid for choices involving different individuals). Bias is shown to depend on various independence relationships within preferences. A number of these conditions are tested using data from the General Social Survey of 1985 (Canada. Statistics Canada [1987]). The second essay examines the welfare properties of the QALY-based index as it is commonly employed to make health policy decisions. A comparison with alternative economic-based health indexes (human capital and willingness-to-pay) is provided. The QALY-based measure does indicate which treatment is best for an individual. In choosing patients for treatment, however, QALY-based measures probably discriminate against certain types of individuals, including those who are risk averse with respect to health and in poor health. In choosing between health programs, aggregate QALY-based measures do order community health profiles sensibly (except where people endure states worse than death), unlike the other measures considered. The QALY-based index may, however, favour unequal distributions of health. The final essay assesses the appropriateness and feasibility of QALYs as a foundation for an index of societal health. Results suggest that, theoretically, the QALY serves as an imperfect measure of societal health, but that these problems are endemic to any index based on individual preferences. Using the best available data, a QALY based index is calculated to measure the level and distribution of ill-health in Canada and indicate where health policy can be most effectively targeted. The essay concludes with a discussion of what improvements in data collection are required to obtain more accurate figures.Arts, Faculty ofVancouver School of EconomicsGraduat