1. Comparing the Noncomparable: The Need for Equivalence Measures That Make Sense in Health-Economic Evaluations
- Author
-
F. Reed Johnson, Frank I. Scott, Meenakshi Bewtra, Shelby D. Reed, and James D. Lewis
- Subjects
Time Factors ,Cost-Benefit Analysis ,media_common.quotation_subject ,Validity ,03 medical and health sciences ,0302 clinical medicine ,Willingness to pay ,Health care ,Econometrics ,Humans ,030212 general & internal medicine ,Equivalence (measure theory) ,media_common ,Health economics ,business.industry ,Applied economics ,030503 health policy & services ,Health Policy ,Public Health, Environmental and Occupational Health ,Reproducibility of Results ,Quality-adjusted life year ,Models, Economic ,Quality-Adjusted Life Years ,0305 other medical science ,business ,Psychology ,Welfare - Abstract
Background The popularity of quality-adjusted life years (QALYs) has been resistant to concerns about validity and reliability. Utility-theoretic outcome equivalents are widely used in other areas of applied economics. Equivalence values can be derived for time, money, risk, and other metrics. These equivalence measures preserve all available information about individual preferences and are valid measures of individual welfare changes. Objective The objective of this study was to derive alternative generalized equivalence measures from first principles and illustrate their application in an empirical comparative-effectiveness example. Methods We specify a general-equilibrium model incorporating neoclassical utility functions, health production function, severity-duration preferences, and labor-market tradeoff function. The empirical implementation takes advantage of discrete-choice experiment methods that are widely accepted in other areas of applied economics and increasingly in health economics. We illustrate the practical significance of restrictive QALY assumptions using comparative-effectiveness results based on both QALYs and estimates of welfare-theoretic time-equivalent values for anti-tumor necrosis factor and prolonged corticosteroid treatments for Crohn’s disease in three distinct preference classes. Results The QALY difference between the two treatments is 0.2 months, while time-equivalent values range between 0.5 and 1.3 months for aggregate and class-specific differences. Thus, the QALY-based analysis understates welfare-theoretic values by 60%-85%. Conclusion These results suggest that using disease-specific equivalence values offer a meaningful alternative to QALYs to compare global outcomes across treatments. The equivalence values approach is consistent with principles of welfare economics and offers several features not represented in QALYs, including accounting for preference nonlinearities in disease severity and duration, inclusion of preference-relevant nonclinical healthcare factors, representing preferences of clinically-relevant patient subpopulations, and including utility losses related to risk aversion.
- Published
- 2019