How much is a life worth?

Health managers were asked how much they thought a life was worth and how much they thought additional months of life were worth, at the HMI Forum, organised by HMI West. Maureen Browne reports.

Health managers were asked how much they thought a life was worth and how much they thought additional months of life were worth, at the HMI Forum, organised by HMI West at Merlin Park Regional Hospital in Galway.

Mr. Brendan Kennelly, Lecturer in Health Economics at NUI Galway posed the questions when he spoke on the application of health economics to healthcare decision making.

Brendan Kennelly
Brendan Kennelly

“Should a new expensive drug such as Provenge be covered by the HSE? It costs 90,000 dollars a dose and could give prostate cancer patients four months of additional life?  What is a life worth? What are an additional two to three years of life worth to society?  If it is personal, we would, of course, say ‘yes’ to drugs which could achieve this, but we should also ask if society should provide these drugs. Medical people will say we should provide the drugs which will provide additional months or years of life but the role of health economics is to consider how scarce resources should be allocated  to compelling ends.

“Then, let’s take obesity in a nine year old.  Should the government spend money to increase physical exercise in the child by providing an extra hour of PE every day for him or her? But we don’t want a society where we spend all our resources on health. There are other things like food, because we don’t just want to live a long life, we want to live a life with other things in it.

“The basic question is how to allocate scarce resources to maximise the quantity and/or the quality of life. The effectiveness of health interventions is necessary but not sufficient for decision making. We need to know the cost and if possible the value of interventions. We need at least two options to compare and two dimensions (cost and consequences). In principle, economic evaluation can compare the relative worth of interventions even if they are quite different.”

Mr. Kennelly said we could compare different interventions for their contribution to health maximisation or their contribution to total economic welfare. The changes in health care could be measured by healthy effects or health state preferences.

The resources consumed by any health programme come from four sectors – the health sector, other public sectors, informal care and the general economy. The resources used in each sector should be measured and a price applied. This raises the question as how to measure and value inputs such as time from voluntary and family sectors.

HIQA only measured direct health costs but there was a broader perspective that would say other sectors in the economy might be affected in a particular situation – social services, education and housing might be affected. Informal caring was a big part of interventions and treatment in illnesses such as dementia and Alzheimer’s where a lot of care was provided informally. Then there was the question of the general economy. For example take the cost of mental illness in Ireland – one of the big costs was the loss of productivity and output not produced because people were unable to work. We would need to consider the full economic cost of failing to provide interventions that could reduce mental illness or help patients cope with it.

Medical people will say we should provide the drugs which will provide additional months or years of life but the role of health economics is to consider how scarce resources should be allocated  to compelling ends.

In analysing cost effectiveness, it was necessary to calculate the costs and effects of an intervention and an alternative, choosing one effect on which to focus – for example, it could be life years saved or days without a symptom. You calculated the difference in costs and the differences in effect and presented these as a ratio- the cost per unit of health outcome.  The results could also be stated in terms of health outcomes per unit of cost e.g. life years gained per euro spent or the reduction in patient days.

Mr. Kennelly said that while cost effectiveness analysis was very useful, it did not allow us to compare overall costs, which health managers had to consider.

“If our interest lies in resource allocation across different areas of health care, we need a kind of generic outcome measurement – the Quality Adjusted Life Year (QALY).  QALYs attempt to capture the effects of a health intervention on both the length of life and quality of life. A cost effectiveness analysis (CEA) which measures outcomes in terms of QALYs, is referred to as cost utility analysis, although often, CEA  and Cost Utility Analysis (CUA) are used interchangeably. The calculation and use of QALYs relies on economic theory but, in addition, the preferences of different health states have to be elicited somehow. The results of CUA are typically expressed in costs per QALY. Mr. Kennelly said that in the UK, NICE set a threshold of between 20,000 and 30,000 pounds. In Ireland there was no threshold stated by HIQA.  The National Centre for Pharmoeconomics had used €45,000 as a threshold, but this was not imposed rigidly.

“It would be very difficult to calculate an exact number of QALYs on every intervention for every illness. You would need to rank health states – for example a person with a heart attack would be ranked in terms of quality of life, social function, productivity. Which of these do you think would be best?  It might be 20 health states, or indeed you might use 200. The kind of data needed for QALY analysis to work very well is very challenging. It is very difficult to map different functions into different health states – pain, function, emotion etc.

“In the UK, people would say interventions would not be funded if the cost of QALY care per intervention was above 30,000 pounds. In cost utility planning, you can look at reduction in QALYs where money is saved or better QALYs with higher expenditure. There is a general agreement that weights should be based on individual preference for health stats. There is much debate on whose preferences this should be – patients, policymakers and the general public should be considered.

Mr. Kennelly said that in cost benefit analysis, the human capital approach measured benefit as the present value of an individual’s future earnings. Another approach was willingness to pay for a reduction in the probability of death and more attention was being given recently to stated preference approaches. In health there was no easy or obvious way of valuing life.

If illnesses were concentrated in particular demographic age groups, that would have an impact on cost. For example, if you compared a mental illness such as schizophrenia with dementia, one affecting relatively young people which would mean that a higher proportion would be available to work, whereas people with dementia were generally beyond working age. But nothing in health economics said we should only consider productivity in valuing different health states. It mattered a lot who was doing the valuing.  Was it a representative people, was it people who were patients, was it the general public?

He said that we didn’t want health economists telling us what was or what was not permitted, but in countries with a private health insurance market health insurance companies were doing this all the time.