Valuing Our Natural Environment Final Report ... - HM Treasury

Valuing Our Natural Environment – Final Report - Annex1
determined by how people feel when they are in these states, by their preferences about
them, or perhaps by some objective principles”.
HYEs (healthy year equivalents) both describe the health state and provide information on
its duration, in a two-stage process which first converts the multi-year scenario into a
single index of utility, and then converts this into a number of “healthy year equivalents”
in normal health.
In principle the DALY is a straightforward variation on the QALY; however it does differ in
the way in which it has been implemented, in particular by using the person trade-off (see
below) and because ratings of health states have been carried out by medical experts
rather than the general public. Another key difference is the use of age-weights, such that
a year of life is worth different amounts at different ages (QALYs can do this, but generally
don’t). The method has been used by the World Bank / WHO to derive the ‘burden of
disease’ (DALYs lost due to a given disease) for many diseases and most countries.
QALYs originally focused on “constant” health states, i.e. a single description of an
unchanging and permanent state of health. A key contribution arising from alternatives
such as HYEs (healthy year equivalents) has been the idea of directly valuing a series of
different health states, and new QALY approaches have been developed to combine health
states that vary over time, but these approaches have not yet been tested empirically
(Towers et al., 2005).
When aggregated across individuals, QALYs assume that a year of good health to one
individual is worth the same as a year of good health to another. This partly ignores a host
of other factors (psychology, family, social status, wealth) which may influence individuals’
quality of life. But these factors may be partly reflected in QALYs, e.g. the EQ-5D 3 health
state descriptive system includes “usual activities” which presumably captures some family
issues and “anxiety/depression” which presumably captures some psychology issues.
QALYs can be interpreted as either a representation of individual preferences and utility, or
as a measure of the most important maximand in health policy. The former approach leaves
open the possibility that different people value QALYs differently (with attendant problems
for aggregation) while the latter simply assumes that QALYs are of equal value, on grounds
of fairness. Under the latter approach, ignoring the host of other things that may affect
individuals’ willingness to pay for risk reductions is not a shortcoming but an advantage: all
QALYs are treated as if they had equal social value (regardless of an individual’s ability to
pay for their own risk reduction). Other than through this assumption, QALYs do not
attempt to consider fairness or equity. For example, they do not distinguish between an
intervention giving one person 10 QALYs and one giving 100 people 0.1 QALYs each.
A1.2.4.4 Process of implementation
To implement QALYs requires a scale of relative values for different health states ranging
from 0 (death) to 1 (perfect health). In some cases negative numbers can be used for
health states which are “worse than death” (e.g. complete incapacitation with constant
pain). For DALYs, weights range from 0 (perfect health) to 1 (death). To work out weights
requires use of multi-attribute utility scales. For QALYs:
Select a representative sample of individuals from relevant population. Ask respondents to
weight different health states on a 0 to 1 scale according to:
1. direct weighting of each state
2. time trade-off: respondents choose the number S years of perfect health which
makes them indifferent between S years in that state and T years in some other
state. S/T is the weight attached to the impaired state.
3. standard gamble: a choice between: (1) certainty of the impaired state for the
rest of their life; and (2) a probability p of same period in perfect health, (1-p)
3 EQ-5D is a standardised instrument for use as a measure of health outcome, intended for
self-completion, designed by EuroQol. http://www.euroqol.org/web.
eftec A42
December 2006