Thank you for that. I was unfamiliar with it. I did a bit of googling myself and, in the process, answered a question that's been bugging me for ages--the basis for the notion that insurers spending on prevention is cost effective. This is part of a piece from Slate: slate.com
>>To ration care, a government or insurer determines how much a QALY is worth, and cuts health services with costs above where that line is drawn. This methodology hasn't really changed medical care in the United States because the threshold for QALY-based rationing is set high. In an unprecedented 1972 decision to fund a specific medical problem, Medicare began paying for kidney dialysis, which costs roughly $50,000 per QALY. In effect, this created a de facto cost-benefit threshold, and people have gamed the system ever since. It's not hard. As the British Medical Journal pointed out last year, most published studies of medical treatments in the United States find that all manner of medical treatments cost—voilà!—less than $50,000 per QALY. This also goes for HIV treatment in the United States. In 2001, for example, a group of Harvard researchers estimated in the New England Journal of Medicine that HIV medicines cost roughly $13,000 to $23,000 to give somebody a single QALY. The authors concluded the drug treatment for HIV was "highly cost effective and should be made available to all patients who can benefit from it."
What's easily affordable in rich countries, though, seems out-of-reach in poor ones where rationing thresholds are lower. Unfortunately, needy nations are stuck with figures conjured for countries where the ceiling is $50,000 per QALY. And the illusion of unaffordable treatment in poor areas is further bolstered by another insidious feature of QALY-based economics. In an experiment in the early 1990s, Oregon sought to ration health care by ranking all medical treatments, based on which yielded the most QALYs for the buck. Several odd findings emerged. Most notably, treatment of thumb-sucking and certain dental problems placed higher than treatment for cystic fibrosis and AIDS. Once these findings hit the media, Oregon abandoned the project and never rationed care.
What does thumb-sucking in Oregon have to do with AIDS in Africa? Oregon's experience showed how small improvements in huge numbers of relatively healthy young people (for example, millions of kids whose happiness is 1 percent higher since they don't thumb-suck, whatever that means) rack up QALYs faster than big improvements in a small number of really sick people (for example, a few dozen chronically ill folks with cystic fibrosis whose happiness is 10 percent higher from pricey antibiotics to treat their pneumonias). That's why—to economists, if to almost nobody else—it seemed fine to rank the treatment of thumb-sucking over cystic fibrosis, since it yielded the greatest overall QALY benefit. <<
>>So, QALYs are...inherently biased toward prevention and away from treatment. <<
I would support a measure like QALY for allocating medical resources.
I think that a tool like this could be enormously useful in communication of end-or-life issues with patients and family. It seems to me it needs some work to be smart as a allocator of resources for government single-payer health care. It seems more workable for a catastrophic coverage model.
>>Some argue that there are health states worse than death, and that therefore there should be negative values possible on the health spectrum (indeed, some health economists have incorporated negative values into calculations).<<
I agree with that. On a scale of 0 to 1, I'd put death at maybe a .2.
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