.1 Introduction
One of the main challenges for health economists when conducting economic evaluations is deciding upon the most appropriate way to value the outcomes of interventions. This challenge is even more taxing when the interventions are associated with temporary health states which, unlike chronic health states, may require special consideration of methodological issues. The objective of this chapter is to outline the theory behind the valuation of health states. First, an overview of economic evaluations methods with a focus on the Quality-adjusted life years (QALY) will be presented. Next, health states and the methods used for their valuation will be discussed. Finally, a brief description of the methods which are used for …show more content…
The welfarist approach adopts the classical welfare economics principle and is based on the works of Pareto, Hicks and Kaldor and others (Morris et al, 2007). This approach views social welfare as a function of individuals’ utilities (a measure of how much one values a state of the world; Cohen, 1993) only, and asserts that individuals are the best judges of their own welfare (Culyer, 1990; Coast et al, 2008). The extra-welfarist approach on the other hand, uses the principles of welfarism plus, in some cases, an adoption of Sen’s notion of capabilities (Sen, 1985). It particularly draws from two aspects of Sen’s: the importance of functionings (health) and the idea of community rather than individual values (Coast et al, 2008). It assumes that in social welfare, health (and not utility) is the most relevant outcome for health care analysis, and considers both utility and non-utility aspects (Hurley, 2000; Brouwer et al, 2008). However, whilst the extra-welfarist approach claims to have increased the evaluative space from utility alone (Culyer, 1989) in practice, extra-welfarism appears to have altered the evaluative space from utility to a much narrower domain: the health of patients (Coast, …show more content…
In CUA, health economists and policy makers use a ‘common currency’ of health gain outcomes known as Quality Adjusted Life Years (QALYs). Here, specific values are attached to specific health states, in order to increase the transparency of resource allocation processes (Gold et al, 1996). However, the challenges of CUA are primarily related to the adequacy of QALYs for capturing these societal values (Szende and Schaefer, 2006). The CUA takes an extra-welfarist approach and as such focuses on health gain, thus is unable to capture non-health benefits or wider utility. CUA is, therefore, not a sufficient basis
One of the main challenges for health economists when conducting economic evaluations is deciding upon the most appropriate way to value the outcomes of interventions. This challenge is even more taxing when the interventions are associated with temporary health states which, unlike chronic health states, may require special consideration of methodological issues. The objective of this chapter is to outline the theory behind the valuation of health states. First, an overview of economic evaluations methods with a focus on the Quality-adjusted life years (QALY) will be presented. Next, health states and the methods used for their valuation will be discussed. Finally, a brief description of the methods which are used for …show more content…
The welfarist approach adopts the classical welfare economics principle and is based on the works of Pareto, Hicks and Kaldor and others (Morris et al, 2007). This approach views social welfare as a function of individuals’ utilities (a measure of how much one values a state of the world; Cohen, 1993) only, and asserts that individuals are the best judges of their own welfare (Culyer, 1990; Coast et al, 2008). The extra-welfarist approach on the other hand, uses the principles of welfarism plus, in some cases, an adoption of Sen’s notion of capabilities (Sen, 1985). It particularly draws from two aspects of Sen’s: the importance of functionings (health) and the idea of community rather than individual values (Coast et al, 2008). It assumes that in social welfare, health (and not utility) is the most relevant outcome for health care analysis, and considers both utility and non-utility aspects (Hurley, 2000; Brouwer et al, 2008). However, whilst the extra-welfarist approach claims to have increased the evaluative space from utility alone (Culyer, 1989) in practice, extra-welfarism appears to have altered the evaluative space from utility to a much narrower domain: the health of patients (Coast, …show more content…
In CUA, health economists and policy makers use a ‘common currency’ of health gain outcomes known as Quality Adjusted Life Years (QALYs). Here, specific values are attached to specific health states, in order to increase the transparency of resource allocation processes (Gold et al, 1996). However, the challenges of CUA are primarily related to the adequacy of QALYs for capturing these societal values (Szende and Schaefer, 2006). The CUA takes an extra-welfarist approach and as such focuses on health gain, thus is unable to capture non-health benefits or wider utility. CUA is, therefore, not a sufficient basis