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Write a critical summary of the paper, including the key points, such as its motivation, its hypothesis, the data used, the methods used to analyse those data, and the outcome/result of this analysis.
Also state its relevant policy implications and discuss its limitations.
HEALTH ECONOMICS; Health Econ.
THINKING ABOUT IT: THOUGHTS ABOUT HEALTH
AND VALUING QALYs
PAUL DOLAN
Department of Social Policy, London School of Economics and Political Science, London, UK
SUMMARY
When valuing health states (e.g. for use in the assessment of health technologies), health economists often ask
respondents how many years of life in poor health they would be willing to trade-off in order to live in full health.
Problems with preferences of this kind have led to calls for the use of more direct measures of the utility associated
with experiencing a health state. The fact remains, however, that individuals are often willing to make large
sacrifices in life expectancy to alleviate conditions for which there appears to be a considerable degree of hedonic
adaptation. The purpose of this study is to investigate this important discrepancy in more detail. Data from 1173
internet and telephone surveys in the United States suggest that time trade-off responses are related to the frequency
and intensity of negative thoughts about health in ways that may not be very well captured by any of the proposed
valuation methods. Copyright
r
2010 John Wiley & Sons, Ltd.
Received 18 August 2009; Revised 19 June 2010; Accepted 24 August 2010
KEY WORDS:
quality-adjusted life years; time trade-off; experienced utility
1. INTRODUCTION
Decisions about who gets what treatment should be informed by the value of the benefits that health
services generate. The question is how to judge the value of those benefits. Until about 100 years ago,
economists would have thought about benefits in terms of people’s experiences – the greater the gains in
an individual’s enjoyment of an outcome, the greater the benefit (Edgeworth, 1881). More recently, they
have thought about benefits in terms of preferences – the stronger an individual’s preference for that
outcome, the greater the benefit (Fisher, 1918). The two definitions amount to the same thing if people
want most what they will eventually enjoy best and this is a common, albeit often implicitly made,
assumption in economics. It is also descriptively flawed (Dolan and Kahneman, 2008). Since we value
health using preference-based methods and since we may wish to know what effect health interventions
have on people’s experiences, we need further enquiry into the difference between strength of preference
and intensity of experience.
Methods have been developed for valuing states of health that are based on preferences and which
allow for the calculation of quality-adjusted life years (QALYs). The QALY approach assigns a weight
between 0 (for death) and 1 (for full health) to each state of health and then multiplies that value by how
long the state lasts. QALYs are increasingly being used by health technology assessment agencies to
help determine the relative cost-effectiveness of different interventions e.g. they are used by the National
Institute for Health and Clinical Excellence (NICE) in the UK. There are three main questions that need
*Correspondence to: Department of Social Policy, London School of Economics and Political Science, Houghton Street, London
WC2A 2AE, UK. E-mail: p.h.dolan@lse.ac.uk
Copyright
r
2010 John Wiley & Sons, Ltd.
to be aIDressed to calculate the ‘quality adjustment’ part of the QALY:
what
is to be valued;
how
is it to
be valued; and
who
is to value it (Dolan, 2000)?
The choice of
what
refers to the dimensions of health or well-being being considered. Most health
economists would recommend using an established generic measure of health that is designed
specifically for generating QALYs. One such descriptive system is the EQ-5D, which describes health in
terms of three levels (broadly, no problems, some problems and extreme problems) for each of five
dimensions (mobility, self-care, usual activities, pain/discomfort and anxiety/depression). The choice of
how
refers to the ways in which the health states are valued so that they lie on a 0–1 scale. One of the
most widely used preference-based methods is the time trade-off (TTO), which requires respondents to
consider how many years in full health are equivalent to a longer period of time in a poor health state.
The choice of
who
refers to the source of health state values, such as ‘patients’ experiencing a particular
state or the ‘public’ asked to imagine it.
A set of valuations for the EQ-5D have been estimated from the responses to hypothetical TTO
questions of a representative sample of over 3000 members of the UK general population (Dolan, 1997).
NICE recommends that patients describe their own health using the EQ-5D and that the population
valuation set be used to determine the number of QALYs associated with any change in health state as a
result of intervention. These recommendations are also being followed in other countries (e.g. Australia
and Canada), and are broadly consistent with the current emphasis in economics on an account of well-
being that is based on the satisfaction of preferences.
It is increasingly recognised that a person’s preferences at time 0 are often a poor guide to that
person’s preferences at time 1 (see Loewenstein and Angner, 2003 for a good review). Although very few
longitudinal studies exist, we do find in the health state valuation literature that members of the general
public (analogous with an assessment at
t
5
0 before circumstances change) generally consider most
adverse health states to be more severe than do those in the states (an assessment at
t
5
1) (de Wit
et al
.,
2000). Beyond this, there is also good evidence to suggest that the strength of preference is often a poor
guide to the intensity of experience (Schkade and Kahneman, 1998; Wilson and Gilbert, 2003). This is
partly because we exaggerate the extent to which we will attend to the state being valued (Dolan and
Kahneman, 2008) and we are all (‘public’ and ‘patients’) susceptible to exaggeration.
Imagine being asked to value walking with a cane. It is almost impossible to avoid imagining that as
you walk you will be thinking about the cane much of the time when, in fact, the cane will rarely be the
focus of your attention, especially as time passes. Focussing effects are an issue for any preference
elicitation question for any population, including those with experience of the condition, since what we
focus on in the question may not be focussed on the same extent in the experience of our lives. A person
who walks with a cane who is asked to imagine having their walking restrictions alleviated will
inevitably imagine actively enjoying the freedom of normal walking, which they may quickly take for
granted.
This is not to say that walking with a cane will not have any effect on utility but, rather, that its effect
is likely to be considerably less than we think about it being. As Adam Smith noted over 250 years ago:
‘The great source of both the misery and disorders of human life seems to arise from over-rating the
difference between one permanent situation and another’ (Smith, 1759). This may generally be true but
some things, like the effects of prolonged and unexplained pain (Peters
et al
., 2000), may perhaps turn
out to be worse than we imagine them to be. The important general point is that the focus of attention
that drives our strength of our preferences is different from the focus of attention that explains the
intensity of our experiences.
Partly in response to such problems, increasing interest is being shown in the direct assessment of
experienced utility, as approximated by the flow of feelings during the day (Dolan and Kahneman,
2008). The day reconstruction method (DRM), for example, has been specifically designed to measure
experienced utility in this way (Kahneman
et al
., 2004). The DRM asks respondents to divide the
previous day into a number of episodes and then to rate different feelings during those activities. Any

 
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