Erik Nord, 1999

FUTILE UTILITIES?

Nordic Evidence Based Health Care Newsletter December 1999

Summary:

There is evidence that formal economic evaluation studies have and will continue to have a limited role in resource allocation decisions. On the other hand, present evidence does not suggest that studies using utilities are less attractive to users than studies using other techniques.

Even if cost-utility studies have some impact, they are not always valid. Utilities on offer today are often misconceived, without users being sufficiently aware of this problem. Click here for more about this.

Utilities are quality of life scores assigned to states of illness and disability on a scale from zero to unity. They may be used to weight life years and to assign numerical values in terms of QALYs to life scenarios of different duration and different functional levels.

Utilities are theoretically attractive inasmuch as they make it possible to compare the cost-effectiveness of health programs that are different in terms of the kind of benefit they yield. (= cost-utility analysis). But to express quality of life in terms of numbers may seem odd to many decision makers, and the underlying assumptions of the numbers may not be trusted.

The impact on economic evaluation studies in general on resource allocation decisions seems to be limited, perhaps with the exception of decisions about public reimbursement of expenses on pharmaceuticals (Davies et al, 1994; Ross, 1995; Sloan and Grabowski, 1997). Reasons for this include poor communication of results, difficulties of freeing resources from existing services even if economic analysis suggests that this should be done, and concerns for equity.

In the study by Davies et al (1994) 5 out of 9 cost-utility studies were deemed to have had an impact, as compared to only 7 out of 32 cost-effectiveness studies that did not use utilities, and 3 out of 14 monetary cost-benefit studies.

Fifty to seventy-five percent of decision makers in Finland, France, Germany and Norway reported that they had ’very little’ knowledge of cost-utility analysis (Hoffmann et al, forthcoming). The corresponding figures for monetary cost-benefit analysis were 10-35 per cent. It follows that cost-utility studies cannot be expected to have much impact at the moment, since their methodology is so little known. There is the possibility that the methodology is reported to be ’little known’ because people find it strange and unreliable. This might suggest that there will be low impact of cost-utility studies also in the future. Interestingly, however, 66 out of 79 decision makers in Norway thought that economic evaluations should play a larger role in discussions and decisions about resource allocation in health care, and 44 out of these 66 considered cost-utility analysis to be an interesting type of analysis. This interest was no less than that reported for monetary cost-benefit analysis and cost-effectiveness analysis without use of utilities (47 and 48 subjects respectively).

Information about quality of life in terms of utilities is in increasing demand by decision makers in national drug administrations (Langley, 1996, CCOHTA, 1997). Furthermore, WHO is investing heavily in the development of global burden of disease statistics in terms of DALYs, in which ’disability weights’, which conceptually are very similar to utilities, play a major role (Murray and Lopez, 1996).

In conclusion, there is evidence that formal economic evaluation studies have and will continue to have a limited role in resource allocation decisions. On the other hand, present evidence does not suggest that studies using utilities are less attractive to users than studies using other techniques.

Finally, it should be noted that even if cost-utility studies have some impact, they are not always valid. Utilities on offer today are often misconceived, without users being sufficiently aware of this problem (Nord, 1996; 1999)

References:

Canadian Coordinating Office for Health Technology Assessment. Guidelines for economic evaluation of pharmaceuticals in Canada, 2^nd ed. Ottawa: CCOHTA 1997.

Davies L, Coyle D, Drummond M et al. Current status of economic appraisal of health technology in the European Community: Report of the Network. Social Science & Medicine 1994,38, 1601-1607.

Hoffmann C, von der Schulenburg M et al. The influence of economic evaluation studies on decision making – a European survey. (Submitted.)

Langley PC. The November 1995 revised Australian guidelines for the economic evaluation of pharmaceuticals. Pharmacoeconomics 1996, 341-352.

Murray C, Lopez A. The Global Burden of Disease. Harvard University/WHO 1996.

Nord E. Health status models for use in resource allocation decisions. International Journal of Technology Assessment in Health Care 1996, 12, 31-44.

Nord E. Adjusting health state utilities for use in economic evaluation. Quality of Life Newsletter, Oct 1999.

Ross J. The use of economic evaluation in health care: Australian decision makers’ perceptions. Health Policy 1995,31,103-110.

Sloan FA, Grabowski HG. The impact of cost-effectiveness on public and private policies in health care: An international perspective. Social Science & Medicine, 1997 45, 645-647.