Measurement of benefits

This section contains the following:

Introduction
The quality-adjusted life-year
The disability-adjusted life-year
Monetary measure of benefit
Incremental cost-effectiveness
Additional resources

Introduction

To make judgments about efficiency an economic evaluation has to compare health outcomes, however measured, with costs. there are several tools available to measure and value health outcomes, the main methods being quality-adjusted life-years, disability-adjusted life-years and monetary measure of benefit, for example, contingent valuation.

The quality-adjusted life-year (QALY)

A measure of health outcomes that reflects an individual's valuation of quality of life and combines that with data on length of life.
QALYs are calculated on the basis that health can be valued on a scale of 0 to 1. One year of perfect health is valued as 1, and one year of less than perfect health is valued as less than one, and death valued as 0. It is also possible for people to value health states as less than 0, for those health states that people may value as being worse than death.

The disability-adjusted life-year (DALY)

Widely used when evaluating health related intervention in developing countries and has also been quite widely criticised.
DALYs are used to measure the life years lost from different diseases and injuries.
Like QALYs they are a non-monetary measure which can combine information on both mortality and morbidity into a single unit.

Monetary measures of benefit

The health benefits of an intervention can also be valued using the contingent valuation (CV) technique.
CV use survey techniques to present respondents with theoretical scenarios about the programme or problem under evaluation. Respondents are require to think about the contingency of an actual market existing for a programme or health benefit and to reveal the maximum they would be willing to pay for such a programme or benefit (Drummond et al, 1997).
Essential, CV attempts to determine what respondents would be willing to pay for the outcomes of the proposed programme if they were in an actual market place. It can be thought of as an attempt to replace a missing market.

Incremental cost-effectiveness

Data collected on costs and effects of an intervention can be combined to obtain an incremental cost-effectiveness ratio (ICER). This is performed by calculating the mean difference in costs between the interventions and control group over the difference in d=effect between the intervention and control group. This provides us with the cost per additional unit effect gained fro the new interventions relative to standard practice.