HRQoL "Utilities" - time for a fundamental reassessment?

1. Professor Nancy Devlin
HEU, Centre for Health Policy
University of Melbourne
Email: nancy.devlin@unimelb.edu.au
Issues panel IP15, ISPOR May 2020
HRQoL ‘utilities’ - time for a
fundamental reassessment?

2. 1. The role of utility theory in CEA
• Our convention in health economics (spanning 30 years) is that HRQoL values should:
(i) Be obtained from members of the general public
(ii) Be anchored at dead = 0 (thus requiring methods which address the valuation of
‘dead’ either implicitly or explicitly, and which can elicit values < 0)
(iii) be ‘choice-based’, ‘based on trade-offs’ and be obtained using methods based on
an underlying theory of utility
This has become so deeply embedded in the ‘custom and practice’, we rarely question
them.
The aim of this presentation is to question (iii), highlighting some discrepancies between
our use of utilities in this context and normative foundations of cost effectiveness
analysis.
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4. 2. Critiques of utility & welfarism
Sen (1979, 1999): utility fundamentally flawed as a basis for social
choices.
• welfarism ‘less relevant to the particular context and background of
health care resource allocation, where the objectives of the players do
not entirely agree with those upheld by market theory” (Tsuchiya &
Williams 2001)
• “The consideration of characteristics of people, including
‘functionings’ and ‘capabilities’ creates the possibility of a non-utility
view of quality of life” (Culyer 1989)
• Culyer (2012) describes “The health measurement movement (QALYs,
health indices etc) as an example of this non-utility approach” (p. 58)

5. Welfarism, extra-welfarism (EW) and non-
welfarism (NW)
SW = f(U1, U2, U3…Un)
EW = f(U1, H1; U2, H2; U3, H3….Un, Hn)
NW = f(H1, H2, H3….Hn)
Custom-and-practice in CEA: ‘H’ is self-reported health, but summarized by
‘utilities’ which are an average of the stated preferences of the general
public
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6. 3. Welfarism, extra-welfarism, and the role of
utility in CEA
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CBA & applied welfare
economics. Pareto and
extended Pareto
(compensation) principles.
SWF = an aggregate of
individual utility
Sen (1970s): Utility fundamentally
flawed as a basis for social choices.
People ‘manage to desire less’ and
adapt to miserable circumstances.
Capabilities and functionings
important. Extra welfarism. Culyer (1972): extra
welfarism permits
the introduction of
other arguments into
the decision maker’s
objective function.
Health proposed as
an appropriate
maximand
Williams/Sugden: the ‘decision
makers approach’. The decision
maker (eg govt) as the ‘client’.
incremental cost per QALY
gained established as dominant
method in econ evaluation of
health care
Health economists: methods
used to value QoL should be
based in utility theory
Late1960s:healthstatus
measurement&QALYs
??

7. 4. What does EW theory say about valuation?
Extra welfarism:
‘permits the weighting of outcomes (whether utility or other) according to principles that
need not be preference based (Culyer 2012 p. 72).
“…any number of stakeholders might be regarded as the appropriate source of different
values” (Culyer 2012).
These sources of values might appropriately come from:
“…an authority (decision makers, wise women, the general public, an elected or appointed
committee, a citizen’s jury, or some other organ)” (Culyer 2012)
• Who is the ‘client’ (real or imagined)?
[As an aside: EW is consistent with extending ‘elements of value’ beyond QALYs eg. recent
US ‘value frameworks’; MCDA]
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8. Some observations…
• The orthodox approach in health economics, of basing QoL weights on
utility is not a requirement of EW.
• Indeed, could be argued to be out of keeping with EW foundations in the
rejection of utility
• EW is not prescriptive
• More work in needed fundamentally to revisit the normative basis for
economic assessments in health care
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9. 5. Why worry? Problems with current
approaches to utility
• Different methods for assessing utility draw on different elements of utility
theory.
• Choosing between methods = choosing between theories.
• Different methods give us systematically different results
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SG: utility under uncertainty (von Neumann and Morgenstern)
TTO: empirical proxy for SG (Torrance), but can be given its own theoretical foundation
in Hick’s utility theory (CV & EV for losses/gains – Buckingham & Devlin)
VAS: psychometric theory; Parducci response to stimuli
DCE: random utility theory (McFadden)

10. The impossibility of validation
• All current methods for valuing HRQoL rely on stated preferences – there is no
corresponding market in which to reveal preferences, to validate results or help to
choose between methods or theories.
• So, how do we as researchers choose our approaches, given the importance of this to
HTA and patients’ access to medicines?
(a) “Do the results look like we expected?”
• Tautological: what results we think are OK, depends on what results we saw before,
which are a product of previous theory/methods choices
(b) “What do we ‘believe’/subscribe to in terms of how utilities should look/behave?”
• Entirely normative.
• Might be derivable from the client (real or imagined)
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11. Constructing versus ‘revealing’ preferences
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• Current approaches assume respondents have
pre-existing, consistent and stable utility
functions over HRQoL
• We merely have to ‘tap into’ them
• Fischoff: ‘the philosophy of articulated values’
• Contrasting view: People lack clearly formulated
preference for all but the most familiar of
evaluation tasks.
• respondents are constructing their utility
functions ’on the spot’ in response to what we
ask
• Which is why framing effects predominate in
stated preference studies

12. Stated preferences for health states &
‘affective forecasting’
Contemplating the ‘thing to be valued’ involves a series of
cognitive tasks which are unfamiliar:
Conceptualising ‘health’ in a generic manner
• Even if respondents have preferences about health, they
are unlikely to have formulated them in this way
Imagining living with problems they have not experienced
• eg unrelieved extreme pain for 10 years – really?
• ‘unrealistic’ combinations eg extreme pain and no
problems with daily living.
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13. Psychometric: Reliability; Validity (criterion; construct; content/face), Responsiveness;
Feasibility.
Necessary but not sufficient. What are the special requirements of a measure of HRQoL
for use in cost effectiveness analysis?
Economic:
• That it provides an unambiguous measure of benefit (eg. that it is capable of being
represented by a single number)
• That it is capable of comparing different possible uses of scarce resources ( eg generic)
• That it is capable of being interpreted in terms of ‘values’ e.g. ‘more is preferred to less’
Source: Morris, Devlin & Parkin (2007)
6. First principles: what properties are required
for a measure of HRQoL?

14. 7. Tentative conclusions
• Arguably, health economics’ attachment to utility theory has done this field a disservice
and wasted considerable time and resources on ‘red herring’ issues (eg. how to get
values < 0)
• Insufficient attention to fundamental normative principles underpinning HRQoL and
HTA
• We should focus on developing/using good, simple, fit for purpose approaches from
first principles, acknowledging that the practice of cost effectiveness analysis is already
a significant departure from the requirements of welfare economics
• … or, we could just keep on going as we are!
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15. Comments very welcome - thanks!
nancy.devlin@unimelb.edu.au
@nancydevlin1