Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Cost–Benefit Analysis and Health Care Evaluations, Second Edition

Robert J. Brent

Cost–benefit analysis is the only method of economic evaluation that can effectively indicate whether a health care treatment or intervention is worthwhile. In this thoroughly updated and revised second edition, Robert Brent expands the scope of the field by including the latest concepts and applications throughout all regions of the world. This book attempts to strengthen the link between cost–benefit analysis and the mainstream health care evaluation field, which is dominated by non-economists. The need to build a bridge between the two is more important than ever before, as the general understanding of cost-benefit analysis appears to have regressed.

Chapter 9: Measuring utilities in cost–utility analysis

Robert J. Brent

Subjects: economics and finance, health policy and economics, valuation, environment, valuation, social policy and sociology, health policy and economics


The number of QALYs associated with any health state can be expressed as the product of the number of years T (for time) in that state and the average quality of a year in that state, which will be denoted as _, that is, QALYs 5 _ 3 T. This formulation adopts the constant proportionally (CP) assumption for _ whereby any utility value is just multiplied by time (number of years). We will (unlike some of the literature) use the term quality of life, or QoL, interchangeably with utility and value. This chapter is devoted to explaining, comparing and contrasting the three main methods for deriving estimates for _. By a method we mean the type of question asked of a person to extract his or her preferences and the way this gets recorded as a number (usually) between 0 and 1. We will not be referring to alternative statistical estimation techniques as different methods. The three methods covered are the category rating scale (RS), the standard gamble (SG) and the time trade-off model (TTO). We make comparisons in terms of both theory and practice. Before explaining each method in detail, and then presenting the applications, we cover some background issues.

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