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Counting and discounting gained life-years.

J Søgaard¹, D Gyrd-Hansen

¹Odense University, Denmark.

Developments in Health Economics and Public Policy

|February 8, 2000

Summary

Life expectancy gains can be calculated in multiple ways, impacting cost-effectiveness. This study evaluates different counting and discounting models for life expectancy gains, showing significant variations in results.

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Area of Science:

Demography
Public Health Economics
Biostatistics

Background:

Estimating life expectancy gains from mortality reductions is crucial for public health policy.
Existing literature employs diverse methods for calculating and discounting these gains.
Lack of standardization leads to variability in economic evaluations.

Purpose of the Study:

To formally present and compare various counting and discounting models for life expectancy gains.
To illustrate the impact of different models on discounted life expectancy gains using real-world data.
To recommend a standardized approach for economic evaluations in public health.

Main Methods:

Formal presentation of three counting methods for life expectancy gains (end-of-life, time-of-event, distributed).
Integration of deterministic and probabilistic approaches to life expectancy.
Application of various discounting models to Danish male mortality data and a colorectal cancer screening program evaluation.

Main Results:

Different counting and discounting models yield significantly different discounted life expectancy gains.
One model resulted in a present value 150 times larger than another for a newborn with 7% discount rate.
The choice of model substantially impacts cost-effectiveness ratios in health program evaluations.

Conclusions:

The selection of counting and discounting models is critical and often not explicitly stated in evaluations.
Significant discrepancies in discounted gains necessitate a standardized approach.
Recommends discounting the differences between survival probability curves as a sufficient model.

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