A utility-theoretic model for QALYs and willingness to pay.

Area of Science:

• Health economics
• Decision theory
• Preference measurement

Background:

• Quality-adjusted life years (QALYs) are widely used in health technology assessments.
• The underlying utility-theoretic foundation of QALYs remains incompletely understood.
• Existing models often assume QALY weights are independent of wealth levels.

Purpose of the Study:

• To present a utility-theoretic model for preferences over health, money, and time.
• To investigate the consistency of QALY measurement under varying wealth levels.
• To compare QALYs and willingness-to-pay (WTP) as preference-based outcome measures.

Main Methods:

• Development of a model incorporating health, money, and time preferences.
• Analysis of additive separable utility functions under standard QALY assumptions.
• Extension of the QALY model to include wealth-dependent utility weights.
• Comparison of QALYs and WTP within the utility-theoretic framework.

Main Results:

• Wealth-standardized QALY weights may vary with wealth, leading to inconsistent QALY measurement.
• Even with strict assumptions, QALYs and WTP are not equivalent individual-level preference measures.
• Individual WTP per QALY can depend on QALY gain magnitude and disease burden when health affects wealth utility.

Conclusions:

• The utility-theoretic foundation of QALYs requires careful consideration, especially regarding wealth effects.
• QALYs and WTP capture different aspects of individual preferences for health interventions.
• Further research is needed to understand and quantify the impact of wealth on preference measures in health economics.