Valuing the benefits and costs of health care programmes: where's the 'extra' in extra-welfarism?

Abstract

The application of Sen's notion of capabilities to problems of the allocation of resources to health in the form of an extra-welfarist framework underlies the justification of quality adjusted life years (QALYs) as the method for valuing the benefits of health care. In this paper we critically appraise this application from both conceptual and empirical perspectives. We show that the alleged limitations of the welfarist approach are essentially limitations in its application, not in the capacity of the approach to accommodate the concerns of extra-welfarists. Moreover, the arguments used to justify the application of the extra-welfarist framework are essentially welfarist. We demonstrate that the methods used to measure QALYs share their basic theoretical roots with welfarist valuation methods, such as willingness to pay (WTP). Although QALYs and WTP share many challenges, we argue that WTP provides a method which performs better with respect to those challenges. In the context of evaluating alternative allocations of health care resources we are left asking what is 'extra' in extra-welfarism?