The assessment of value in health economics: utility and capability

Excerpt

There is a discussion within the field of health economics about the appropriate informational base on which to assess value. One method to assess value in medical interventions is with the quality-adjusted life year (QALY). In the calculation of QALYs, the value of a life year is adjusted with a utility value. Multiple conceptualizations of utility exist. In one of these conceptualizations, utility represents a positive mental state; in another, utility reflects the preferences of individuals for certain things.

However, according to Nobel Laureate Amartya Sen, these conceptualizations of utility have limitations. Essentially, he argues that things might have an economic value beyond utility for a multitude of reasons. The first reason being that people might place value on their ability to choose between different alternatives beyond the availability of an alternative that maximizes an individual's utility, for the sake of choice itself. Second, individuals might choose things that go against their personal preferences for a variety of different motivations. The third reason is related to the positive mental health state conceptualization of utility. One particular problem with this conceptualization is that people adapt to limitations. This leads to individuals with severe disabilities reporting higher levels of subjective wellbeing than expected. In short, utility itself is too limited of a concept to use as the informational base for the assessment of value.

Instead, Sen argues that the value assessment should be based on the capabilities of individuals. Capabilities are understood as the freedom of individuals to do or to be. That what people are or are doing with their freedom, is called functionings. Sen argues that the use of capabilities as an informational base is preferred over utility and functioning. Namely, through measurement of capability, it is possible to measure all the alternative options available to an individual. This includes the utility derived from those options as well as the value of being able to choose between options. Furthermore, adaptation by individuals to limitations does not influence the assessment of value, since the informational base of capability is concerned with the freedom of individuals to do or be. Thus, by using capabilities as the informational base, it is possible to assess the value of medical interventions without the problems posed by using utility.

However, is the measurement of capabilities alone sufficient to assess value? Based on theoretical considerations by Fleurbay and Clark, as well as observational studies in patients affected by the locked-in syndrome, a medical condition in which a patient is aware but cannot communicate due to muscle paralysis, this chapter concludes that this is not the case. Capability, functioning and utility are all, when used individually, insufficient to estimate the value of a medical intervention. Instead, information about capability, functioning and utility needs to be combined for an appropriate assessment of the value of medical interventions.