Cost-utility analysis

Abstract

Decisions have to be made about allocating health resources. Currently the best economic evaluation method for doing this is cost-utility analysis. This compares the costs of different procedures with their outcomes measured in "utility based" units--that is, units that relate to a person's level of wellbeing. The most commonly used unit is the quality adjusted life year (QALY). QALYs are calculated by estimating the total life years gained from a procedure and weighting each year to reflect the quality of life in that year. To compare outcomes of different programmes the Rosser index is one measure that is widely used to assign quality of life scores to patients. Combined with a measure of life years gained from a procedure, this enables QALYs to be calculated and procedures ranked according to cost per QALY gained. In this article Ray Robinson explains the measures used and discusses how QALY league tables can be used to guide decisions on resource allocation.