QALY Bashing: The Sequels
Issue 5
SCOTT RAMSEY, MD, PHD
Senior Partner and Chief Medical Officer, Curta
Adjunct Professor at the University of Washington, School of Pharmacy, CHOICE Institute
Professor at the University of Washington, School of Medicine
The QALY is under attack… again
The quality adjusted life year (QALY) had a modest news splash recently when it was reported that the US Congress had introduced legislation that would ban CMS’s ability to use QALYs to negotiate drug prices as part of the Inflation Reduction Act (1). That congressional legislators have any knowledge, let alone interest, in the QALY creates an odd mix of pride and dread for me. Pride that people in the “real world” apparently know something about my field of research; dread that the way they know about it is primarily through interest groups, some with less than righteous motivations. More on that in a moment.
QALYs have been criticized almost since their inception. I’ve been around long enough to see the “birth” of the modern QALY and its ascent to the dominant measure of health benefit in cost-effectiveness analysis. It sustained an internal attack about how to measure health state utilities (direct measures like the standard gamble and time tradeoff versus multi-attribute surveys) that for a time devolved into a discussion about whether the whole enterprise was legitimate, and we should go back to “pure approaches” that simply ask people how much they would be willing to pay for better health and life expectancy.* If the QALY was a movie hero, we might be on Sequel 6.
I won’t dwell here on the shortcomings of the QALY: they have been well described elsewhere.2 What I want to focus on is why the QALY has continued to be the dominant measure of health benefit for value assessments worldwide despite all the criticism. Within that story of persistence are lessons for those who continue to bash the QALY.
To cut to the chase, I believe that there are three major reasons for the enduring popularity of the QALY:
Simplicity and intuitiveness. The simplicity of the QALY is its genius. Everyone from policymakers to clinicians to lay persons grasp the idea that maintaining or improving quality and quantity of life are fundamental goals of health care interventions. The two components of the QALY—health state utilities and survival—capture and summarize these concepts in a single, easy to understand number.
Ease to generate and use. With widespread availability of multi-attribute utility surveys such as the EQ5D, utility weights are being generated easily in numerous languages for hundreds of different health conditions. The low-burden surveys are frequently included in clinical trials for new treatments. Survival data from population and disease registries are easily accessible. Thousands of research publications and registries such as the Tufts CEA Registry3 allow analysts low-cost, easy access to utility and QALY scores for hundreds of conditions.
Resistance to gaming. A simple, transparent rule is more difficult to manipulate in ways that advantage an interest group. Yes, it’s possible to influence the QALY (example: selecting study populations that have survival or quality of life profiles that fit an agenda), but it’s fairly easy for others to spot such tactics.
“In summary, the QALY is an easy-to-use and interpret tool for a hard job: health resource allocation. I think that this is why some people can’t resist bashing it”
Today, QALYs are being criticized for being overly reductive and potentially discriminatory.4 These arguments have been picked up by manufacturers and advocacy groups, who of course have self-interested reasons for dispatching with the system built around QALYs. We can be sympathetic with the patient perspective on this issue, but before we chuck or “enhance” the QALY, it’s worth asking a few questions:
What evidence do we have that organizations that make coverage and payment decisions based on QALYs have misallocated resources in ways that have harmed populations?
Do we have an alternative the QALY that is equally intuitive, easy to generate, and resistant to manipulation?
Right now, the answers are “None” and “No.”
Let’s take a currently popular enhancement to the QALY: the ISPOR Value Flower, a 12-petaled figure that includes 11 “overlooked or underappreciated” attributes of treatments in addition to the QALY (5). While the 11 attributes undoubtably have merit, they will not apply equally across the disease and treatment landscape. How will we operationalize them in a decision-making context? Perhaps HTA groups can hire people who are able to think in 12 dimensions, but that will not solve the gaming problem—inflating the importance of one petal/attribute to sway a decision. Finally, in the court of public opinion, the Value Flower obscures beautiful simplicity of the QALY in a murky sea of individual attributes with mathematically dense quantifications.
Is there a way forward?
There may be a way to maintain the QALY as the core element for resource allocation decisions while at the same time accounting for “extra-QALY” issues. It’s important to remember that the most frequent use of the QALY is to negotiate more favorable purchase prices for new technologies (i.e. to raise their value). The fear tactic fed to the public is that the QALY is used to restrict access to a new beneficial drug just because it is expensive. The first path forward is education: tell the real story of the QALY: that is has allowed access to beneficial and costly new therapies precisely because it works as stated: it allows countries to negotiate more favorable prices that permit placing products on their formularies**(6). Second, in those situations where there is a standoff—manufacturers refuse to negotiate on price and the product stays off the market—bring the extra-QALY impacts, alternative metrics, equity issues, etcetera into the discussion. Granted, there will have to be standards and a high bar for these discussions or manufacturers will default to this tactic more and more often. Finally, the research community should begin research to see if using the QALY has adversely impacted certain groups. Here, adverse impacts will have to be gauged against the status quo, not some idealized allocation scheme. Countries deal with new treatments one at a time, as they come to market, and it will always be that way.
This points to the real problem in healthcare: the spending trend, driven in large part by new health technology, is unsupportable. As a profession, economists have embraced the difficult job of developing a tool that balances that reality against the public’s appetite for new treatments that are provided in an insurance system that highly subsidizes them at the point of purchase. Sometimes, we get lost in the fog of our own methodology when we try to find better approaches than what is currently used. Will a new system (value flower, evLYG’s, HYT’s and so on2) get us to a better place—maximizing health for limited budget—or will it simply provide a mechanism for lowering the bar for adopting expensive new technologies?
In summary, QALY-bashing is likely to persist as long as the QALY remains the dominant measure of health benefit for health technology assessments worldwide. As we think about alternatives to the QALY, we should remember that economists’ tools are tried in the court of public opinion. Despite all the bashing, the QALY has served its purpose quite effectively for a long time.
*I’ve always been amused that so many economists fail to see how asking “willingness to pay” questions might offend people, particularly those who are ill and their loved ones, let alone provide accurate estimates “contingent” on the existence of a perfect market.
**The United States is a glaring exception to this statement: in the US world of Pharmacy Benefit Manager’s dominancy and their opaque decision processes that probably increase prices for many new drugs. QALY’s rarely factor into commercial insurers’ decisions. Even before congressional legislation tied their hands, Medicare and Medicaid have been exceptionally timid when it comes to even thinking about using QALYs for coverage decisions.
Scott Ramsey, MD, PhD
Senior Partner and Chief Medical Officer, Curta
REFERENCES
Sullivan SD, Lakdawalla DN, Devine B, et al. Alternatives To The QALY For Comparative Effectiveness Research. Health Affairs Forefront. 2023 Nov 21.
Neumann PJ, Garrison LP, Willke RJ. The History and Future of the "ISPOR Value Flower": Addressing Limitations of Conventional Cost-Effectiveness Analysis. Value Health. 2022 Apr;25(4):558-565. doi: 10.1016/j.jval.2022.01.010.
Rand LZ, Raymakers A, Rome BN. Congress' Misguided Plan to Ban QALYs. JAMA. 2023 Jun 27;329(24):2125-2126. doi: 10.1001/jama.2023.8695.