QALY: The Left Will Explode

And so will the rest of us, of course.  Obamacare removes any limit that an insurance company can place on an individual per year or per life of the policy.  Which is niffty, because if we had the Single Payer, the government itself would impose that very limit.

It is important to realize that not even Obama is able to deny the “Laws of Economic Physics”.  That is, the cost of insurance can not be less than the cost of care.  And so, as other countries are finding out, when medical care is felt as “free”, the demand for that medical care will go up.  Up so far and so fast that those nations and the systems they have implemented are now in financial ruin.

Introduce QALY:  Qaulity-Adjusted Life Year

This is the concept of how many quality years a patient has left to live.  And it is this threshold that governments are using to determine when they will and when they won’t provide care:

The hypothetical curve in Exhibit reflects the fact that some relatively low-cost medical interventions can yield additional QALYs at relatively low incremental costs—for example, immunizations or prenatal care. At the other end of the spectrum, however, the health system can wrestle additional life years from nature’s course only at increasingly higher incremental costs. Examples of such high-cost procedures would be diagnostic tests broadly applied to populations with a low incidence of the disease targeted by the test, especially in the presence of many false positives. Heroic medical intervention at life’s beginning or end also falls into the high-cost range of the QALY supply curve.

The thrust of modern cost-effectiveness research—a distinct branch of health services research—is aimed at identifying the approximate shape of this curve for policymakers. In principle, policymakers should use that information to answer two morally troublesome questions faced by every country. First, how far up the QALY supply should the health system go to procure added QALYs? Second, should the maximum price to be paid for added QALYs be uniformly applied to all members of society or be allowed to vary with the individual patient’s ability to pay or with other factors, such as social status?

As Julian Le Grand suggests, the National Institute for Clinical Effectiveness (NICE) established by the Blair government in the United Kingdom appears to be using a cutoff price of £30,000 (about US$53,000 at the current exchange rate) per QALY beyond which treatments should not be publicly funded. Above this threshold, U.K. patients with discretionary funds or supplemental private health insurance could procure more costly treatments from the country’s relatively small private health sector. That cutoff price is mentioned also by Nancy Devlin and colleagues, who write that “it is clear from papers presented to NICE’s Annual Public Meeting that £30,000 per QALY has effectively become the benchmark for cost-effectiveness,” although they add that “there have been no directions from the Department of Health or the National Assembly for Wales that they consider this to be an appropriate test.”

MmmmHmmm…I can NOT wait for this to come to a USA near you.

You know what this means?  It means that if someone is diagnosed with an aggressive form of  glioma, the government will refuse to treat him.

2 responses to “QALY: The Left Will Explode

  1. HR 3590, which was just passed into law, specifically forbids the soon-to-be-created comparative effectiveness research Institute from using QALYs. It is in section 937(a)(1) which states that:

    …The Patient-Centered Outcomes Research Institute established under section 1181(b)(1) shall not develop or employ a dollars-per-quality adjusted life year (or similar measure that discounts the value of a life because of an individual’s disability) as a threshold to establish what type of health care is cost effective or recommended. The Secretary shall not utilize such an adjusted life year (or such a similar measure) as a threshold to determine coverage, reimbursement, or incentive programs under title XVIII.’.

    So I’m not sure that this is coming to a “USA near you” anytime soon–at least not viz the health reform bill. Note, however, that private insurance companies are using exactly the same kind of measurements to deny people coverage.

    Milton Weinstein has written extensively on the issue. As he points out, QALYs, can be used to adjust health care spending without decreasing care, assuming that health care resources are being spent inefficiently, which they currently are.

    • HR 3590, which was just passed into law, specifically forbids the soon-to-be-created comparative effectiveness research Institute from using QALYs.

      Jordan, thanks for catchin’ that; I didn’t know.

      However, I think that it’s important to know that right now, we don’t have a single payer system so really, the government is under no obligation to pay out. As such, it’s to their benefit to explicitly prohibit this behavior; they’re really regulating the private insurance companies.

      If the day ever comes, and it may not, that we do move to a single payer system, QALY will be one of the only ways that the government can contain cost.

      And I think it’s important to point out, private people, in consultation with their family, doctor and religious guide, often implement the concept of a QALY in their own private decisions. And I like it that way. In the privacy of their homes.

Leave a Reply