Health policy should give more priority to health programmes that benefit the elderly and save lives now. It should give less priority to preventive activities and programmes that benefit the young. These are the conclusions of new research by Han Bleichrodt and Jose Luis Pinto, published in the Economic Journal.
The researchers note that a common assumption in health policy is that each ''life-year'' gained counts the same – so that a life-year gained in 50 years time carries equal weight as a life-year gained now. This implies, for example, that saving one 25-year old is equally important as saving five 65-year olds. It also implies that saving one individual now is equally valuable as saving one individual in the future. The study examines this assumption using a new methodology that corrects for biases and errors in people''s responses. It finds that people do not value each life-year gained equally. Instead, life-years gained now are more important than those gained in the future. People''s preferences imply that a life-year gained in 50 years time is only equivalent to 0.28 lifeyears gained now – so in fact, people consider saving one 25-year old equally important as saving 3.3 65-year olds.
The joint problems of ageing societies and rapid progress in medical technology have led to a fast increase in medical spending in all countries: most developed countries are now spending over 10% of their GNP on health care. To control this increase, economic evaluations of health care have become an important tool in health policy. The idea behind economic evaluations of health care is simple: only those treatments should be reimbursed that lead to the largest gains in health for a given budget. That way, the health of the population is maximised and the health budget is optimally spent.
To maximise the health of the population is, however, easier said than done. Health cannot be measured in an objective manner. Measuring health requires subjective judgments and, consequently, there is no unique way of establishing priorities between treatments. These findings have important implications for health policy. In particular, health policy should give more priority to health care programmes benefiting the elderly and to programmes that save lives now. Current policy gives too much priority to health care programmes that benefit the young and to preventive activities.
''The Validity of QALYS under Non-expected Utility'' by Han Bleichrodt and Jose Luis Pinto is published in the April 2005 Economic Journal. Han Bleichrodt is at the Department of Economics at Erasmus University, Rotterdam; Jose Luis Pinto is at the Department of Economics and Business at Universitat Pompeu Fabra, Barcelona