Discounting Health Effects in Pharmacoeconomic Evaluations: Current Controversies
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Pharmacoeconomics 2006; 24 (12): 1273-1274 1170-7690/06/0012-1273/$39.95/0 © 2006 Adis Data Information BV. All rights reserved.
Discounting Health Effects in Pharmacoeconomic Evaluations: Current Controversies Bos et al.[1] give a detailed assessment of issues surrounding the discounting of health effects. They focus on some of the complex aspects, but there are certain very basic issues that may merit some more attention. By way of illustration, the issue of discounting QALYs can be split into two components. First, can QALYs be compared with each other and aggregated? Second, if they can, and they refer to different times, should they be discounted (i.e. should there be a non-zero discount rate)? The discussion to date seems to focus almost entirely on the latter question, but the former is perhaps even more important. To address the first, it can be illuminating to consider something other than health as a way of identifying the problem. Take cars as an example. Can we compare all cars and aggregate them? In particular, can we talk about the total output of cars over a number of years, say output in a decade? We could, but it would depend on the use for which the data are required. In several uses we might consider the timing to be important such as when considering employment or income generated, or for meeting demand. To sidestep this difficulty in an evaluation, we might consider a ‘representative year’, conducting an assessment on the basis of a given number of cars produced per year. Even then we are aggregating over a year, but this is common in economics while we still discount at the annual level. Fundamentally, the question is whether a car made in year X can be compared with a car made in year Y. While we might simply aggregate car production over a number of years, we would be very careful about the interpretation of the resulting figures. In particular, we are likely to consider it inappropriate to mix such car output figures with
cost-of-production figures where costs are spread over several years. Now, on the second component, consider discounting car production in the same manner as has been suggested for health. Presumably we would be calculating not total production of cars, but some measure of ‘present cars’. What does this mean? If we discount in this way, we are really trying to get some measure that can be compared with the present value of costs. In other words, we are trying to simulate a cost-benefit analysis (CBA), the only difference being that we are using a different ‘currency’ to measure cars. We would be assuming a constant ‘price’ for each unit, save only for some adjustment according to the discounting. This is questionable when applied to life, according to Nord,[2] in his discussion of the ‘fair innings’ approach. Let us now assume that we find it acceptable to talk in terms of measures such as ‘present life years’. Instead of seeing ourselves as having a life expectancy at birth of, for example, 75 years, we can expect to live 11 present years (discounting at 10%). Would the
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