How much are Americans willing to pay for a quality-adjusted life year?

Cost-effectiveness analysis made its first appearance in the health care literature more than 4 decades ago. In Britain, the National Institute of Clinical Excellence (NICE) explicitly considers cost per quality-adjusted life year (QALY) gained among its criteria for coverage recommendations to the National Health Service; some observers have inferred that explicit criteria such as £30,000 per QALY may be used to guide these recommendations. The World Health Organization has proposed that developing countries might use a cost-per-QALY threshold of 3 times the per-capita gross domestic product to guide their health care resource allocations. Despite widespread use elsewhere in the world, cost-effectiveness analysis has gained only limited traction in the United States as an explicit guide to clinical practice, insurance coverage, and policy decisions. It seems that Americans do not have the inclination to focus on the fact that even in the wealthiest country in the world, resources are limited, and not all beneficial health services can be provided to everyone who might potentially benefit from them. Rationing among health services occurs largely by default and not by design. In the United States, cost per QALY is sometimes cited as part of the justification for guidelines for clinical practice or preventive services, and a decade ago a panel was convened by the US Public Health Service to provide guidance to practitioners of cost-effectiveness analysis. However, despite the attention given to cost-effectiveness analysis in medical journals, The Centers for Medicare and Medicaid Services have avoided explicit use of cost-effectiveness criteria in coverage decisions, and it is unclear to what degree cost-effectiveness is used to guide coverage decisions in the private sector. Because cost per QALY is not used in any systematic or consistent way in the United States, it should not be surprising that there is no consensus as to the appropriate value of cost per QALY that should guide health care decisions and policies. The number $50,000 per QALY has become a mythical benchmark for cost per QALY in this country, although it is impossible to trace its origins. Some authors of cost-effectiveness studies refer to this number when reporting subgroup analyses or sensitivity analyses; these kinds of statements should not be interpreted as endorsements of a $50,000 per QALY threshold, but rather as a convenient way of representing the conclusion that the intervention in question is good value for money even under pessimistic assumptions. With that interpretation, the reference to the $50,000 threshold could be interpreted as an implied lower bound on the value of a QALY. Braithwaite et al, in this issue of Medical Care, set out to deduce lower and upper bounds on the value Americans place on quality-adjusted life years by analyzing the implications of aggregate decisions that citizens of this country have made—to pay for the increase in the cost of medical care services since 1950; or have not made—to insure the uninsured. They argue that because the gains in life expectancy since 1950 have been bought at an estimated average cost of $183,000 per year of life expectancy gained, on average Americans must be willing to pay at least that much for a year of life. When optimistic imputations of quality of life gains are also considered, the implied lower bound on the value of a QALY drops to $109,000. The number drops below $100,000 when they