Health policy in the United States centers on providing access to all of the nation’s inhabitants in need of health care, controlling costs, and assuring the provision of high quality services. Related to the notion of quality is the necessity of having suitable quantitative measures to evaluate the health of the population. As indicated in an article published in January 2023 in the Journal of Health Economics, mortality indicators (such as life expectancy) typically were used first. Although still of great importance, a growing consensus exists to combine them with morbidity indicators. Presently, it is widely accepted that the benefit a patient derives from a particular health care intervention can be defined according to two natural dimensions: quality of life and quantity of life.
Quality-adjusted life years (QALYs) were developed to combine the two natural dimensions. Arguably it is the most widely accepted methodology in the economic evaluation of health care, serving as a reference standard in cost-effectiveness analysis. Alternative health outcome measures also became popular, such as Disability-adjusted life years (DALYs). Primarily a measure of disease burden, it arose in the early 1990s as a result of an effort to quantify the global burden of premature death, disease, and injury and to make recommendations that would improve health, particularly in developing nations.
An illustration of how various measures are employed operationally is provided by the Inflation Reduction Act (P.L. 117-169) enacted in August 2022. This new law empowers the Centers for Medicare and Medicaid Services (CMS) to negotiate directly with pharmaceutical companies to set prices for a limited set of high-cost drugs covered by Medicare. The law does not, however, detail a process for determining fair prices, other than a consideration for how long drugs are on the market. A report published on October 27, 2022 by The Commonwealth Fund discusses how historically, prices for drugs in the U.S. have been disconnected from the clinical benefit they provide. Without this information, health insurers and pharmacy benefit managers have no way of knowing which investments are the most beneficial. Several approaches are described to assess a drug’s value, each with its advantages and drawbacks. Along with QALYs and DALYs, they include: Life year (LY), Equal value life years (evLY), Health years in total (HYT), Value of a statistical life (VSL), Added benefit, Clinical effectiveness rating, Multicriteria decision analysis (MCDA), and Social return on investment (SROI).
Some controversy exists in this aspect of health policy as shown by the introduction on January 24, 2023 of the Protecting Health Care for All Patients Act (H.R. 485) in Congress. The bill would prohibit the use of QALYs in all federal programs, an expansion from the current prohibition that only applies in a limited fashion to the Medicare program. A rationale is that this discriminatory metric intentionally devalues treatments for disabled individuals and patients with chronic illnesses for purposes of determining whether the treatment is cost-effective enough to be paid for by the federal government.