Prepared for the Minister of Health and Aged Care.

I therefore assume a pre-requisite

knowledge of QALY-methodology.

As you well know, the QALY is achieved by multiplying two health metrics - duration and quality
of life - to form a combined index. Many see this as being the central strength of the QALY,
since it takes into consideration the notion that the value of life consists not merely in its
duration but also in its quality. According to the QALY system, then, the value of a year of life, is
never absolute; rather, its value is co-determined by the quality of that year of life. (Neumann
and Cohen 2018)

What I will be focusing on today is how these two sub-components of the QALY-system -
duration and quality - give rise to a major ethical problem, namely that QALY-guided analyses
lead to the disadvantaging of some of the most vulnerable members of society - the elderly,
chronically ill and disabled.

To see why, let us first consider an example. Suppose there are 2 patients with the same life-
expectancy, one with a pre-existing disability and one without a disability, both of whom are
treated for the same medical conditions. But because patient A has a disability which
complicates things, they require a different treatment than patient B. Both treatments carry
the same financial cost of $100,000 per treatment. Patient A receives treatment Y which
increases their QOL from 0.2 to 0.4 while extending their life by an 5 additional years (original
life expectancy = 80 years-of-age). Patient B receives treatment X which increases their QOL
from 0.7 to 0.9 and their life expectancy by an additional 5 years (original life expectancy = 80
years-of-age). The clinical efficacy of these two patients’ treatments is thus identical: they both
give rise to a 0.2 increase in QOL and an additional 5 years of life. Surely, then, the treatment
for both patients’ conditions should receive equal funding.

Let’s do the QALY-analysis to see what it has to say.

QALY’s gained calculations

Patient A : (0.4 x 85) - (0.2 x 80) = 42.5 - 24 = 18 QALY’s
Patient B : (0.9 x 85) - (0.7 x 80) = 76.5 - 56 = 20.5 QALY’s

QALY’s per $ spent calculations

Patient A : $200,000 / 18 = roughly $11,111 per QALY
Patient B : $200,000 / 20.5 = roughly $9756 per QALY

As we can see, two different pharmaceutical treatments which common-sense would tell us to
be equally worthy of funding, have turned out to be - according to the QALY system - not
equally fund-worthy. This is essentially because patient B’s treatment yields more QALY’s per
dollar spent, and is therefore, from a utilitarian perspective, more worthy of funding and thus
more likely to be funded. And if patient A’s treatment doesn’t receive funding or receives less
funding, this means that they will either have a larger out-of-pocket fee for treatment
(assuming that the pharmaceutical is already on the market), or (if the pharmaceutical is not
already on the market, or is still in its theoretical/experimental stages) that they may not
receive treatment at all (since without proper funding the pharmaceutical is unlikely to make it
onto the manufacturing line let alone into clinical trials, etc.)

The disparity in this situation is clear: the treatments for both patients promise the same
clinical benefit (an improvement of 0.2 in QOL and an additional 5 years of life, yet one
patient’s treatment will be supported by the government and the other’s will not.

What is the methodological cause of this resultant disparity? It is the fact that QALY
methodology uses an absolute rather than relative index of QOL. In other words, QALY
methodology places greater value on the level of health achieved, rather than the increase in
health; or as a group of scholars have put it, the QALY approach “values health states and not
changes in health states (Weinstein, Torrance and McGuire 2009, 5).

The real-world consequence of this methodological flaw is that those with a low post-treatment
health-states/QOL score (usually due to pre-existing chronic illness, old age or disability) will be
consistently disadvantaged by the QALY-system. This is because drugs or treatments intended
for this demographic (i.e. patient A’s treatment) will usually be associated with low post-
treatment QOL scores, even though these low scores have nothing to do with the inefficacy of
the pharmaceutical itself.

But is it fair to value health-states over health-gains? From the patient’s perspective, it seems
to me that health-gains should be valued over health-states. This is because, psychologically
speaking, increases in health are generally recognized and appreciated more than the mere
possession of a given health-state. Furthermore, if patient A has never experienced anything
higher than a 0.4 on the QOL scale, would not the experience of returning to 0.4 from 0.2 feel
like a full recovery? A recovery no smaller in psychological significance than patient B’s recovery
from from 0.7 to 0.9?

Given this, it seems to me probable that a health gain of X QOL points is just as meaningful -
from the patients point of view - regardless of how many QOL points they begin with. Obviously
more research is needed to be certain on this, but if my suspicion turns out to be correct, the
QOL sub-component of the QALY-system will need to be majorly revised so as to reflect in its
calculations an appreciation for health-gains and not just health-states.

So far we have focused on the quality (QOL) component of the QALY. Now we will turn to our
attention to duration.

To many, it may seem obvious that there is a moral difference between extending the life of a
patient by another 60 years versus another patients life by a couple of years, and that the
former deserves priority. But for some, such as John Harris, this is just another form of ageism.
An example for context: suppose there are two patients with different diseases requiring
different treatments: an otherwise healthy 20 year-old with a condition which reduces their
life-expectancy from 80 to 21 years-of-age, and a 90 year-old with a condition which also
reduces their life-expectancy to 1 additional year. Without going into further detail, we can be
quite certain that a QALY-analysis would privilege the funding of the 20 year-old’s treatment,
since it would likely lead to a longer life-expectancy, thus yielding a lower cost-per-QALY.

Harris is starkly opposed to this outcome. According to him, we should not preferentially fund
the 20 year-olds treatment. This is because the longer duration of life gained by the 20 year-old
is irrelevant. For Harris, all lives are equal, regardless of duration (and quality). (Harris 2005-
2007, 374) Thus the 90 year-olds treatment is just as worthy of funding as the 20 year-olds.

Harris continues to justify his view by arguing that “it cannot be demonstrated that the person
who stands to lose more life years if they die prematurely [i.e. the 20 year-old], stands to suffer
a greater loss than the person who has less life expectancy [i.e. the 90 year-old].” (Harris 2005-
2007, 373). There is some merit to this argument. Yes, technically speaking the 20 year-old with
their 60 years of potential loss stands to suffer no greater loss than the 90 year-old with their 1
year of potential loss. This is because, to put it crudely, they will be dead: the 20 year-old won’t
be ‘around’ to suffer the loss of 60 years.

Regardless of the strength of this argument, I would argue that it is misguided in that it
privileges one perspective - that of the patient, rather than that of, say, society as a whole.

From the perspective of society, that is, taking into account the interests and well-being of all
citizens generally, there is indeed a significant moral difference between extending the life of
the 20 year-old by 60 years and the life of the 90 year-old by 1 year. This is not because the
former has ‘more to lose’ (this would be taking the perspective of the patient) but because they
the patient have (now taking the perspective of society) ‘more to offer’. For obvious reasons,
the future potential value a 20 year-old has to society far exceeds, in the majority of cases, that
of a 90 year-old. This value manifests itself economically (working, earning and paying taxes),
socially (contributions to family and community) and creatively (artistic or intellectual products
which benefit society) - to name a few.

Does this mean that we should preferentially fund treatments intended for the otherwise
‘young and healthy’, a demographic which has ‘more to offer’, potentially excluding in the
process the elderly, the disabled and chronically ill? To some extent, yes. In the extreme case of
the 20 and 90 year-old, the question of who to privilege is, I think for most people, reasonably
obvious. However, in the earlier case of the abled versus disabled patient, I do think there is a
clear inequality which needs to be rectified.

But perhaps we also need to broaden our conception of what it means to have ‘more to offer’.
Perhaps if society was structured differently, perhaps if we held more inclusive values, values
not so focused on utility and efficiency - perhaps then the elderly, disabled and chronically ill
would no longer be seen as economic burdens, but instead members of society the extension
and enrichment of whose lives would certainly have much to offer.

The QALY-system is not without its flaws. I have shown how it disadvantages vulnerable
demographics in our society and privileges the ‘young and healthy’. I have also argued,
however, that a certain amount of this privileging is necessary for the well-being of society as a
whole. The question then is how do we decide when and when not to grant this privilege, and
in what scenarios it is morally justifiable to use a system which disadvantages one group and
advantages another?

As long as we live in a health-system with finite resources, these questions and problems will
not go away. Better we confront them honestly than cling to the transcendental truth (but
pragmatic impossibility) of ‘all lives are equal’.

Bibliography
Harris, John. 2005-2007. "It's Not NICE to Discriminate." Journal of Medical Ethics 373-375.
Neumann, Peter J., and Joshua T. Cohen. 2018. "QALYs in 2018—Advantages and Concerns."
JAMA 2473-2474. Accessed April 13, 2022. https://jamanetwork-
com.ezproxy.library.uq.edu.au/journals/jama/fullarticle/2682917.
Weinstein, Milton C., George Torrance, and Alistair McGuire. 2009. "QALY's: The Basics."
Value in Health 5-9.