Addressing the failure of economic measures of value-for-money to reflect societal preferences for health and social care

With increasing costs, and an aging population, it is inevitable that demand for health and social care exceeds the available resources. Policymakers seek to maximise value-for-money and, increasingly, use quantitative economic methods to guide such policy. Current characterisation of value is largely based upon health utility and may not align with societal preferences for attributes such as care processes, autonomy and dignity. The limited concept of value provided by quality adjusted life years (QALY), with other factors adding weight to the QALY or inflating thresholds, may distort funding decisions. This essay explores the limitations of current economic methods and argues that these prioritise cost utility calculations and lack appropriate measures for other attributes of health or social care. Many methods require assumptions and simplifications, such as the equivalence of chosen outcomes, leading to unintended or unconsidered consequences. The choice of perspective, handling of unrelated costs, and methodological choices may conceal implicit value judgements, and the values and preferences used may reflect the preferences of specific stakeholders but fail to represent the interests of those likely to bear the opportunity costs of policy decisions. Areas are identified in which there is the potential for improved alignment of decisions with societal values. Existing methods could be used more extensively to identify and quantify societal preferences in terms of monetary value or equivalent health utility. Changes to decision-making processes to favour a net benefit approach over the use of a variable willingness-to-pay threshold, may reduce the current primacy of cost per QALY calculations, and there is a need for a more rigorous approach to the consideration of opportunity costs. It is concluded that without such changes there is a danger that high-cost new technologies will displace more caring aspects of health and social care that are highly valued by society.