prevented vs. life years gained) but is restricted to the comparisons of relative
(technical) efficiency in the same disease area using disease-specific outcome
measures.^9 To avoid the problem of noncomparability, benefits in CUA are
expressed in terms of quality-adjusted life years (QALYs), an index comprising
both length and quality of life. Although still debated,^10 it is generally assumed that
the QALY is a comprehensive measure of health that captures enough aspects of
health to be considered an appropriate instrument for measuring outcomes in the
field of curative health care. In theory, all health benefits (life years gained and
cases prevented alike) could be expressed as QALYs, and all intervention outcomes
(i.e., ICERs) would be mutually comparable. Hence, the QALY approach can be
used to measure and value the outcome of any intervention, regardless of whether
the intervention improves the quality of patient’s life or extends life or adds to any
combination between the two dimensions. A cost–utility analysis thus evaluates
alternative interventions in terms of incremental QALYs and costs and summarizes
the result in an ICER representing the cost per QALY gained. Theoretically, and
assuming all relevant information is available and captured in a CUA, the use of a
single measure of health helps decision makers address both technical and
allocative efficiency.^11 The cost–utility framework is now accepted as the reference
case for health care economic evaluation in jurisdictions such as the UK, the
Netherlands, Canada, and Australia. In this chapter, for simplicity reasons, we
use the terms “cost-effectiveness” as a generic term, describing all types of evi-
dence produced by economic evaluations, regardless of how the health benefits are
measured and valued.
2.1 QALY as a Measure of Health Benefits
For the purpose of conducting economic evaluations, QALYs can be calculated in
several different ways, although frequently using the generic and validated
multiattribute EQ-5D instrument.^12 The EQ-5D describes health states using five
different dimensions, containing three levels each.^13
The dimensions and levels of the three-level instrument (levels presented in
brackets) are as follows:
(^9) Technical efficiency refers to maximizing the level of output from a given level of input.
(^10) For instance, by Mooney ( 1989 ) and Neumann and Greenberg ( 2009 ).
(^11) Interventions compete for implementation; allocative efficiency is achieved when it is impossi-
ble to increase overall benefits produced by the health care system by reallocating resources
between interventions. This occurs when the ratio of marginal benefits to marginal costs is equal
across health care interventions in the system.
(^12) User guide is available on the Euro-QoL website,http://www.euroqol.org/.
(^13) The five-level instrument is being developed; for more details, see, for instance, Herdman
et al. ( 2011 ), pp. 1727–1736.
112 A. Bobinac and M. Vehovec