Will ICER’s Response to Attacks on the QALY Quiet the Critics?

Date: December 18, 2018

By Joshua T. Cohen, PhD, Daniel A. Ollendorf, PhD, Peter J. Neumann, ScD

Last week, ICER published a two-page note[1] under the headline, “ICER Describes for Patients and Policymakers Why the QALY Is Considered the Best Way to Reward the Care that Improves Patients’ Lives.” In this blog, we consider key issues raised by this note.

Why now?

The Partnership to Improve Patient Care (PIPC) has recently renewed its criticism[2] of the quality-adjusted life year (QALY) (and ICER’s use of the metric), noting that measuring QALYs is difficult, that different utility elicitation instruments come up with “wildly” different results, and that the QALY doesn’t reflect preference differences across patients.

However, central to PIPC’s complaint, and its recent criticism of CVS Caremark’s announcement[3] that the company will use QALY-based cost-effectiveness analyses in its coverage decisions, is the idea that the QALY discriminates against individuals with an impairment or illness. In a clever graphic, PIPC asks, “What’s the value of your life to CVS?” A number line has a sketched “healthy person” at one end, labeled with the number “0.9” (QALYs per year); at the other end is a person with cancer, labeled with the number “0.2” (QALYs per year). The accompanying letter from PIPC is headlined, “Over 90 Stakeholder Groups to CVS: Don't Discriminate on Care.”

ICER’s QALY defense

ICER’s note effectively turns the PIPC discrimination graphic on its head by pointing out that the “QALY records the degree to which a treatment improves patients’ lives” (italics added). In other words, the key implication of the “gap” between the healthy person (0.9 QALYs per year) and the patient with cancer (0.2 QALYs per year) in the PIPC graphic is not that the healthy person’s life is worth more than the life of the person with cancer. Instead, it is that cancer can be such a devastating disease that improving quality of life for patients with cancer confers a large benefit – in this hypothetical example, up to 0.7 QALYs every year.

Another way of thinking about it is this: only a measure that acknowledges that chronic disease takes away value can reflect the value conferred by treatments that improve symptoms. Measures that don’t acknowledge this impact cannot distinguish between treatments that extend life and treatments that both extend life and improve quality of life. The QALY is useful and persists because it awards credit for both life extension and reduced symptoms –attributes that people value.

What about alternatives?

PIPC[2] suggests an alternative to QALY-based cost-effectiveness analysis, referring, for example, to the Patient Perspective Value Framework (PPVF)[4] developed by FasterCures in partnership with Avalere Health. However, while the PPVF is helpful in detailing many of the attributes that patients care about, it does not assign a value to these attributes, and so cannot inform the tradeoffs attending any resource allocation decision.

We have argued[5] that ICER has gained prominence because it has stepped into a void and helps answer a question that payers and society at large must address – i.e., how do we allocate finite healthcare resources to best improve population health? PIPC’s proposed solution does not address this question.

In addition, if PIPC were to embrace a framework that designates at least some effective interventions as having “low value”, it would discover that it must confront some disappointed patients who would likely feel that the framework had not taken their preferences into account.

ICER’s new evLYG metric

Acknowledging that QALYs are controversial, ICER notes that it will soon include an alternative measure of clinical benefit alongside its base case cost-per-QALY assessments. The so-called “Equal Value of Life Years Gained” (evLYG) assessments are essentially sensitivity analyses of cost-effectiveness results that do not adjust for quality of life differences arising from “age, severity of illness, or level of disability.”[1] For those uncomfortable with QALYs, evLYG assessments offer what they might regard as “fair” or “equal” evaluations, assigning an equal value to life extension regardless of the patient’s current state of health. Offering both a cost-per-QALY gained assessment and an evLYG assessment allows decision makers to examine either criterion.

The evLYG measure has its own discriminatory implications, however. Consider an assessment of two medications to treat a cancer that without treatment diminishes quality of life to 0.2 QALYs per year (corresponding to the example in PIPC’s illustration, mentioned above) and causes imminent death. Suppose that both treatments extend life by 2 years. However, the first treatment extends length of life without improving symptoms (quality of life continues at 0.2 QALYs per year), while the second improves quality of life to 0.8 QALYs per year. Compared to the alternative of no treatment and imminent death (approximately 0 QALYs), the QALY assessment credits the first treatment with a gain of 2×0.2 QALYs=0.4 QALYs, and the second treatment with a gain of 2×0.8 QALYs=1.6 QALYs. The difference between the two treatments of 1.6 QALYs-0.4 QALYs=1.2 QALYs represents the incremental clinical value of treatment 2 (compared to treatment 1) recognized by the QALY measure. 

On the other hand, the evLYG measure credits both treatments in this example with the same gain – for simplicity, let’s say the equal value is 0.9 evLYGs per year, resulting in 1.8 evLYGs for each treatment. Although the evLYG measure does not “discriminate” against cancer patients by designating a year of life with their condition as “worth less” than a year of life for an individual in typical health, it can fail to recognize the value of medications that improve symptoms for these patients (in addition to potentially extending their lives). In the context of a decision, the evLYG can harm cancer patients by failing to warrant even a small additional expenditure for the second treatment (which improves quality of life), compared to the first (which does not).

Another question is whether the choice between QALYs and evLYGs influences cost-effectiveness analysis results. In some cases, it certainly will – especially in the case of conditions mainly (or only) affecting quality of life, such as mental health, rheumatoid arthritis, back pain, and so forth. We suspect, however, that in most cases cost-effectiveness results will not vary much in response to whether an analysis uses the cost-per-QALY or cost-per-evLYG measure. For example, Chapman et al.[6] reported that cost-per-QALY and cost-per-LY assessments usually produce results that differ modestly. Importantly, in the vast majority of cases, any differences in ratios are small. In few cases does it turn out that one ratio is below a key benchmark (e.g., $50,000 or $100,000 per QALY or year) while the other exceeds this benchmark.

What to do in the face of imperfect health benefit measures?

Given the evLYG measure’s limitations with regard to recognizing quality of life benefits, we believe it is best suited for sensitivity analyses of a primary estimate that uses QALYs. QALYs have limitations as we have noted elsewhere,[7] but they account for key outcome attributes, including length and quality of life, and they provide payers and decision makers a way to assess tradeoffs between clinical benefits and resource use (by comparing cost-effectiveness ratios to a benchmark[8] or to each other). ISPOR’s recent Special Task Force on Value Frameworks recommends[9] additional research on methods to augment the QALY, and CEVR will shortly be embarking on such an effort. However, while that research continues, we see ICER’s approach -– i.e., using QALYs as an input to a broad discussion of clinical benefit, context, and value to all stakeholders in the health care system – as reasonable.


1.         Institute for Clinical and Economic Review, The QALY: Rewarding the care that most improves patients’ lives. 2018.

2.         Partnership to Improve Patient Care (PIPC), Uses and misuses of the QALY: Ethical issues with QALYs and alternative measures of value: Summary. 2017.

3.         Partnership to Improve Patient Care (PIPC). Tell CVS: Value our health! 2018; Available from: http://www.pipcpatients.org/cv....

4.         FasterCures and Avalere, Patient-Perspective Value Framework (PPVF): Version 1.0. 2017.

5.         Neumann, P. and J. Cohen, America's NICE?, in Health Affairs Blog. 2018.

6.         Chapman, R.H., et al., When does quality-adjusting life-years matter in cost-effectiveness analysis? Health Econ, 2004. 13(5): p. 429-36.

7.         Neumann, P.J. and J.T. Cohen, QALYs in 2018-Advantages and Concerns. Jama, 2018. 319(24): p. 2473-2474.

8.         Neumann, P.J., J.T. Cohen, and M.C. Weinstein, Updating cost-effectiveness--the curious resilience of the $50,000-per-QALY threshold. N Engl J Med, 2014. 371(9): p. 796-7.

9.         Garrison, L.P., Jr., et al., A Health Economics Approach to US Value Assessment Frameworks-Summary and Recommendations of the ISPOR Special Task Force Report [7]. Value Health, 2018. 21(2): p. 161-165.

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