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What Does the Value of Modern Medicine Say About the $50,000 per Quality-Adjusted Life-Year Decision Rule?

Braithwaite, R Scott MD, MSc*; Meltzer, David O. MD, PhD; King, Joseph T. Jr MD; Leslie, Douglas PhD§; Roberts, Mark S. MD, MPP

doi: 10.1097/MLR.0b013e31815c31a7
Original Article

Background: In the United States, $50,000 per Quality-Adjusted Life-Year (QALY) is a decision rule that is often used to guide interpretation of cost-effectiveness analyses. However, many investigators have questioned the scientific basis of this rule, and it has not been updated.

Methods: We used 2 separate approaches to investigate whether the $50,000 per QALY rule is consistent with current resource allocation decisions. To infer a lower bound for the decision rule, we estimated the incremental cost-effectiveness of recent (2003) versus pre-“modern era” (1950) medical care in the United States. To infer an upper bound for the decision rule, we estimated the incremental cost-effectiveness of unsubsidized health insurance versus self-pay for nonelderly adults (ages 21–64) without health insurance. We discounted both costs and benefits, following recommendations of the Panel on Cost-Effectiveness in Health and Medicine.

Results: Our base case analyses suggest that plausible lower and upper bounds for a cost-effectiveness decision rule are $183,000 per life-year and $264,000 per life-year, respectively. Our sensitivity analyses widen the plausible range (between $95,000 per life-year saved and $264,000 per life-year saved when we considered only health care's impact on quantity of life, and between $109,000 per QALY saved and $297,000 per QALY saved when we considered health care's impact on quality as well as quantity of life) but it remained substantially higher than $50,000 per QALY.

Conclusions: It is very unlikely that $50,000 per QALY is consistent with societal preferences in the United States.

From the *Department of Medicine, Section of General Internal Medicine, Yale University School of Medicine, New Haven, Connecticut; †Department of Economics, Graduate School of Pubic Policy, University of Chicago, Chicago, Illinois; ‡Department of Neurosurgery, VA Connecticut Healthcare System, West Haven, Connecticut; §Department of Medicine, Section of Psychiatry, Yale University School of Medicine, New Haven, Connecticut; and ¶Department of Medicine, Section of Decision Sciences and Clinical Systems Modeling, University of Pittsburgh School of Medicine, Pittsburgh, Pennsylvania.

Reprints: Ronald Scott Braithwaite, MD, MSc, Section of General Internal Medicine, Department of Medicine, Yale University School of Medicine, New Haven, CT. E-mail: Ronald.braithwaite@va.gov.

© 2008 Lippincott Williams & Wilkins, Inc.