Nancy Devlin presentation ISPOR Milan November 2015

1. Theoretical foundations and
challenges
Professor Nancy J Devlin
Director of Research
Office of Health Economics
ISPOR Milan 2015
WORKSHOP W18: UTILITIES IN HTA: CHALLENGES FOR
THEORY AND PRACTICE NOW AND IN THE FUTURE

2. Three things that determine QoL
utilities used in HTA
1. What method do we use to elicit data?
• SG, TTO, VAS, DCE, other…?
2. Who do we ask?
• The general public, patients, someone else?
3. How do we model the data to use individuals’ data
to represent the ‘average’ preferences for a
‘society’?
• What measure of ‘average’: mean, median, mode?
• Wide variety of econometric modelling approaches
can be used to model preferences data

3. Fundamental problem no.1:
Each of these researcher choices has a non-trivial
impact on QoL utilities – and cannot be
determined with recourse to statistical properties
alone.
Or in other words: theory matters (a lot)
How do we choose?
Who chooses – HTA bodies? Academics?

4. • All current methods for valuing HRQoL rely on stated
preferences – there is no corresponding market in which
to reveal preferences, to validate results or help to
choose between methods.
• How do we as researchers choose our approaches, given the
importance of this to HTA and patients’ access to medicines?
(a) Do the results look like we expected?
• Tautological: what results we think are OK, depends on what
results we saw before, which are a product of previous
methodological choices
(b) What theories do we ‘believe’/subscribe to?
• Entirely normative.
• Might be derivable from the client (real or imagined)
Fundamental problem no.2:

5. What theoretical foundations are
relevant?
choice Theoretical foundations
What are we
measuring?
Utility/welfare?
Health? Health Related QoL?
Which method? No single theory.
Theoretical foundations of each method is different.
• SG: utility under uncertainty
• TTO: empirical proxy for SG, but can be given its own
theoretical foundation in Hick’s utility theory
• VAS: psychometric theory; Parducci.
• DCE: random utility theory
Choosing between methods = choosing between theories.
Whose
preferences?
Welfarism: utility of those affected by the state of the world (but
not via QALYs or measures of HRQoL!)
Extra-welfarism: by convention, the general public - but
alternative interpretations possible.
How to model? Values sets are sensitive to choices about how to model the
data. We need to be much more transparent about that.
The normative basis for these choices is often weak.

6. Extra welfarism
• If we assume extra welfarism to be the relevant
theoretical foundation for HTA – what guidance
does this provide on these issues?
• Important to note that extra-welfarism is much
less prescriptive (eg about the sources of QoL
weights) than the current orthodoxy that has
emerged in the practice of HTA (Morris, Devlin,
Parkin 2007)

7. ‘The extra welfarist approach differs from the welfarist in
four general ways: (1) it permits the use of outcomes other
than utility (2) it permits the use of sources of valuation
other than the affected individuals (3) It permits the
weighting of outcomes (whether utility or other) according
to principles that need not be preference based (4) It
permits interpersonal comparisons of wellbeing in a variety
of dimensions, thus enabling movements beyond Paretian
economics. (Culyer 2012 p. 72).
• Note: ‘permits’ ≠ ‘requires’.
Key quote no. 1: what method?

8. Isn’t it ironic?
• Extra welfarism arises from a rejection of utilities (a
la welfarism) as an acceptable sole basis for
making public choices (vis a vis Sen)
• Yet in measuring/valuing HRQoL for HTA, our
current approaches are deeply influenced by our
(i.e. economists’) attachment to utility theory

9. Key quote no.2: Whose values?
In extra welfarism:
“…any number of stakeholders might be regarded as the
appropriate source of different values” (Culyer 2012).
And these sources of values might appropriately come from:
“…an authority (decision makers, wise women, the general public,
an elected or appointed committee, a citizen’s jury, or some other
organ)” (Culyer 2012)
• Who’s the client (real or imagined)? That’s the big question.

10. Key quote no.3: how to model?
“The choice of summary statistics is not merely a technical
matter, but invokes ethical issues which need to be resolved”
(Nicholls 1989, cited by us:)
“Which approach to aggregation of individual preferences is
chosen can have an important effect on conclusions about
what ‘society’s’ preferences are – with implications for
decision making and the allocation of public funds.
Ultimately, what approach to calculating the average should
be used is a normative question: it cannot be answered
with recourse to empirical evidence alone.
(Devlin and Buckingham, 2015).

11. Key quote no.4: who should be
making these choices?
“…economists may be able to derive values from
experimental groups or samples of the relevant
population through modern methods for eliciting
preferences…the choice about which groups to
sample are not normally for the analyst to make but
for the ultimate decision maker, advised by the
analyst’ (Culyer 2012 p. 77).

12. Concluding remarks
• Choices about what utilities to use in HTA are strongly
influenced by the choices made by researchers.
• Choice about what utilities to use ‘should’ be driven by well-
informed HTA bodies, reflecting the socio-political, economic
and health care system context within which they operate.
• Implications:
• Researchers should commit to being transparent in
reporting of HRQoL utilities, and report a wide range of
sensitivity analyses e.g. relating to different modelling
approaches; confidence intervals.
• HTA should check the sensitivity of cost effectiveness to
different utilities, rather than relying on single point-
estimates from value sets.

13. References
Buckingham K, Devlin N. (2006) A theoretical framework for TTO
valuations of health. Health Economics 5(10) 15 (10) 1149-54.
Buckingham, K., Devlin, N. (2009) An exploration of the marginal
utility of time in health. Social Science and Medicine 68: 362-367.
Culyer A.(2012) Extra welfarism. Chapter 2 in: The humble
economist. Cookson R, Claxton K (eds). London: OHE.
Devlin N, Buckingham K. (2013) What is the normative basis for
selecting the measure of ‘average’ preferences to use in social
choices? OHE Research Paper (forthcoming).
Morris S, Devlin N, Parkin D. (2012) Economic analysis in health care.
Wiley (2nd ed).
Parkin D., Devlin N. (2006) Is there a case for using visual analogue
scale valuations in Cost utility Analysis? Health Economics 15:653-
664.

14. Disclaimer:
Views expressed in this presentation are my own, and not
necessarily those of the EuroQol Group, or any other organisation
with which I work.