Purpose: Life-effectiveness analysis is a technique that uses the relationship between family income and mortality to develop a cost-benefit procedure that trades off clinical life years saved and societal life years lost. The purpose of this study was was to compare the cost per life year for two societal cost models: one where the medical costs are born equally between society members, and one where the societal cost is proportional to income.
Method: Data on mortality as a function of family income were obtained from the U.S. National Longitudinal Study, conducted by the National Institutes of Health. Age distributions came from census data, and family icome distributions were obtained from federal government data. NEVADA Simulation was used to calculate the number of societal life years lost a healthcare expenditure distributed among the population. The LIFESPANS algorithm was used to generate life expectancy and survival distributions.
Result: This study found that, in 2009 dollars, that the societal cost of healthcare expenditures were dependent on the cost distribution of that expense. If the costs were born equally among the population, each $120k would result in a statistical reduction of one quality adjusted life year. The the costs were directly proportional to the family income, it would take $223k to reduce the societal lifespan by one quality adjusted life year.
Conclusion: The life-effectiveness technique can be used to justify a maximum a rational society would be willing to pay to increase the societal lifespan by one quality adjusted life year. It can also show that differences in the cost structure of health care can effect how much a rational society should be willing to pay. These changes could lead to additional therapies being adopted.
Candidate for the Lee B. Lusted Student Prize Competition