Explicit Cost-Effectiveness Thresholds in Health Care: A Kaleidoscope

With the latter, we mean official, publicly available thresholds of what constitutes a cost-effective healthcare program (e.g., £30,000/QALY).

The first is that of communal sharing, which divides social life into two groups (members and non-members) that both have different rights and obligations (a binary dichotomy). A typical example is the distinction between family members and non-family members, friends and non-friends, between citizens and non-citizens. Membership means an equal right to the benefits of the group, non-membership leads to no entitlements. The second sphere is that of authority ranking, based on one’s status and location in a social hierarchy (a lexical ordinal ranking of people). A typical example is the superior status of a person like the president or the king, having more authority than others because of their higher place in the hierarchy. The third sphere is that of equality matching where we settle scores between equal partners (allowing to measure). This is the sphere of equals, colleagues or friends inviting one another over for dinner, for example. Within this sphere, a ‘tit-for-tat’ reciprocity between equals dominates (e.g., after a certain amount of time, we’re expected to return a dinner invitation). The fourth sphere is that of market pricing, where a single metric (like money, for instance) makes valuation and comparison of a large number of entities possible (allowing ratios and all kinds of calculations and weighing of costs and benefits) (Fiske & Tetlock, 1997).

An interesting illustration can be found in the ‘Danner Commission’ experiment (Shoemaker & Tetlock, 2012), in which participants were informed about a fictionalized public health program and its recommended reforms in the light of efficient use of public resources. If the reforms were followed, the program could save 200 lives, at a cost of $100 million. If the program continued at the previous year’s budget of $200 million, 400 lives could be saved. In the experiment, the Commission recommended not to continue and instead, to redirect the saving of $100 million to other important public uses. This is a clear example of a policy choice that requires explicit valuation of human life. The researchers investigated people’s response to different explanation strategies. For two groups, the Commission offered a smokescreen strategy that took either a utilitarian form (‘After weighing relevant costs and benefits, the Commission concludes that this is the right thing to do’) or moralistic form (‘Based on its analysis, the Commission concludes that morally this is the right thing to do’). For a third group, the decision grounds were presented transparently (‘The cost of saving the additional 200 lives (at $500,000 per life) is too high given other important priorities’). In the first two groups (where the trade-offs remained implicit), around 72% supported the recommendation. In the third group (with the explicit trade-off), approval went down to 35%.