The monetary value of a reduction in mortality risk is often quantified using one of three concepts: the “value per statistical life” (VSL),“value per statistical life year” (VSLY), or “value per quality-adjusted life year” (VQALY). In benefit-cost analysis, any of the three metrics may be used, although official guidance on which measure is preferred varies across countries. In cost-effectiveness analysis, whether a health intervention is cost-effective may be judged by comparison with a reference VQALY.
Choosing one concept over another affects the relative value of decreasing risk to people of different ages. For example, the calculated value of decreasing current mortality risk by a specified amount is the same for all individuals using a common VSL but is larger for younger than for older individuals using a common VSLY or VQALY (because remaining life expectancy and health typically decrease with age).
In a recent paper, CHDS faculty James Hammitt describes how the value of any risk reduction (whether temporary or persistent) can be accurately characterized using any of the three concepts. The key is that the value depends on the time path of the risk reduction and on the characteristics of the affected individual, including his or her age, future mortality risk, health, and income. At most one of the values can be independent of age; it is likely that none are.
Although the value of a risk reduction can be accurately characterized using any of the three concepts (if the values depend on age) the differences calculated using alternative concepts that are independent of age can be small or as large as a factor of ten for realistic interventions. More attention to this issue could have important consequences for determining whether an intervention is cost-beneficial or cost-effective.
Learn more: Read the publication, Consistent Valuation of a Reduction in Mortality Risk Using Values per Life, Life Year, and Quality-Adjusted Life Year
Learn more: Resource Pack: Valuing Health and Longevity
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