Measuring Health: DALYs and Cost-Effectiveness

How economists measure the burden of disease with DALYs and compare health interventions by cost-effectiveness to decide how to spend limited budgets.

Health budgets are limited, and there are always more worthwhile programmes than money to fund them. Economists use tools to compare different health interventions and prioritise spending.

DALYs

The disability-adjusted life year, or DALY, measures the burden of disease. One DALY represents one lost year of healthy life. It combines:

Years of life lost due to early death.
Years lived with disability, weighted by severity.

The Global Burden of Disease study, led by the Institute for Health Metrics and Evaluation, uses DALYs to compare diseases and risk factors across countries.

QALYs

A related measure, the quality-adjusted life year, or QALY, counts years of life adjusted for quality. A year in perfect health equals one QALY; a year in poorer health counts as less. Countries like the United Kingdom use QALYs to decide which treatments public health systems fund. The UK’s National Institute for Health and Care Excellence, NICE, generally considers treatments costing up to a threshold per QALY gained as cost-effective.

Cost-effectiveness

Cost-effectiveness analysis compares interventions by their cost per DALY averted or per QALY gained. This allows very different programmes to be compared: for example, vaccines versus surgery versus health education.

Research programmes such as the Disease Control Priorities project have found that costs per DALY averted vary by factors of hundreds or more between interventions. Choosing more cost-effective options can save far more lives with the same budget.

India

India established Health Technology Assessment in India, known as HTAIn, in 2017 to evaluate the cost-effectiveness of health interventions and inform decisions, such as which treatments to include in Ayushman Bharat packages.

Ethical debates

Critics raise concerns that DALYs and QALYs may undervalue the lives of disabled or older people, since years lived with disability or at older ages can count less. Disability rights advocates have challenged such measures. Health economists try to address these concerns, and many use the measures alongside other ethical considerations.

Two ways to spend a budget

A health ministry has 10 crore rupees. Option A, a vaccine programme, averts 10,000 DALYs. Option B, a specialised surgery programme, averts 500 DALYs. Cost-effectiveness analysis shows Option A delivers far more health for the money. This does not make Option B worthless, but it helps decide priorities when funds are scarce.

Thinking cost-effectiveness is heartless

Budgets are always limited. Cost-effectiveness analysis helps make sure money saves as many lives and prevents as much suffering as possible, though it must be combined with fairness and rights.

Key takeaways

A DALY measures one lost year of healthy life; a QALY counts years adjusted for quality.
Cost-effectiveness analysis compares interventions by cost per DALY averted or QALY gained.
Costs per DALY averted vary enormously between interventions.
India set up HTAIn in 2017; critics warn the measures may undervalue disabled and older people.