COST-UTILITY ANALYSIS FROM A SOCIETAL PERSPECTIVE

In this paper, we outline how to use cost-utility analysis from a soci etal perspective and the arguments that could be made For using such a model for economic evaluation of health care. We show that to include all the costs in the analysis, a price per quality-adjusted life year s (QALY) gained rather than a given budget should be used as the decis ion rule. Using cost-utility analysis this way is based on a willingne ss to pay per QALY gained that is constant and the same for everyone. To use a fixed price per QALY gained is consistent with societal utili ty maximization if aggregated QALYs are a measure of societal utility and if the mix of financing sources is the same for all health care pr ogrammes. If, furthermore, the price per QALY gained is set at the opt imal level, cost-utility analysis will lead to a maximization of socie tal utility. To get more information on the willingness to pay per QAL Y gained so as to provide cost-utility analysis with a useful decision rule should be a research priority. (C) 1997 Elsevier Science Ireland Ltd.