What Does the Value of Modern Medicine Say About the $50,000 per Quality-Adjusted Life-Year Decision Rule?

Abstract

Background: In the United States, $50,000 per Quality-Adjusted Life-Year (QALY) is a decision rule that is often used to guide interpretation of cost-effectiveness analyses. However, many investigators have questioned the scientific basis of this rule, and it has not been updated. Methods: We used 2 separate approaches to investigate whether the $50,000 per QALY rule is consistent with current resource allocation decisions. To infer a lower bound for the decision rule, we estimated the incremental cost-effectiveness of recent (2003) versus pre-“modern era” (1950) medical care in the United States. To infer an upper bound for the decision rule, we estimated the incremental cost-effectiveness of unsubsidized health insurance versus self-pay for nonelderly adults (ages 21–64) without health insurance. We discounted both costs and benefits, following recommendations of the Panel on Cost-Effectiveness in Health and Medicine. Results: Our base case analyses suggest that plausible lower and upper bounds for a cost-effectiveness decision rule are $183,000 per life-year and $264,000 per life-year, respectively. Our sensitivity analyses widen the plausible range (between $95,000 per life-year saved and $264,000 per life-year saved when we considered only health care's impact on quantity of life, and between $109,000 per QALY saved and $297,000 per QALY saved when we considered health care's impact on quality as well as quantity of life) but it remained substantially higher than $50,000 per QALY. Conclusions: It is very unlikely that $50,000 per QALY is consistent with societal preferences in the United States.