More evidence that there are diminishing marginal returns to quality of life gains – Healthcare Economist





The years of life adjusted by quality (Qalys) are commonly used to evaluate the impact of new medical technologies on the mortality and morbidity of the patient. However, the use of qalys

Many authors have discussed the fact that standard assumptions result in utility functions that are unreally linear and separable, overlooking the decreasing marginal utility, a fundamental property of usefulness functions in economics.

A role of Johnson et al. (2024) Perform a discreet option experiment (DCE) to quantify patient preferences on treatments for major depressive disorder (MDD) to evaluate the decrease in marginal utility and dependence on the route. In the study, they offered the respondents different sequences of symptoms of severe, moderate and mild depression and estimated a willingness to pay for each one. A deductive analysis of latent class mixed lodges was used to evaluate the 751 survey data surveyed with MDD.

Using this approach, they found that:

According to the theoretical expectations, we find evidence of decreasing marginal utility,
keeping the sequence time constant, as well as evidence of dependence on the route, maintaining constantly the improvement of symptoms. Our experiment isolated the effects of dependence on the route of the influence of the conventional time discount when focusing on treatment durations of 6 weeks

https://link.springer.com/article/10.1007/s40273-024-01437-0

The authors argue that the short term they present (6 weeks) means that the discount is not a problem. If people did not completely appreciate the time when the weeks were weeks, in case, they only considered generic periods of time, then the discount could have played a role here. However, assuming that respondents properly understand the nature of the question, discount rates would have a very small impact for 6 weeks and findings can be attributed to non -linear public services. This can be particularly relevant to treatments with rapid action mechanisms. You can read the complete paper here.



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