The initial concern when health economics first began as a part of the economics discipline – about 40 years ago – was ‘productive efficiency’, the extent to which the costs of any particular treatment could be reduced, thus focussing on the relative merits of different treatments of the same medical condition. However economists soon faced the necessity to compare the resource consequences of different medical conditions – ‘allocative efficiency’. The problem arises because ‘health’ is not a simply defined concept with a single index of performance – unlike material production which is measured by GDP – so comparisons between health outcomes are deeply problematic. (There is no policy problem here if health care is delivered entirely by the market mechanism of private payment, for the market implicitly resolves the difficulty by the sick’s payments on the basis of their perception and their ability to pay. But there is no country in the world where this applies.) Any comparison of the health status of two persons also involves deep philosophical issues, which practical economists may avoid, but which still lurk under their pragmatic solutions.
Initially, economists used as a measure of medical performance the avoidance of death and in some areas – road design for instance – that remains the measure today. But even here there is the problem of the resulting length of life – a treatment which extends life for a couple of decades has to be considered of greater merit than one which extends it for a couple of years. So economist’s attention shifted to the notion of ‘life years’ saved rather than ‘lives saved’, although they have been handicapped because often the average number of life years saved by a treatment has not been scientifically measured. (Moreover we cannot avoid comparing people. For instance surveys suggest that adding five years to the life of a eight year old is valued by the public more highly than adding five years to an eighty year old’s life.)
The logic takes us to considering the quality of life, since two treatments may lead to different sorts of lives – say whether one is in a wheelchair, or whether one remains fully ambulant. So in principle we need to compare the quality of life years – that is the number of years a person lives, adjusted by the quality of the life they live. This notion of QALYs may be simple enough but their measurement is complicated. Moreover there is a sense there is no objective people-independent scientific measurement of a quality life year. We have to ask people how to value them – it is a social valuation which is relevant, given society is going to provide the public funding.
As a final stage in this quick history of some key underlying concepts of health economics, note that much medical treatment today is not intended to save lives, but to improve the quality of life of the living. In such cases mortality measures are totally irrelevant and morbidity becomes paramount. For instance, multiple sclerosis does not, so I am told, shorten life expectation but – especially in its later stages – individuals are seriously handicapped, and the medical profession quite rightly tries to minimise their discomfort and to delay the onset of the later stages.
I have reflected on how economists were pushed from productive efficiency to allocative efficiency and thence from deaths prevented to quality life years improved, as a background to the issue of pain. In a very obvious sense pain reduces the quality of life, so the health economist is interested in the value of preventing or ameliorating that diminution. The practical implication is that if the absence of reduction of pain is valued highly, then there may be a case for public funding of effective treatments. That does not automatically follow, because the cost of treatment has to be taken into consideration. Nevertheless that society significantly values pain reduction is a necessary first step towards such a policy conclusion.
Recently economists have been trying to measure the incidence of pain in society, and the degree it is socially valued. A just published New Zealand study gives some indication of the incidence.
Percentages with Moderate Or Extreme Problems: (Self Assessed)
That these problems tend to rise with age will not surprise anyone. Perhaps more astonishing is the relative incidence. About a third of adults report they have moderate or severe pain and discomfort, although only about a twentieth of the group say they are in extreme pain. The survey suggests pain and discomfort is the most widely reported of all the problems. This is consistent with an overseas study which found that 30.2 percent of British and 30.7 percent of Dutch respondents to a survey said they suffered pain and discomfort, and these sufferers were the largest group compared to the other problem dimensions. Of course, ‘moderate’ and ‘extreme’ are self categorisations, but the survey suggests that perhaps 25,000 to 50,000 New Zealanders consider themselves in extreme pain.
This finding matters most if we value the absence of pain and discomfort significantly. New Zealand health economists have not yet done any scientific studies which enable us to judge that. However Alan Williams, the British economist who has pioneered the approach which this paper has been presenting, has recently sent me some estimates for the British population. I am anxious that we do not jump to conclusions, for the data requires some delicacy in its interpretation, not to mention there may be national differences – but the William’s data suggests that British public values the absence of pain more than absences in the other four problem areas, adjusting for comparability of levels. Interestingly there is a very substantial loading for extreme pain, an estimate not too different from (96 percent of) that for unconsciousness.
So what we know is that pain is a widespread problem in New Zealand – especially among the elderly, and that probably as a society we value its absence highly. It does not directly follow from that we should put a massive effort into treating, because that also depends upon the costs and effectiveness of the treatments. To quote a study I was involved in, multiple sclerosis is a distressing disease, the cost of some treatments relative to the effectiveness meant that the public health system has been very cautious at providing subsidised treatments. That says nothing about the compassion that the decision-makers have for the sufferers. Rather it reflects the nation’s willingness to fund adequately the health system. Insofar as the funding is insufficient then there will be effective treatments which will not be available from the public system, although those with sufficient funds will have access to them by private payment. Until we can say something about the cost of treatment relative to the reduction in pain, an economists is unable to make any recommendation about the degree to which treatment should be publicly funded. In any case the immediate issue may be improving the treatment rather than funding it.
But to finish on a personal note. Except in the area of hospice care, I knew little of the issue of pain ands its management and treatment when I was invited to speak to you. I still know little, but the little I have learned in preparing this paper tells me that we have real problem in our society, and we are probably giving it insufficient attention. The collective ‘we’ applies both to me as a citizen and to me as a health economist.
1. N. Devlin, P. Hansen & P. Herbison, ‘Variations in Self Reported Health Status: Results from a New Zealand Survey.’ New Zealand Medical Journal 8 December 2000.
2. The totals are not those of the original paper, which based on the sample. These figures are reweighted by the true population proportions.
3. P. Kind ‘The EuroQol Instrument: An Index of Health-related Quality of Life’ in B. Spiker Quality of life and PharmoEconomics in Clinical Trials, 2ed, Lippincott-Raven Publishers, Philadelphia 1996. The New Zealand proportions are higher – and in the case of ‘mobility’ substantially higher – than those reported in this studied.
4. Because of sampling coverage, the results may be biased towards over representation of those with health problems.
5. See B. H. Easton Desperate for Funds, Listener, November 6, 1999, for further details. The government has since adopted the policy conclusion of public provision of the treatment for a well group targeted of patients.