A Test of the Predictive Validity of Non-Linear Qaly Models Using Time Trade-Off Utilities

Abstract

This paper presents a test of the predictive validity of various classes of QALY models (i.e., linear, power and exponential models). We first estimated TTO utilities for 43 EQ-5D chronic health states and next these states were embedded in health profiles. The chronic TTO utilities were then used to predict the responses to TTO questions with health profiles. We find that the power QALY model clearly outperforms linear and exponential QALY models. Optimal power coefficient is 0.65. Our results suggest that TTO-based QALY calculations may be biased. This bias can be avoided using a power QALY model.

Keywords: Cost-utility analysis, QALYs, power QALY model, predictive validity, time tradeoff

JEL Classification: I10, D99