Your life as a cost equation: How governments and insurance companies really decide what medical treatments you may have

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Op-ed views and opinions expressed are solely those of the author.

Did you know that for-profit health insurance companies, prescription plan managers, and the federal government use mathematical formulas to decide which life-saving health care technologies they are willing to pay for? This directly impacts which providers you can see, what medical technology you can have, and what medications you can receive as part of your health care benefits.

These formulas are officially, and somewhat tongue-in-cheek, called QALYs (quality adjusted life years). They were given this interesting acronym because they are supposed to represent how a technology or service can enhance your quality of life. But they have devolved over the decades to represent something far different.

The ivory towers of academia think they can put an artificial value on not only life but even use QALY to value the emotions, experiences and activities of our lives. It amounts to reducing humanity to numbers on a spreadsheet. The sole purpose of these cold, dispassionate cash calculations is to save money and ration treatments.

I call these QALY formulas a “geekified metric.” They were first developed back in the 1970s to determine whether a treatment was “cost effective” based on the value of how much it incrementally improves quality of life. Until recently, most clinicians and health care providers in the United States rejected or skeptically used these reductio ad absurdum approaches to coverage decisions, knowing they lead to discrimination and reduce life quality.

However, as for-profit health insurance companies and government-sector health providers squeeze healthcare nickels, more have begun to base their decisions about your health on QALY. They include true academic departments and a few quasi-academic private entities, such as the Institute for Clinical and Economic Review (ICER).

These self-appointed guardians make QALY calculations to assess the value of treatments for conditions such as diabetes, heart conditions, sickle cell disease, and most recently COVID-19. Then these experts, who have no public mandate, oversight or governance structures, publish them as so-called guidelines that insurance companies use to make decisions about what care you, your family, and our communities can get and under what circumstances and conditions.

This unaccountable black box process is also beginning to be broadly used by government in programs like Medicaid and the veterans health system, giving them de facto weight of a government policy.

In Canada, the United Kingdom, and France, QALY are the standard for restricting coverage. It’s analogous to you and your friends who feel they are sports experts getting together and deciding the values of particular athletes, publishing that, and having real team owners use it to decide how much to pay their players.

The QALY starts by attributing a value to the quality of a life lived with various conditions and diseases.  Some of the interesting ways these are assigned may, and should, shock you.

For example, QALY formulas will always value the life of a disabled person less than a life lived without a disability or chronic illness. Yes, read that again. Despite the basic tenets of equal access and the dignity of persons with disabilities or even the federal Americans With Disabilities Act, persons with disabilities are rated as having lower life quality points than others. And in this curious make-believe world, many who have a chronic condition are assigned to lower quality-life categories. Tell that to your 50-year-old African-American dad with diabetes.

Even more incredible is that this inherently discriminatory approach has not been legally challenged yet. Aren’t these just the people who need these technologies the most? Deferring decisions to QALY means treatments for people living with disabilities will always be seen as worth less than those delivered to people who can expect to get back to living at academia’s definition of an optimal life with optimal health.

Who might that be? Probably not the middle-aged mother of 3 who has developed multiple sclerosis. Not the military veteran with behavioral issues related to post traumatic stress developed during their service. Also not the paraplegic military officer who may be confined to a wheelchair because of her service. These people, by virtue of being people as acknowledged by our laws and traditions, have the same value as anyone else, except in the eyes of medical technology assessors and gatekeepers relying on QALY.

Back in the late 1970’s, as a young clinical pharmacist and junior faculty member at Columbia University College of Pharmacy, when these notions of developing formulas to value lives and treatments first hit their stride, I thought then – and wrote then – that it was incomprehensible. One cannot reduce the value or quality of a human life, let alone the value of a segment of society or a product being used by that segment, to a formula and a singular cold cash value. More than 50 years in healthcare and science have not changed my mind.

By reducing our lives to a formula, we give license to gatekeepers to decide that some folks are just not worth saving with advanced treatments. In other words,you, your neighbors, your friends and your family, are just not worth the money.

This is putting a computer brain in charge of decisions that require human hearts. Quality of a life cannot be boiled down to a simple logical unemotional calculus. But if it can at all be calculated (and I do not believe that it truly can) it must take in a myriad of personal factors. Models ultimately rely on the preconceived values, perceptions, judgements, and moral values of those who create them.

It defies the foundations of our independent and diverse nation to presume that any group of economists and scientists, no matter how many or what letters they have after their names, can decide what is important for anyone and everyone in a group of patients and people with varied backgrounds. The data used to develop these metrics and formulas often do not represent communities of color, and therefore are even more unreliable to value treatments that disproportionately impact them. Yet, policymakers and third-party payers are increasingly taking these mathematical models as gospel, and even using them as a shield from criticism, as they decide how valuable a patient’s life is when medical technology is most needed.

COVID-19 has uncovered so much of the disparity in our healthcare system. To get the quality care we pay for in premiums and taxes will require shifting away from valuing people and the treatments we have available to them based on ivory tower math, and toward a more personalized assessment of treatment value and the innate value of a person.

We shouldn’t let private sector insurers or federal programs like Medicare, Medicaid and the veterans health system rely on QALYs to determine what care you and those you care about are worth. The value of human life cannot be boiled down to an algorithm.


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Dr. Salvatore J. Giorgianni


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