There is a growing debate on whether and how society should consider the costs and consequences we are willing to bear to save lives during the COVID-19 pandemic. The Vice-Chancellor of the University of Melbourne encourages us to consider the bigger picture and to employ tools to inform the process, such as the Quality Adjusted Life Year (QALY). Tony Abbott recommended that governments should think like health economists rather than trauma doctors when responding to COVID.

Is there a reasonable trade-off between the lives of young people and risks to old people?Credit:Louie Douvis

In response, ethicists have disputed whether we can or should place a value on human life, and some economists have aggressively reminded us not to overstretch the use of QALYs to judge “utility” between individuals. As health economists and epidemiologists who use QALYs, we explain what this approach can – and cannot – do to inform tough policy debates and decisions on COVID-19.

The QALY is an index used by health economists to measure the impacts on health of medical treatments or health policies in what we call cost-utility analysis. It has two components – the average number of life years gained ("LY") by averting death; and the improvement of quality of life experienced ("QA").

One QALY represents a full extra year of life lived in perfect health; an extra year of life lived in less than perfect health gives some fraction of one QALY. Thus a life-saving treatment vaccine or treatment for an early childhood disease might give a recipient 70 QALYs, by allowing them to survive to old age in good health.

At the other extreme, a new oncology drug might extend a cancer patient's survival by only a few weeks, but help them enjoy a much higher quality of life for that time – maybe a gain of 0.2 QALYs, for example. QALYs are not a moral judgment on the value of these people's lives or their health – just a device for quantifying how much their health has improved.

There is nothing new about using QALYs in the Australian health care system. For years, every new drug that has sought Medicare reimbursement has needed to submit an economic evaluation to the Pharmaceutical Benefits Advisory Committee. If it costs more than $50,000 to $70,000 per QALY, its chances of being listed start to fall. But a PBS drug listing is rather different from the complexity and breadth of decision-making on COVID-19.

At its core, the debate in Victoria and worldwide is about whether COVID-19 restrictions are proportionate, given the risks and consequences of virus transmission. No one is in doubt that the restrictions are working; the concern is that what is imposed is excessive, and a more nuanced approach might have achieved the same outcome, with less collateral impact on physical and mental health, social connectedness and the economy.

The "costs" that many commentators are referring to are the very broad economic and social costs caused by COVID-19 and the policy responses to it – the economic costs of business failures, unemployment and lost livelihoods, education disruption and myriad social and health costs of isolation, interrupted schooling, stress, family violence, etc. QALYs can only be used validly to investigate health impacts and costs, and there is enormous value in measuring the relative health impacts of preventing COVID cases through lockdowns versus harms from delayed elective surgery, say.

As more evidence on the economic impacts of COVID accumulates, it is increasingly clear that there is not a simple, linear relationship between the severity of lockdowns and the economic damage suffered. Global consulting firm McKinsey and others conclude that economic damage from COVID-19 is driven by poor control policies. Countries with rapid and effective controls (including lockdowns) minimised both deaths and economic losses, while countries with comprehensively botched control strategies maximised deaths and economic damage. For now, Australia remains in the first of these groups, at least on aggregate.

Under conditions of high uncertainty, cost-utility and cost-benefit analyses will yield unreliable results. We normally use QALYs alongside data from randomised controlled trials or analytic studies, allowing us to estimate probabilities and risks with some confidence.

Yet nine months into the pandemic, significant uncertainty still pervades our responses to COVID-19. Having a precise cost per QALY threshold will not help us if every other variable in the equation is imprecise or unknown. Our efforts now need to focus on gathering evidence on paths already taken to inform our road ahead, and to support informed debates about options and tolerances. Arguably, one virtue of the QALY is that estimating them disciplines our thinking and forces us to gather good data.

We urgently need dispassionate and imaginative analysis of the full global experience of pandemic control measures to understand what each component of a control strategy really contributes, and the full consequences of action or inaction. Only with this evidence can we tailor optimal infection control policies beyond the blunt instrument of lockdowns.

And we do need to have a genuine debate – especially as Victorians – on what we have learned during lockdown, what we value, and what we want our policy makers to consider as we all prepare for the next phase of this endurance race. Health economists should help support this debate, but not dictate its terms. We do not need to attach a dollar value to everything to be able to develop wise policy, but we do need a comprehensive understanding of investment and impact for informed and meaningful conversations.

Cathy Mihalopoulos is Director and Associate Professor, Martin Hensher is Deputy Director of Deakin Health Economics and Professor Catherine Bennett is Chair in Epidemiology at Deakin University's School of Health and Social Development.

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