Economic Evaluation in Healthcare 101: Measuring Health Outcomes

NOTE: This article is the fourth in a series of 10 articles and is part of our Economic Evaluation in Healthcare 101 course. You can find a course overview and links to all 10 course modules here:

Measuring Health Outcomes

In healthcare research and economic evaluation, the ability to accurately measure health outcomes is essential for assessing the effectiveness, value, and impact of interventions. These outcomes are used in clinical trials, health technology assessments (HTAs), and policy decisions. Health outcomes can be evaluated across multiple domains—from clinical endpoints like survival and disease progression to broader measures such as quality of life and patient preferences. This essay explores four key dimensions of health outcome measurement: clinical outcomes, health-related quality of life (HRQoL), summary measures like QALYs and DALYs, and preference-based instruments such as EQ-5D and SF-6D.

1. Clinical Outcomes: Mortality and Morbidity

Clinical outcomes are the most traditional and objective measures of health, referring to biomedical or physiological endpoints that result from healthcare interventions. These include:

Mortality: Measured as overall survival or disease-specific survival, often expressed as life-years gained or survival rates over a defined time horizon.
Morbidity: Refers to the presence and severity of illness, complications, or disease recurrence. Examples include hospitalization rates, infection rates, symptom scales, and biomarker changes (e.g., HbA1c levels in diabetes).

Clinical outcomes are essential in clinical trials and regulatory approval, where demonstrating efficacy and safety is paramount. However, they may not capture the patient’s subjective experience or broader societal impact, which is why complementary outcome measures are often needed in economic evaluations.

Reference: Guyatt GH, Feeny DH, Patrick DL. (1993). Measuring health-related quality of life. Annals of Internal Medicine, 118(8), 622–629.

2. Health-Related Quality of Life (HRQoL)

Health-Related Quality of Life (HRQoL) refers to a person’s perceived physical, mental, emotional, and social well-being, particularly in the context of a disease or its treatment. It represents the subjective impact of health status on daily life.

HRQoL is typically measured using validated questionnaires, which may be:

Generic (e.g., SF-36, EQ-5D): applicable across diseases and populations
Disease-specific (e.g., EORTC QLQ-C30 for cancer, Asthma Quality of Life Questionnaire)

These tools assess multiple domains such as physical functioning, emotional well-being, pain, vitality, and social functioning. HRQoL data provide insights into the burden of disease beyond clinical outcomes and are crucial for evaluating chronic conditions, where survival may not be the only relevant outcome.

HRQoL data are also a foundational component of QALY calculations, which combine quality and quantity of life into a single measure for cost-utility analysis.

Reference: Brazier J, Ratcliffe J, Salomon JA, Tsuchiya A. (2017). Measuring and Valuing Health Benefits for Economic Evaluation, 2nd ed.

3. QALYs and DALYs: Calculation and Interpretation

Quality-Adjusted Life Years (QALYs) and Disability-Adjusted Life Years (DALYs) are summary measures that enable comparisons of health interventions across diseases, populations, and healthcare systems.

QALYs

QALYs integrate life expectancy with health-related quality of life, providing a single metric that reflects both survival and well-being.

Calculation:

A perfectly healthy year is assigned a value of 1.0. A year with moderate illness (e.g., arthritis) might be valued at 0.7, and a year with severe disability might be valued at 0.3. These “utility values” are often derived from validated instruments like the EQ-5D or SF-6D.

Using the formula, a treatment that delivers 3 additional years at a utility score of 0.8 yields 2.4 QALYs.

QALYs are central to cost-utility analysis, enabling healthcare payers (e.g., UnitedHealthcare, NICE in the UK) to make value-based coverage and/or government funding decisions.

DALYs

DALYs, commonly used in global health and burden of disease studies, measure the gap between current health and ideal health by summing:

Years of Life Lost (YLL) due to premature death; they are based on the difference between actual age at death and the standard life expectancy
Years Lost due to Disability (YLD) from illness or injury; they are calculated by multiplying disease duration by a disability weight (ranging from 0 for perfect health to 1 for complete disability)

Unlike QALYs, DALYs focus on health loss rather than health gain, and they are typically used to prioritize public health interventions and track disease burden globally (e.g., WHO, Global Burden of Disease studies).

For example, if a person dies 10 years earlier than expected due to cancer (YLL = 10) and lived with severe disability for 5 years (disability weight = 0.6, so YLD = 5 × 0.6 = 3), the total DALYs lost would be:

While QALYs measure health gains, DALYs measure health losses. Governments and global organizations like the World Health Organization (WHO) use DALYs to assess the burden of disease and prioritize health interventions.

References:

Murray CJL, Lopez AD. (1996). The global burden of disease: a comprehensive assessment. Harvard School of Public Health.
Weinstein MC, Torrance G, McGuire A. (2009). QALYs: The basics. Value in Health, 12(Suppl 1), S5–S9.

4. Preference-Based Measures: EQ-5D, SF-6D, and HUI

Preference-based measures convert HRQoL data into utility values suitable for QALY calculations. These values reflect societal or individual preferences for different health states, obtained via methods like time trade-off (TTO), standard gamble (SG), or visual analog scales (VAS).

Key instruments include:

EQ-5D (EuroQol-5 Dimensions): One of the most widely used tools globally. It assesses five domains (mobility, self-care, usual activities, pain/discomfort, anxiety/depression) with 3 or 5 levels of severity. Utility scores are derived from population-based value sets.
SF-6D: Derived from the SF-36 or SF-12 survey, it covers six domains including physical functioning, role limitations, social functioning, and mental health. Suitable for use when SF-36 data are already available.
Health Utilities Index (HUI): Includes multiple dimensions (vision, hearing, speech, ambulation, emotion, etc.) and is used extensively in pediatric and chronic illness populations.

These instruments allow analysts to generate QALYs, compare interventions across diseases, and support cost-utility analysis.

Reference:

Devlin NJ, Brooks R. (2017). EQ-5D and the EuroQol Group: Past, present and future. Applied Health Economics and Health Policy, 15(2), 127–137.

Conclusion

Accurately measuring health outcomes is vital to ensuring that healthcare systems make informed, equitable, and efficient decisions. While clinical outcomes provide objective markers of efficacy, broader measures such as HRQoL, QALYs, and preference-based utilities offer insights into how individuals experience health and illness. These multidimensional approaches allow analysts and policymakers to go beyond survival and understand the full impact of disease and treatment on people’s lives.

References

Guyatt GH, Feeny DH, Patrick DL. (1993). Measuring health-related quality of life. Annals of Internal Medicine, 118(8), 622–629.
Brazier J, Ratcliffe J, Salomon JA, Tsuchiya A. (2017). Measuring and Valuing Health Benefits for Economic Evaluation, 2nd ed. Oxford University Press.
Weinstein MC, Torrance G, McGuire A. (2009). QALYs: The basics. Value in Health, 12(Suppl 1), S5–S9.
Murray CJL, Lopez AD. (1996). The Global Burden of Disease. Harvard School of Public Health.
Devlin NJ, Brooks R. (2017). EQ-5D and the EuroQol Group: Past, present and future. Applied Health Economics and Health Policy, 15(2), 127–137.