Construction of the descriptive system for the Assessment of Quality of Life AQoL-6D utility instrument.

BACKGROUND: Multi attribute utility (MAU) instruments are used to include the health related quality of life (HRQoL) in economic evaluations of health programs. Comparative studies suggest different MAU instruments measure related but different constructs. The objective of this paper is to describe the methods employed to achieve content validity in the descriptive system of the Assessment of Quality of Life (AQoL)-6D, MAU instrument. METHODS: The AQoL program introduced the use of psychometric methods in the construction of health related MAU instruments. To develop the AQoL-6D we selected 112 items from previous research, focus groups and expert judgment and administered them to 316 members of the public and 302 hospital patients. The search for content validity across a broad spectrum of health states required both formative and reflective modelling. We employed Exploratory Factor Analysis and Structural Equation Modelling (SEM) to meet these dual requirements. RESULTS AND DISCUSSION: The resulting instrument employs 20 items in a multi-tier descriptive system. Latent dimension variables achieve sensitive descriptions of 6 dimensions which, in turn, combine to form a single latent QoL variable. Diagnostic statistics from the SEM analysis are exceptionally good and confirm the hypothesised structure of the model. CONCLUSIONS: The AQoL-6D descriptive system has good psychometric properties. They imply that the instrument has achieved construct validity and provides a sensitive description of HRQoL. This means that it may be used with confidence for measuring health related quality of life and that it is a suitable basis for modelling utilities for inclusion in the economic evaluation of health programs.

Supplier-induced demand: re-examining identification and misspecification in cross-sectional analysis.

This paper re-examines criticisms of cross-sectional methods used to test for supplier-induced demand (SID) and re-evaluates the empirical evidence using data from Australian medical services. Cross-sectional studies of SID have been criticised on two grounds. First, and most important, the inclusion of the doctor supply in the demand equation leads to an identification problem. This criticism is shown to be invalid, as the doctor supply variable is stochastic and depends upon a variety of other variables including the desirability of the location. Second, cross-sectional studies of SID fail diagnostic tests and produce artefactual findings due to model misspecification. Contrary to this, the re-evaluation of cross-sectional Australian data indicate that demand equations that do not include the doctor supply are misspecified. Empirical evidence from the re-evaluation of Australian medical services data supports the notion of SID. Demand and supply equations are well specified and have very good explanatory power. The demand equation is identified and the desirability of a location is an important predictor of the doctor supply. Results show an average price elasticity of demand of 0.22 and an average elasticity of demand with respect to the doctor supply of 0.46, with the impact of SID becoming stronger as the doctor supply rises. The conclusion we draw from this paper is that two of the main criticisms of the empirical evidence supporting the SID hypothesis have been inappropriately levelled at the methods used. More importantly, SID provides a satisfactory, and robust, explanation of the empirical data on the demand for medical services in Australia.

Supplier-induced demand: reconsidering the theories and new Australian evidence.

This paper reconsiders the evidence and several of the key arguments associated with the theory of supplier-induced demand (SID). It proposes a new theory to explain how ethical behaviour is consistent with SID. The purpose of a theory of demand and one criterion for the evaluation of a theory is the provision of a plausible explanation for the observed variability in service use. We argue that Australian data are not easily explained by orthodox possible explanation. We also argue that, having revisited the theory of SID, the agency relationship between doctors and patients arises not simply because of asymmetrical information but from an asymmetrical ability and willingness to exercise judgement in the face of uncertainty. It is also argued that the incomplete demand shift that must occur following an increase in the doctor supply is readily explained by the dynamics of market adjustment when market information is incomplete and there is non-collusive professional (and ethical) behaviour by doctors. Empirical evidence of SID from six Australian data sets is presented and discussed. It is argued that these are more easily explained by SID than by conventional demand side variables. We conclude that once the uncertainty of medical decision making and the complexity of medical judgements are taken into account, SID is a more plausible theory of patient and doctor behaviour than the orthodox model of demand and supply. More importantly, SID provides a satisfactory explanation of the observed pattern and change in the demand for Australian medical services, which are not easily explained in the absence of SID.

In defence of societal sovereignty: a comment on Nyman 'the inclusion of survivor consumption in CUA'.

Whether to include or exclude consumption costs and costs of unrelated illnesses in economic evaluation is not a technical issue which may be answered by reference to individuals alone and the consistency of the treatment of individual costs and benefits. In the context of a publicly funded health service the relevant costs and benefits may differ from those normally included in evaluation studies. Specifically, the social welfare function is likely to exclude benefits which would result in preferential care for wealthier members of society. But this conclusion must be established by analysis of social, not individual, values.