chapter  2
34 Pages

Using Influence Diagrams in Cost-Effectiveness Analysis for Medical Decisions................................................... ram s. duriseti

All normative decision making requires a value metric. In medical decision problems, maximizing health state is a crucial metric. We assume that we can attach a measure to the quality of an individual’s health state. In the same way that people are assumed to have preference probabilities over different outcomes in classical normative decision making, we assume that defined health states exist and that patients can quantify preferences for these health states relative to a state of perfect health. When we normalize this health state’s presence for one year, we refer to it as a quality-adjusted life year (QALY). A QALY therefore represents the relative value of living

for one year in the current state of health. The QALY value of living for one year in a perfect state of health is 1.0 and 0 for death. This paradigm has gained wide acceptance.1