Cost‐Effectiveness Analysis of Risky Health Interventions: Moving Beyond Risk Neutrality

ABSTRACT Cost‐effectiveness analysis for health interventions is traditionally conducted in a risk‐neutral way, insensitive to risk attitudes in the population, which are potentially non‐neutral. While the standard outcome metric of quality‐adjusted life years (QALYs) aims to be deferential to people's valuations of health states, cost‐effectiveness analysis of risky interventions using the QALY metric is not similarly deferential to people's risk attitudes. I argue that there is no good justification for this practice. Non‐neutral attitudes to risk, especially where they concern individually life‐changing interventions need not be irrational, and so imposing neutrality is not justifiable as a way of debiasing preferences. Many common justifications for deference to health state preferences extend to risk attitudes. But even if reasons for deference do not extend, imposition of risk neutrality as opposed to any other rationally permissible risk attitude is under‐motivated as default practice. Thus, either methods for measuring risk attitudes separately and incorporating them into cost‐effectiveness analysis should be used more widely or a richer set of information should be presented to political decision‐makers and the public to enable them to decide how to take into account the individual risks faced by members of the population, on top of aggregate effects on population health.