Severity as an independent determinant of the social value of a health service

The measure of benefit in cost utility analysis (CUA) is the increase in utility which is attributable to a health service. This paper reviews the evidence that the severity of an illness – the health state before receipt of the health service – may be independently important for social (as distinct from individual) preferences for different services. An earlier 1997 Australian study is summarised. Data from a 2004 survey are used to quantify the apparent importance of severity. Person trade off (PTO) scores are used to measure social preferences and time trade off (TTO) scores to measure individual preferences. Econometric results suggest the severity may more than double the index of social value of a health service.