Project Description

The following is a summary of a research project by the authors. For more information please see the published full-text journal article:

Cathrine Mihalopoulos, Mary Lou Chatterton, Lidia Engel, Long Le, Yong Yi Lee (2020) 'Whither economic evaluation in the case of COVID-19: What can the field of mental health economics contribute within the Australian context?', Australian & New Zealand Journal of Psychiatry, DOI: 10.1177/0004867420963724

Authors: Professor Cathrine Mihalopoulos1, Dr Mary Lou Chatterton1, Dr Lidia Engel1, Dr Long Le1, Dr Yong Yi Lee1

  1. Deakin Health Economics, Institute for Health Transformation, Deakin University.

COVID-19 has resulted in broad impacts on the economy and aspects of daily life including our collective mental health and well-being. The Australian health care system already faces limitations in its ability to treat people with mental health conditions. Australia has responded to the COVID-19 outbreak by, among other initiatives, providing reimbursement for telehealth services. However, it is unclear if these measures will be enough to manage the psychological distress, depression, anxiety and post-traumatic distress shown to accompany infectious disease outbreaks and economic shocks.

A false dichotomy has emerged in both the policy and public discourse on the supposedly mutually exclusive choices between population health versus the economy; and even between different dimensions of health, such as mortality (risk of death) versus morbidity (e.g. quality of life impacts). Decision making has focused on the physical health ramifications of COVID-19, the avoidance of over-burdening the health care system and saving lives. It strikes us that under the current decision-making context, quality of life impacts are largely being ignored when evaluating the health impacts of alternative courses of action. We propose the use of an alternative framework for decision making that combines life years saved with impacts on quality of life into one metric – the Quality-adjusted life year (QALY).

Although QALYs are used as an outcome measure in formal health technology assessment for decision making in Australia, it has not currently been used as a tool to inform decisions during the pandemic. It has been shown that poor mental health inevitably leads to reductions in the quality of life weights used in the calculation of QALYs. Therefore, as a first step, this type of research could be used to model the QALY impacts – beyond just potential infection rates and associated health impacts – of the COVID-19 spread. These estimates could be built into the economic models evaluating different courses of action in terms of the societal cost impacts (both health sector and broader societal cost – such as reduced income) and the health impacts (both mortality and morbidity) by using outcomes such as QALYs. The mental health impacts of different policy decisions, which are having such a dramatic effect on our economy, livelihoods and social consequences (e.g. loneliness, impacts on schooling, etc.), can be considered within the same context as years of life lost due to varying levels of infection (without ignoring other sources of mortality such as suicide).

In conclusion, a framework that simultaneously includes mental health and broader economic impacts into a single decision-making process would facilitate transparent and accountable decision making that can improve the overall welfare of Australian society as we continue to address the considerable challenges that the COVID-19 pandemic is creating.