Concept Architecture
Concept
Theoretically, Direct Utility Assessment is a method for measuring the utility of health states by obtaining preference values directly from individuals rather than deriving them from a preference-based descriptive instrument. It is grounded in utility theory and decision analysis, with the objective of quantifying the strength of preferences for health outcomes. Direct utility assessment exists to produce cardinal utility values that can be used in economic evaluation, particularly cost-utility analysis and the estimation of quality-adjusted life years (QALYs).
Mathematically, Direct Utility Assessment is represented by the formal mathematical framework of the elicitation method employed. Utilities are typically obtained using Standard Gamble, Time Trade-Off or Visual Analogue Scale techniques, each of which converts respondent preferences into numerical utility values. Standard Gamble is based on expected utility theory, whilst Time Trade-Off is based on preferences over time spent in different health states. The resulting utility values are generally anchored at 0 for death and 1 for full health, although negative values may be assigned to health states considered worse than death.
In practice, Direct Utility Assessment is conducted using structured interviews, questionnaires or computer-assisted surveys administered to patients, the general public or clinical experts. Utility values are analysed using descriptive and inferential statistical methods and incorporated into cost-utility analyses, decision-analytic models and health technology assessments when directly measured preference values are required.
Purpose
Used to measure health state utility values directly from respondents, estimate QALYs, support cost-utility analysis, inform decision-analytic models and provide preference weights for health technology assessment.
Mathematical Formulae
Primary Formula
There is no universally recognised canonical mathematical formula.
Supporting Formulae
Standard Gamble
U(H) = p
where:
- U(H) = utility of health state H
- p = probability of full health at the point of indifference
Time Trade-Off
U(H) = t / T
where:
- t = time in full health considered equivalent
- T = time in the impaired health state
Related Mathematical Methods
- Standard Gamble
- Time Trade-Off
- Visual Analogue Scale
- Utility theory
- Expected utility theory
- Preference elicitation
Example
A respondent considers living 15 years with moderate heart failure equivalent to living 12 years in full health.
Using the Time Trade-Off method:
U = 12 / 15 = 0.80
The directly assessed utility of the health state is 0.80. If the patient remains in this health state for five years, the intervention yields:
QALYs = 0.80 ? 5 = 4.0
Excel Implementation
| Function | Example Formula | Health Economics Application |
|---|---|---|
/ | =B2/C2 | Calculates utility using the Time Trade-Off method. |
| AVERAGE | =AVERAGE(D2:D101) | Calculates the mean directly assessed utility across respondents. |
| SUMPRODUCT | =SUMPRODUCT(UtilityRange,TimeRange) | Calculates QALYs using directly assessed utility values. |
| STDEV.S | =STDEV.S(D2:D101) | Measures variation in utility assessments across respondents. |
VBA (Optional)
Automate the calculation, validation and reporting of directly assessed utility values from respondent survey datasets.
Sources
- Torrance GW. Measurement of Health State Utilities for Economic Appraisal. Journal of Health Economics. 1986.
- Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW. Methods for the Economic Evaluation of Health Care Programmes. Oxford University Press.
- Gold MR, Siegel JE, Russell LB, Weinstein MC (Eds.). Cost-Effectiveness in Health and Medicine. Oxford University Press.
- Briggs A, Claxton K, Sculpher M. Decision Modelling for Health Economic Evaluation. Oxford University Press.
- NICE. Health Technology Evaluation Manual.
Related Concepts (2)
Frequently Asked Questions (6)
What is direct utility assessment?
The process of obtaining a health state utility value by asking a respondent to compare a described state against full health and death.
Source: Torrance GW. Measurement of health state utilities for economic appraisal. Journal of Health Economics. 1986;5(1):1-30. doi:10.1016/0167-6296(86)90020-2.
How does direct utility assessment differ from using a value set?
In direct assessment the respondent whose values are wanted is asked to place the health state themselves, by trading it off against time in full health or against a risk of death. Using a value set instead applies weights already elicited from a general population survey, so the individual only classifies their state and a pre-existing tariff supplies the number. Direct assessment captures the specific respondent's valuation but is demanding to administer, which is why tariffs are common in routine studies. Brazier and colleagues (2007) contrast the two routes.
Source: Brazier et al. 2007
How is a utility value assessed directly?
The respondent is presented with a described state and asked to value it relative to full health and death, for instance by stating the probability of death in a gamble on full health at which they are indifferent to the certain state, or the length of life in full health they would trade for a longer time in the state. The point of indifference locates the state's utility on the scale anchored by the two endpoints.
Source: Torrance 1986
Why anchor utility assessment to full health and death?
Utilities are anchored to full health and death so that the scale has a fixed and meaningful zero and one: full health takes the value one and death zero, allowing time in a state to be weighted by its utility, with a year in a state valued at 0.5 counting as half a year of full health. States regarded as worse than death can take negative values. The anchors give the scale the properties economic evaluation requires.
Source: Torrance 1986
What techniques are used for direct utility assessment?
The main techniques are the standard gamble and the time trade-off. The standard gamble derives the value from a choice between the certain state and a gamble on full health or death, reflecting risk. The time trade-off derives it from the length of full-health life a respondent would accept in place of a longer time in the state, reflecting the sacrifice of time. Both anchor the state's value against full health and death.
Source: Torrance 1986
What are the limitations of direct utility assessment?
Direct assessment is demanding for respondents and administrators, since the tasks require reasoning about risk or trading years of life, which some find difficult, and different techniques can yield different values for the same state. The standard gamble embeds attitudes to risk and the time trade-off attitudes to time, so each includes a factor beyond preference for the state itself. These features complicate interpretation and make direct assessment less practical than indirect instruments for routine measurement.
Source: Torrance 1986
Trust Record
Verified by Dr Darrin Baines
British health economist
Professional identity: darrinbaines.org
Verification date: 28 Aug 2025
Content version: 1.0.0
Canonical Identity
- Term code
- HE-EE-HU-017
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