Concept Architecture
Concept
Theoretically, Indirect Utility Assessment is a method for estimating health state utility values by administering a validated preference-based health-related quality of life instrument rather than directly eliciting preferences from respondents. It is founded on multi-attribute utility theory, whereby responses to a standardised descriptive classification system are converted into utility values using an externally derived societal value set. The method exists to provide a standardised, reproducible and comparable approach to utility measurement for economic evaluation.
Mathematically, indirect utility assessment has no universally recognised canonical mathematical formula. Utility values are generated by applying a validated scoring algorithm or country-specific value set to a respondent's health state profile. The mathematical framework maps combinations of health state responses onto a single utility index anchored on the dead?full health scale.
In practice, indirect utility assessment is implemented using validated preference-based instruments such as EQ-5D, HUI, SF-6D and AQoL. Respondents complete the descriptive questionnaire, after which published country-specific tariffs are applied to estimate utility values for quality-adjusted life year calculation, cost-utility analysis and health technology assessment.
Purpose
Used to estimate health state utility values through validated preference-based instruments and established value sets, providing standardised utility estimates for quality-adjusted life year calculation and economic evaluation.
Mathematical Formulae
Primary Formula
There is no universally recognised canonical mathematical formula.
Supporting Formulae
U = f(x?; ??)
where:
- U = estimated health state utility
- x? = vector of responses describing the health state
- ?? = coefficients from the validated value set (tariff)
Related Mathematical Methods
- Multi-attribute utility theory
- Preference scoring algorithms
- Country-specific value set estimation
- Quality-adjusted life year (QALY) calculation
Example
A patient completes the EQ-5D-5L questionnaire and reports the health state 1-2-2-3-1. Applying the UK EQ-5D-5L value set produces a utility estimate of 0.684. This utility value is combined with survival time to estimate QALYs within a cost-utility analysis comparing alternative interventions.
Excel Implementation
| Function | Example Formula | Health Economics Application |
|---|---|---|
| XLOOKUP | =XLOOKUP(A2,Tariff[HealthState],Tariff[Utility]) | Retrieves the utility value associated with a recorded health state from a validated value set. |
| INDEX | =INDEX(Tariff[Utility],MATCH(A2,Tariff[HealthState],0)) | Returns the appropriate utility weight from a published tariff. |
| SUM | =SUM(B2:F2) | Combines scoring components where the published algorithm uses additive coefficients. |
VBA (Optional)
Automate the scoring of completed preference-based questionnaires by applying country-specific value sets to generate utility estimates.
Sources
- Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW. Methods for the Economic Evaluation of Health Care Programmes. Oxford University Press.
- Briggs A, Claxton K, Sculpher M. Decision Modelling for Health Economic Evaluation. Oxford University Press.
- Brazier J, Ratcliffe J, Salomon JA, Tsuchiya A. Measuring and Valuing Health Benefits for Economic Evaluation. Oxford University Press.
- NICE. Health Technology Evaluation Manual.
- EuroQol Research Foundation. EQ-5D User Guides.
Related Concepts (2)
Library
Publications
1
NICE DSU Technical Support Document 8: An Introduction to the Measurement and Valuation of Health for NICE Submissions — Brazier, Rowen, TSD 8 ed., 2011 (NICE Decision Support Unit (University of Sheffield))
An introduction to the measurement and valuation of health for NICE submissions — the QALY, health-state utility values, generic preference-based measures, and the requirements of the NICE reference case.
Frequently Asked Questions (6)
What is indirect utility assessment?
The process of obtaining a health state utility value by applying a scoring algorithm from a prior valuation study to a respondent's questionnaire answers.
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 indirect utility assessment differ from direct utility assessment?
Direct utility assessment asks the respondent themselves to value a health state, for example by trading time or accepting risk, whereas indirect assessment asks only for a description of the state and applies a scoring formula built from an earlier valuation survey. The indirect route separates the person being measured from the people whose values supply the numbers, which makes it easy to administer and consistent across studies but ties every result to the assumptions of the original valuation. Brazier and colleagues (2007) compare the two routes.
Source: Brazier et al. 2007
How is a utility assessed indirectly?
The respondent completes a descriptive questionnaire, and their reported levels across the dimensions define a health state, to which a scoring algorithm assigns a utility. The algorithm comes from a prior study in which a sample valued a set of states, modelled to give values for every possible state. The respondent's own answers are the only input required at the point of measurement, since the valuation was done in advance and is reused.
Source: Torrance 1986
Where does the scoring algorithm in indirect utility assessment come from?
The scoring algorithm derives from a valuation study conducted beforehand, in which a sample of respondents, usually from the general public, valued a selection of the instrument's health states using methods such as the time trade-off or discrete choice experiments. These valuations are modelled to produce weights that assign a utility to any combination of levels the instrument can describe. The algorithm thus embodies the preferences of the valuation sample, applied to later respondents' descriptions.
Source: Torrance 1986
What are the advantages of indirect utility assessment?
Indirect assessment is efficient and consistent: respondents complete only a short descriptive questionnaire, so many can be measured quickly, and the same algorithm produces comparable utilities across studies. It reuses population valuations elicited once, avoiding demanding tasks for each respondent. These features make it the practical standard for collecting utilities in trials and studies, where valuing each patient's state directly would be infeasible. It is for this reason that indirect instruments have become the usual way to obtain utilities in routine research.
Source: Torrance 1986
What are the limitations of indirect utility assessment?
The utility depends on the scoring algorithm and the instrument, so it reflects the preferences of the valuation sample and the states the instrument can describe, which may not match the respondent's own values or capture all relevant health. A value set may not be available for the relevant population, and the instrument may miss dimensions important in a condition. The value is only as good as the descriptive system and the algorithm applied.
Source: Torrance 1986
Trust Record
Verified by Dr Darrin Baines
British health economist
Professional identity: darrinbaines.org
Verification date: 29 Aug 2025
Content version: 1.0.0
Canonical Identity
- Term code
- HE-EE-HU-043
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