Balancing health and productivity: A vision for integrated healthcare evaluation.

Beyond QALYs: Why Productivity-Adjusted Life Years are the Future of Healthcare Evaluation

Jordan Keane in Health & Wellness May 2025 • 4 min read.

"Discover how integrating productivity with quality of life assessments can revolutionize healthcare and occupational safety policies."

In an era defined by scarce resources and shifting demographics, particularly the increasing demands from retirees and a shrinking working-age population, safeguarding the health and productivity of the economically active has never been more critical. This urgency underscores the importance of making informed decisions about healthcare interventions and occupational safety policies. Beyond the insights derived from clinical trials and observational studies, a thorough understanding of productivity outcomes is essential.

Traditionally, the health benefit of an intervention is defined by two dimensions: quality and quantity of life. The Quality-Adjusted Life Year (QALY), refined from multiattribute utility theory, offers a straightforward method to combine these dimensions. Along with Disability-Adjusted Life Years (DALYs), it remains a primary metric in healthcare evaluations. However, an alternative perspective has emerged: the Productivity-Adjusted Life Year (PALY).

This approach calculates the health output by multiplying a productivity index by years lived. Ranging from 0 (completely unproductive) to 1 (completely productive), this index encompasses factors such as absenteeism, presenteeism, and premature workforce exit. Though PALYs are gaining traction, especially in evaluating policies that improve occupational health and safety, they lack a solid theoretical foundation. This article explores the evolution of these measures, advocating for a more comprehensive evaluation framework.

QALYs vs. PALYs: Understanding the Key Differences

Balancing health and productivity: A vision for integrated healthcare evaluation.

The economic evaluation of interventions to improve occupational health and safety increasingly utilizes productivity outcome measures following the PALY framework. This approach measures the costs and effects of working environment interventions, concentrating on productivity changes while often sidelining health effects. Productivity, in this context, is quantified for each employee, considering sickness absence and reduced productivity at work (presenteeism). Many employers use this data for cost-benefit analyses, assessing if the costs of interventions are covered by improved productivity.

However, focusing solely on productivity may overlook broader societal benefits, such as improved employee health. Productivity effects are also frequently considered in healthcare evaluations. Traditionally, indirect earnings effects are subtracted from treatment costs, considering the present value of additional lifetime income for an individual. Yet, an emerging approach involves switching from QALYs or DALYs to PALYs, signifying a move towards valuing productivity as a primary outcome.

QALYs: Focus on health improvements in terms of quality and quantity of life, discounting productivity.
PALYs: Focus on productivity gains, potentially overlooking the broader health implications.
Integrated Approach: Recognizes both health and productivity as crucial outcomes, offering a more complete evaluation.

To address these gaps, a unified framework is needed—one that allows compromises between QALYs and PALYs. After all, QALYs dismiss productivity, while PALYs overlook quality-of-life concerns. Combining these aspects provides a more complete, societal perspective. By integrating these measures, decision-makers can better assess the comprehensive impact of healthcare interventions and workplace safety policies.

The Future of Healthcare and Productivity Measurement

In conclusion, by acknowledging the interplay between health and productivity, and by using comprehensive evaluation tools like integrated QALYs and PALYs, we can pave the way for more effective, equitable, and socially beneficial healthcare and workplace policies. The ultimate aim is to promote interventions that not only extend life but also enhance its quality and productive capacity.

Everything You Need To Know

What is a QALY, and why is it used in healthcare evaluation?

A Quality-Adjusted Life Year, or QALY, is a metric used to evaluate health outcomes by combining both the quality and quantity of life into a single value. It's derived from multiattribute utility theory and is used to assess the overall health benefit of a medical intervention or program. QALYs are significant because they allow healthcare decision-makers to compare different treatments or interventions on a common scale, helping to allocate resources efficiently. However, QALYs don't directly account for productivity, which is a key consideration when evaluating interventions that impact a person's ability to work and contribute economically. This is where other measures like PALYs become important.

What is a PALY, and when is it most useful?

A Productivity-Adjusted Life Year, or PALY, is a measure that calculates health output by multiplying a productivity index by the years lived. This productivity index ranges from 0 (completely unproductive) to 1 (completely productive) and considers factors like absenteeism, presenteeism, and premature workforce exit. PALYs are particularly relevant in evaluating policies aimed at improving occupational health and safety. While PALYs highlight the economic impact of health interventions, they may not fully capture the broader health implications, such as overall quality of life, that QALYs emphasize. Thus, an integrated approach is needed to combine both health and productivity outcomes for a comprehensive evaluation.

What is the key difference between QALYs and PALYs?

The key difference lies in what each measure prioritizes. QALYs primarily focus on improvements in health, considering both the quality and quantity of life, while PALYs emphasize productivity gains. QALYs might overlook the economic impact of health interventions on an individual's ability to work, whereas PALYs might not fully account for the overall health and well-being beyond productivity. For example, a treatment that significantly improves quality of life but doesn't impact productivity would score high in QALYs but might not be as valued in PALYs. Conversely, an intervention that boosts productivity but has minimal impact on quality of life would be favored by PALYs. An integrated approach that balances both is crucial for a more holistic evaluation.

Why is it important to integrate both QALYs and PALYs in healthcare and workplace policy evaluations?

Integrating both QALYs and PALYs provides a more comprehensive view of the impact of healthcare interventions and workplace safety policies. By considering both health improvements and productivity gains, decision-makers can better assess the overall value and benefits of different interventions. This integrated approach allows for a more balanced perspective, ensuring that both health outcomes and economic considerations are taken into account. It acknowledges that both aspects are important for societal well-being. The absence of this integration can lead to skewed decision-making, where either health or productivity is overemphasized at the expense of the other.

How can using integrated QALYs and PALYs affect healthcare and workplace policies in the future?

Using integrated QALYs and PALYs can lead to more effective, equitable, and socially beneficial healthcare and workplace policies. By acknowledging the interplay between health and productivity, we can prioritize interventions that not only extend life but also enhance its quality and productive capacity. This holistic approach ensures that policies are designed to improve both individual well-being and economic output, leading to a healthier and more prosperous society. This approach promotes interventions that offer dual benefits, improving overall societal welfare. Ignoring either health or productivity can result in policies that are either economically inefficient or fail to adequately address the health needs of the population.