Decades of advances in medical technology and public health are causing global populations to age. While achieving longer lives is certainly a net positive, this demographic shift is placing an ever-growing strain on national budgets, and many countries around the world are struggling to maintain sustainable health care systems.
Japan, which boasts one of the world’s longest life expectancies, faces an especially big hurdle, with health care expenses projected to nearly double by 2040.
To meet this challenge, governments must make informed and scientifically grounded decisions on how to allocate resources effectively. A widely used metric to guide such decisions is the quality-adjusted life years (QALY), which measures the value of a health care intervention by factoring in both the length and quality of the life gained.
Though useful, this metric has a fundamental flaw in that it is often calculated as a uniform ‘one-size-fits-all’ number. It thus fails to account for the different health needs, remaining life expectancy, and quality of life (QoL) experienced across different age groups, meaning a year of good health is often valued the same for a 20-year-old as it is for an 80-year-old.
New framework for valuing QALY
To tackle this limitation, a research team led by Professor Ryuta Takashima from the Department of Industrial and Systems Engineering, Tokyo University of Science (TUS), Japan, has developed a new framework for evaluating the monetary value of the QALY.
Their study, published in the journal Scientific Reports, presents a model based on the “value of a statistical life (VSL)”—a measure of society’s willingness to pay for a reduction in mortality risk—and applies it to socioeconomic data from Japan.
This work was co-authored by Assistant Professor Kazuya Ito and Mr. Yusuke Tanizawa from TUS, the latter of whom completed his Master’s course in 2024.
The core of their methodology lies in adjusting the QALY value based on two key factors: age and lifetime QoL scenarios. The team modeled several distinct QoL scenarios to represent the non-uniform ways an individual’s health status can decline throughout their life.
By dividing the value of gaining an extra year of life by the QoL at any given age, they created a new VSL-based QALY that varies with both a person’s age and their health trajectory.
Key findings from Japan’s data
The analysis of data from Japan yielded three key findings. First, while the conventional QALY estimate of 5 million JPY (Japan’s current figure) was consistent with the team’s averaged QALY, their model revealed that the true value varies significantly by age.
They found that policies targeting younger individuals should be evaluated with a lower QALY value to be deemed cost-effective, whereas policies targeting older individuals may be effective even at a higher cost per QALY. This implies that the benefits from a life expectancy gain increases with age–the older population recognizes the value of additional expectancy earlier than the younger population.
Second, the results clarify the economic benefits of promoting good health throughout life. The researchers demonstrated that the monetary value of one QALY is actually the lowest in scenarios where individuals maintain a high QoL for a longer duration. In other words, when most of the population is healthy, the relative monetary value of gaining one additional year of perfect health decreases.
Third, by modeling policy cost reduction effects, the team showed that policies, which succeed in extending healthy life expectancy lead to a significant reduction in social health care costs. Shifting a larger proportion of the population toward scenarios of sustained good health could thus lower the average QALY value significantly, reducing the budget required to achieve nationwide health benefits.
Implications for policy and global health
Overall, this innovative approach moves beyond the limitations of a uniform QALY, allowing for a more accurate and nuanced cost-benefit analysis.
“Our findings help clarify the value of extending healthy lifespan according to QoL and age, making it possible to present measures for the rational allocation of medical resources,” explains Prof. Takashima.
The team also emphasizes that their model can be applied to any region by using the target area’s specific socioeconomic data, providing a powerful tool for policymakers everywhere.
“In a future world of aging populations and declining birth rates, the intrinsic value of the QALY is likely to increase over time. The policy evaluation example presented here for Japan serves as a model case for deriving the monetary value of the QALY under such a situation, offering valuable insights into future global demographic shifts,” concludes Prof. Takashima.
This research ultimately highlights that the smart, long-term solution to rising health care costs is not just treating the sick, but actively extending the years people spend in good health.
Publication details
Yusuke Tanizawa et al, Deriving monetary value of quality-adjusted life years through life extension from the value of a statistical life, Scientific Reports (2025). DOI: 10.1038/s41598-025-29794-6
Journal information:
Scientific Reports
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