Aging populations are redefining the value of a healthy life year

By Dr. Priyom Bose, Ph.D.Reviewed by Benedette Cuffari, M.Sc.Jan 13 2026

As populations age and healthcare budgets tighten, a new valuation framework shows why the “price” of a healthy year of life depends on who gains it, and where policy choices may be quietly misallocating billions. 

Study: Deriving monetary value of quality-adjusted life years through life extension from the value of a statistical life. Image Credit: THICHA SATAPITANON / Shutterstock.com

Efficient, evidence-based resource allocation using quality-adjusted life years (QALY) is essential, especially as global life expectancy rises. A recent study published in Scientific Reports examines how considering age and country-specific demographic factors in QALY estimates can improve healthcare policy decisions and resource allocation.

Concerns over increased healthcare costs due to the aging population

Advances in medical technology and public health have led to rapidly aging populations worldwide, which contributes to rising healthcare costs and social burdens. By 2040, healthcare spending in Japan is expected to nearly double, raising concerns about the sustainability of healthcare systems.

As similar demographic shifts are anticipated in other developed countries, it is increasingly important to incorporate healthy life expectancy into policy decisions. Achieving sustainable healthcare will require prudent, evidence-based resource allocation.

Tools that guide healthcare policy

Cost-benefit analysis in healthcare often uses the value of statistical life (VSL) and QALY to guide policy and allocate resources. Whereas VSL represents the monetary value people place on reducing mortality risk, QALY combines quality of life and life expectancy into a single measure.

VSL and QALY enable comparisons across healthcare policies and support evidence-based decision-making. For example, organizations like the United Kingdom National Institute for Health and Care Excellence use QALY to evaluate medical technologies and guide efficient resource use.

Despite its widespread adoption, the use of QALY is associated with notable limitations. By applying the same value to all age groups, despite differences in health status and life expectancy, QALY estimates may lead to biased outcomes. QALY values may also be adopted from other countries without considering local population and economic factors, which can affect the accuracy of policy evaluations and lead to inefficient resource distribution.

A new QALY metric for healthcare policy makers

The current study proposes a QALY metric based on VSL that accounts for age-specific health status and life expectancy while focusing on the monetary value of life extension rather than improvements in quality of life. The VSL economic model was applied to estimate the value of life extension (LEV).

LEV was then combined with quality-of-life (QoL) measures to calculate the monetary value of one QALY for any given age and scenario. Importantly, the analysis does not directly model policies that improve QoL; instead, it values life extension under different QoL trajectories. This QoL framework was used for conducting policy evaluations using the QALY metric.

Researchers reported total VSL estimates for each scenario, followed by age-specific and average monetary values of a QALY in millions of Japanese yen (JPY). By comparing QALY values across scenarios, age-dependent differences in the value of one QALY were identified.

The VSL estimates for scenarios SCN1, SCN2, SCN3, and SCN4 were quantified as 457.6, 468.6, 452.9, and 462.8 million JPY, respectively.

The monetary value of one QALY across different ages and scenarios was calculated using VSL. Population-weighted averages were estimated by multiplying each age group's QALY values by its population distribution and averaging the results.

In all scenarios, the monetary value per QALY increased with age. When comparing scenarios, population-weighted average QALY values were highest in SCN1, followed by SCN4, SCN3, and SCN2.

The typical range of QALY values was compared to the highest and lowest values for each age group. Between ages 20 and 60, SCN3 had the highest monetary QALY values, while SCN2 had the lowest.

Cost reductions based on differences between the conventional QALY and the study’s age- and scenario-specific QALY estimates were calculated. If the QALY was set at five million JPY, a larger proportion of SCN1 led to negative cost reduction, whereas a larger proportion of SCN2 correlated with positive cost reduction.

Conclusions and future outlook

Longer life spans and aging populations are increasing healthcare costs and posing challenges to the sustainability of current systems. The proposed VSL-based QALY approach enhances policy relevance by considering demographic factors, such as age and quality of life.

Although conventional and new QALY estimates were broadly aligned, the new method revealed more detailed variations by age and quality of life, which can be used to allocate health resources more efficiently. Taken together, these findings emphasize that policies aimed at extending healthy life expectancy could help control costs, although the analysis does not account for the costs of preventive, educational, or social interventions required to achieve such health improvements.

Further research is needed to apply this QALY estimation method in practical policy settings, with particular attention to avoiding double-counting of consumption-related utility. Exploring alternative calculation methods, such as nonlinear health-utility models, income-health interactions, and different discounting approaches, could also enhance accuracy. Validating the framework using international datasets beyond Japan and refining country-specific scenarios, especially those that address improvements in quality of life, will strengthen future applications.

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