Beyond the Memoryless Cohort: A Critical Re-evaluation of Markov Assumptions, QALY Frameworks, and a Need for Next-Generation Health Economic Modelling A Scoping Review with Conceptual Synthesis

Abstract

Anuj Gupta

Objectives:The scoping review aims to understand the structural, epistemic, and ethical boundaries of the commonly used and popular health economic modelling tools and methodologies—especially the cohort Markov model and the quality-adjusted life-year (QALY). The aim is to further outline a scope and research agenda for next-generation modelling approaches, which can inform policymakers, leading to an equity-sensitive resource allocation in an age of targeted medicine, digital health, and real-world evidence (RWE).

Methods: The structured scoping review leverages PRISMA-ScR methodology to identify and establish structural, knowledge-based, and ethical limits of presently used health economic models using evidence from related literature between 2015 and 2025, identified through systematic searches of Scopus and PubMed/MEDLINE. Further, the research for the paper also includes public information on ISPOR-SMDM Good Research Practices, NICE Decision Support Unit guidance, and grey literature from HTA bodies. For analysis, multiple variables, such as model architecture, structural-uncertainty management and handling, validation approach, equity sensitivity, RWE integration, and AI/ML augmentation, were considered. Thematic synthesis was augmented through systems-mapping analysis and a conceptual framework proposal.

Results: A total of 847 records were retrieved from systematic research of published and grey literature. 62 of the 847 records met the inclusion criteria. Following an in-depth analysis of the included research, the Markov assumption of memoryless gives rise to three critical systematic challenges:

• Ahistorical transition estimation

• State-space explosion under heterogeneous treatment sequencing

• Suppression of patient-level variance

Further, while the utilitarian aggregation underlying QALYs is distributionally neutral, it is increasingly contested by approaches such as distributional cost-effectiveness analysis (DCEA) and the application of severity modifiers, although uptake remains limited. Additionally, many models leveraging these methodologies were found to rely on assumptions which do not fully reflect health and health system operations. Therefore, to address these challenges, a conceptual ‘Strategic House’ framework—which integrates causal systems, flexible model engines, equity analysis, and real-time decision support is proposed.

Conclusions: Advancing HTA requires a transition to adaptable, routinely updated modelling approaches that explicitly prioritize equity. While the Strategic House framework provides a robust foundation for reforming national HTA systems, real-world implementation and evaluation are critical next steps.

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