The NHS and the cost-benefit dilemma
Posted on 25 January 2010
A study by the University’s Centre for Health Economics suggests that widening the perspective used by the National Institute for Health and Clinical Excellence (NICE) to assess the cost-effectiveness of new technologies may not benefit either the NHS or the wider economy.
Adopting a wider perspective without taking proper account of the implications of an NHS budget, which is fixed by government and beyond the remit of a body like NICE, has little to commend it
Professor Karl Claxton and Professor Mark Sculpher
The research examined a range of possible policies and a number of case studies from past NICE appraisals.
The new study suggested that taking into account effects outside the NHS would require trade-offs to be made between the overall impact on the health of NHS patients, other social concerns and wider costs and economic benefits
Extending the NICE perspective for drug assessment beyond the NHS raises questions of how to measure and value a range of wider economic effects, requiring controversial judgments about social values.
The research found that maintaining an NHS perspective would, in many circumstances, reflect overall economic effects because technologies which are regarded as cost-effective and offer overall health improvement for patients would also be expected to result in overall net economic benefits.
In addition, extending the perspective for all technologies appraised by NICE would impose additional costs on NICE’s appraisal process and introduce the possibility of a biased assessment if the economic benefits associated with other NHS care which may be displaced are more difficult to identify.
Consideration could be restricted to exceptional cases where the external economic benefits are likely to be substantially greater or less than current NHS activities which may be displaced.
This more focused approach would require greater clarity on how wider effects will be considered by NICE, as well as criteria to identify exceptional cases, possibly based on the nature of the technology, the type of disease and the patient population. But the researchers warn that repeated application of this policy will ultimately lead to significant impacts on the NHS and a positive bias in favour of new technologies.
Lead
researchers Professor Karl Claxton and Professor Mark Sculpher conclude: "Adopting a wider
perspective without taking proper account of the implications of an NHS budget,
which is fixed by government and beyond the remit of a body like NICE, has little to commend it."
The independent study, which was commissioned through the Department of Health’s Policy Research Programme, will be discussed at a workshop this Spring.
ENDS
Notes to editors:
- The research is available at www.york.ac.uk/inst/che/publications/publicationsbyyear.htm
- This is an independent report commissioned and funded by the Policy Research programme in the Department of Health. The views expressed are not necessarily those of the Department.
- The Centre for Health Economics is widely recognised as a leading research centre in its field. Operating across all areas of the discipline, with a particular emphasis on methodological thinking and high policy impact, CHE is known especially for its work in health technology assessment, health status measurement, performance measurement and productivity, health care financing, and econometric methodology. The University was ranked joint first for health services research in the 2008 Research Assessment Exercise.
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