There are broadly three approaches that can be taken to determine the threshold value:51,56social WTP, non-analytical approaches. Such as expert elicitation and shadow pricing of the budget constraint. This project is concerned with the latter approach to estimating the cost-effectiveness threshold. This is entirely consistent with the remit of the NHS in general and NICE in particular–they do not set the NHS budget but have to allocate those finite resources appropriately.
TABLE 36 Table showing cost per YLG results of Martinet al.papers57–59
PBC
Cost per YLG (£)
2005/6 data 2004/5 data
Cancer 13,137 13,931
Circulation problems 8426 7979
Respiratory problems 7397 N/A
Gastrointestinal problems 18,999 N/A
Diabetes 26,453 N/A
N/A, not applicable.
DOI: 10.3310/hta19140 HEALTH TECHNOLOGY ASSESSMENT 2015 VOL. 19 NO. 14
© Queen’s Printer and Controller of HMSO 2015. This work was produced by Claxtonet al.under the terms of a commissioning contract issued by the Secretary of State for Health. This issue may be freely reproduced for the purposes of private research and study and extracts (or indeed, the full report) may be included in professional journals provided that suitable acknowledgement is made and the reproduction is not associated with any form of advertising. Applications for commercial reproduction should be addressed to: NIHR Journals Library, National Institute for Health Research, Evaluation, Trials and Studies Coordinating Centre, Alpha House, University of Southampton Science Park, Southampton SO16 7NS, UK.
Papers seeking to elicit social willingness to pay and non-analytical approaches
The majority of the literature that has presented a proposed value for the threshold (in the UK, USA and elsewhere) has done so using valuation methods based on WTP for an additional health benefit.18–32,34–37 However, other approaches have been suggested. For example, the WHO’s 2002 report138suggested that interventions costing less than three times GDP per capita for each DALY averted represent good value for money.
Leeet al.139sought to update the US‘dialysis standard’often claimed to be the base of the US Medicare threshold.122The authors present a valuation of $129,090 per QALY based on current dialysis practice in the USA. Finally, in an appendix to their edited book, Towseet al.130provide an interesting set of results drawn from a set of participants to the associated workshop (the majority of which were health economists). The participants were asked to anonymously record their view on what threshold NICE should apply. Eighteen responses were recorded with the average of all responses being £29,000 per QALY. Papers considering the shadow price of the budget constraint
The systematic review only identified four different papers by three different authors that suitably fell into the category of shadow pricing of the budget constraint.
Williams8suggested investigating the cost-effectiveness of NHS interventions that represent the majority of the budget (he speculated that some 300 interventions accounted for about 90% of the cost incurred by the NHS). The purpose of this would be to identify current NHS activities that might not be cost-effective. He acknowledged the implausibility of conducting full technological appraisals on such a large number of interventions (estimating this would take 10 years, at which point it would be necessary to re-evaluate the initial appraisals), and thus suggested relying on expert opinion and existing patient data to speed up the process.
While Williams’recommendations related to identifying current interventions with a high cost per QALY as the basis for disinvestment, there is the potential to take this approach further and use it for a method to determine the cost-effectiveness threshold even down to the level of a local decision-maker. This was attempted by Applebyet al.49who conducted a feasibility experiment into the estimation of the
appropriate NHS threshold by examining decision-making in the NHS at a local level. The authors propose a structured model considering the new technology’s cost per weighted QALY gain in a table of all existing services. In an attempt to test the feasibility of this model they conducted interviews with senior NHS staff as well as investigating information on public health to construct a list of health-care services introduced or discontinued in 2006/7. The authors found that it was feasible to identify decisions and to make the important step of estimating their cost-effectiveness; however, they noted that any attempts to fully evaluate sufficient decisions as to estimate a threshold would require a detailed understanding of the decision structure at a local level as well as a significant number of observations.
The other key papers seeking to develop and implement methods for estimating the NHS threshold were those of Martinet al.57–59They aimed to establish a link between health-care spending and health
outcomes in the NHS after having adjusted for the need of the patient population. They made use of data around the observed mortality at PCT level in the NHS alongside expenditure data on health care across 23 programmes of care based on ICD-10 disease categories. As has been mentioned earlier in this chapter these papers present the cost per life-year for a range of PBCs; however, the key result of these papers is that it is possible to make use of existing data to determine such valuations for current NHS interventions. The authors concluded that although their results are highly limited and do not present a single cost per QALY estimate for the optimal threshold they can‘inform the decisions of NICE on whether their current threshold for accepting new technologies is set at an appropriate level’(p. 37). These studies are the precursor of analyses presented in this report, and further details can be found inAppendix 2and in Chapter 3of the main report.
In the area of the efficient allocation of health care it is also important to note the contribution of the earlier mathematical papers such as Stinnett and Paltiel16who outlined mathematical techniques to approach the problem through the use of a mixed integer programming approach. Although their approach differs from the interpretation of the threshold as used in this study it represented an important step in the evaluation of the methodology of seeking to solve the optimisation problem apparent in health care.