NICE Methodological Guidelines and Decision Making in the National Health Service in England and Wales

Abstract

The National Institute for Clinical Excellence (NICE) responds to requests by the Department of Health for guidance on the use of selected new and established technologies in the National Health Service (NHS) in England and Wales. This paper asks whether the NICE methodological guidelines help NHS decision makers meet the objectives of maximum health improvements from NHS resources and an equitable availability of technologies. The analytical basis of the guidelines is a comparison of the costs and consequences of new and existing methods of dealing with particular conditions using the incremental cost-effectiveness ratio. We explain why information on the costs and consequences of a particular technology in isolation is insufficient to address issues of efficiency of resource use. We argue that to increase efficiency, decision makers need information on opportunity costs. We show that in the absence of such information decision makers cannot identify the efficient use of resources. Finally we argue that economics provides valid methods for identifying the maximisation of health improvements for a given allocation of resources and we describe an alternative practical approach to this problem. Drawing on the experience of Ontario, Canada where an approach similar to that proposed by NICE has been in use for almost a decade, and recent reports about the consequences of NICE decisions to date, we conclude that instead of increasing the efficiency or equity of the use of NHS resources, NICE methodological guidelines may lead to: (i) uncontrolled increases in NHS expenditures without evidence of any increase in total health improvements; (ii) increased inequities in the availability of services; and (iii) concerns about the sustainability of public funding for new technologies.

Appendix

Table I describes four hypothetical different new programmes aimed at treating four different conditions. Each programme is described in terms of the additional effects and additional costs (for all patients with the disease) as compared with the current way of treating these patients together with the ICER. Suppose that the government has allocated a budget of $20 million for new programmes and has asked a committee to recommend which programmes it should pay for.

Suppose that the committee decides that $50 000 per QALY is an acceptable ‘price’ to pay for health improvements. Under this approach the committee approves only programme A. The total health improvements increase by 360 QALYs. However programme A does not use up the entire budget.The residual budget is only sufficient to fund programme D. But this programme fails to meet the acceptable ‘price’ of the committee.

Notice that although programmes B and C fail to meet the acceptable ‘price’, using the additional resources to support these two programmes would generate 388 additional QALYs, i.e. more health improvements than produced by investing resources only in drug A.

Even if the residual resources of $2 million associated with buying programme Awere to be used on programme D (there are insufficient residual resources to purchase programme B or C) the total health improvements generated from adopting programmes A and D is 380 QALYs, less than the 388 QALYs produced by programmes B and C. Irrespective of how residual resources are used, purchasing programme A does not lead to an efficient use of resources. In other words, the use of the ICER fails to maximise the health improvements from a given (additional) budget.