A Transatlantic Look at Value Considerations in Care Delivery

Jennifer Erickstad

February 2011, Vol 2, No 1 - Meeting Highlights


Sir Michael Rawlins, MDSan Diego, CA—Discussing the British government’s attempts to provide low-cost, high-quality care to its citizens, Sir Michael Rawlins, MD, the Chairman of the National Health Service (NHS)’s National Institute for Health and Clinical Excellence (NICE), discussed how the twin considerations of clinical effectiveness and cost-effectiveness guide the process and provided insights into the cost and quality evaluations conducted on drugs, devices, surgical procedures, and diagnostic methods in the United Kingdom.

How NICE Works
NICE functions in many different ways, Sir Rawlins explained at the American Society for Radiation Oncology (ASTRO) meeting, including promoting public health, developing quality standards, and enabling Internet-based research for practitioners. Its primary concerns, however, are conducting appraisals on the safety, efficacy, and cost of new treatments and drafting guidelines for appropriate care.

When undertaking clinical evaluations, NICE looks at randomized controlled trials (RCTs), observational studies, and systematic reviews, Sir Rawlins noted. In addition, the agency conducts comparative effectiveness research (CER) to determine if a new treatment is sufficiently better than an existing one.

Calling CER “quite tricky,” Sir Rawlins stated that although direct comparisons are ideal, their expense and unavailability often cause NICE to use indirect comparisons or mixed treatment comparisons. He hopes that the focus currently placed on CER by the US government will “make strides” in improving its methodology.

Although he noted that NICE’s clinical evaluations are robust, Sir Rawlins admitted “the real challenge” in the agency’s responsibilities is balancing its budget. “We have the problem that if you introduce one new treatment, something else has got to give,” he said, adding “we do not have enough money to do everything we want.” The agency, as part of the NHS, is funded by income tax and receives a finite budget each year from Parliament. According to Sir Rawlins, this has led to cost-effectiveness being required by law alongside clinical effectiveness as part of NICE’s evaluations.

Economic Evaluation
Three overarching principles influence the agency’s economic evaluation, Sir Rawlins explained. The economic perspective looks at the costs of the healthcare service, whereas an examination of cost-effectiveness focuses on whether the intervention provides value based on the opinion of NHS and the patient. The third principle— and what Sir Rawlins called the “most critical”—includes “walking a tightrope between utilitarianism and egalitarianism in distributing our resources.”

Specifically, the agency strives to provide a just distribution of resources that lays somewhere in between providing the “greatest good to the greatest number” and “providing everything for everybody.”

To examine how a new treatment compares to an existing one, the agency conducts a cost-utility analysis and determines the incremental costeffectiveness ratio. However, even after calculating this, the question still remains of what the cost-effectiveness threshold should be, Sir Rawlins noted.

After examining the analyses of other governments and taking advice from the World Health Organization, NICE determined that any treatment that costs less than $30,000 per qualityadjusted life-year (QALY) would likely be regarded as cost-effective, whereas any treatment valued at above $45,000 per QALY would likely be regarded as cost-ineffective. Sir Rawlins noted, however, that in some circumstances, advisory bodies do suggest treatments above the threshold, adding that the panels are encouraged “to make a judgment,” not follow a mathematical formula.

Summarizing the success that NICE has experienced while using its clinical and cost evaluations, Sir Rawlins stated that the agency “has managed to get respect from parliamentarians, health professionals, most patient organizations, and the public.”

In addition, he noted that although Sarah Palin described him as the “chairman of the death panel,” NICE has garnered significant international respect, with countries such as China, Columbia, Jordan, and Turkey seeking its assistance in improving their own health systems.