Inconsistent Use of Cost-effectiveness Thresholds in NHS Scotland

This study finds an apparent mismatch in the decision making approaches of the SMC and the NHS Boards.

OHE today released a Research Paper on the use of QALY thresholds in NHS Scotland for health services that were “at the margin” in 2012–13, i.e. those for which investment or disinvestment was planned or occurred. The study was based on information from three sources.

OHE today released a Research Paper on the use of QALY thresholds in NHS Scotland for health services that were “at the margin” in 2012–13, i.e. those for which investment or disinvestment was planned or occurred.

The study was based on information from three sources. The starting point was public information from the Scottish Parliament’s examination of the NHS Boards’ expenditure plans. This was supplemented by interviews with the Finance Directors of Scotland’s territorial NHS Boards, which both gauged bases for decisions and gathered more detailed information on planned new expenditures and delayed or rejected spending plans. A literature review sought cost-per-QALY information for the marginal services identified.

The NHS Board interviews revealed a considerable and varied list of health care services and technologies at the margin of NHS spending in one or more of the 14 NHS Board areas in Scotland. The literature review discovered cost-per-QALY evidence for some, though not all, of these services. The reseearch found that any one health care technology typically has a wide range of cost-per-QALY estimates associated with it. The authors also found considerable overlap in the cost-per-QALY ranges for services experiencing investment and those experiencing disinvestment, implying “allocative inefficiency if the aim of the NHS in Scotland is to maximise QALYs”.

The interviews revealed that, in practice, cost-per-QALY evidence was not generally taken into account in NHS Board expenditure decisions about marginal services. The authors observe that the NHS Boards do not priorise their spending so as to maximize QALYs, but appear to be aiming instead at a multidimensional set of objectives. The Boards’ approaches to setting spending priorities, then, is fundamentally different from that of the Scottish Medicines Consortium (SMC), which bases its health technology assessments around the incremental cost per QALY.

This apparent mismatch between the approaches of the NHS Boards and the SMC raise important policy issues. The authors summarise the options: “Either the SMC should adjust its methods to more closely align with the objectives of the NHS or the NHS itself should attempt to more often make decisions based on the incremental cost per QALY gained of the services it provides. A third option is that the two organisations ‘meet in the middle’ by using cost per QALY evidence in the areas” where it is most appropriate and useful.

Download: Schaffer, S.K., Sussex, J., Devlin, N. and Walker, A. (2013) Searching for cost-effectiveness thresholds in NHS Scotland. Research Paper 13/07. London: Office of Health Economics.

For further information, please contact Jon Sussex.