Comparing Economic Appraisal Guides in England

Debate continues about the methods that the UK’s NICE uses in its appraisals of medical technologies, including whether effects beyond the NHS should be considered using a cost-benefit approach. Examining economic appraisal guidelines issued by other official agencies offers an important opportunity to set NICE’s perspective in context. Ruth Puig-Peiró, an economist at the OHE, is engaged in research that examines how and how much various official UK guidelines differ.

Debate continues about the methods that the UK’s NICE uses in its appraisals of medical technologies, including whether effects beyond the NHS should be considered using a cost-benefit approach.  Examining economic appraisal guidelines issued by other official agencies offers an important opportunity to set NICE’s perspective in context.  Ruth Puig-Peiró, an economist at the OHE, is engaged in research that examines how and how much various official UK guidelines differ.  She presented preliminary results at the conference of the Spanish Health Economics Association (XXX Jornadas de Economía de la Salud) on 24 June 2010.

The objective of this research is to establish whether, how and to what extent NICE’s economic appraisals differ from HM Treasury Green Book[1] guidance and those issued by other government departments and agencies (e.g., Health and Safety Executive, Department for Transport, and the Department for Work and Pensions).  Comparisons are based on NICE’s Reference Case method and include the following dimensions: type of economic analysis, perspective on costs and benefits, unvalued costs and benefits, discount rate, distributional impacts, and use of decision guidelines.

Preliminary results show that important differences in perspective exist, with NICE’s view of benefits being unique and the focus on costs varying across the departments.   Cost-benefit analysis is the most common type of analysis used in official guidelines and is Treasury’s preferred methodological approach. By not employing cost-benefit analysis, NICE thus sidesteps Treasury’s recommendation that the monetary value for projected health gains be estimated before deciding whether to fund an intervention and at what level. Further research will extend the comparison to a greater number of economic appraisal guides.

[1]The Green Book is a guidance produced by HM Treasury.  It sets out the core principles on which all public sector economic assessment should be based.