Searching for cost effectiveness thresholds in the NHS

Objectives The UK's National Institute of Health and Clinical Excellence (NICE) has an explicit cost-effectiveness threshold for deciding whether or not services are to be provided in the National Health Service (NHS), but there is currently little evidence to support the level at which it is set. This study examines whether it is possible to obtain such evidence by examining decision making elsewhere in the NHS. Its objectives are to set out a conceptual model linking NICE decision making based on explicit thresholds with the thresholds implicit in local decision making and to gauge the feasibility of (a) identifying those implicit local cost effectiveness thresholds and (b) using these to gauge the appropriateness of NICE's explicit threshold.Methods Structured interviews with senior staff, together with financial and public health information, from six NHS purchasers and 18 providers. A list of health care services introduced or discontinued in 2006/7 was constructed. Those that were in principle amenable to estimation of a cost-effectiveness ratio were examined.Results It was feasible to identify decisions and to estimate the cost-effectiveness of some. These were not necessarily 'marginal' services. Issues include: services that are dominated (or dominate); decisions about how, rather than what, services should be delivered; the lack of local cost effectiveness evidence; and considerations other than cost-effectiveness.Conclusions A definitive finding about the consistency or otherwise of NICE and NHS cost effectiveness thresholds would require very many decisions to be observed, combined with a detailed understanding of the local decision making processes.Resource allocation Cost effectiveness threshold Cost utility analysis QALYs