Saturday, January 13, 2007

How The NHS Rations Your Life

Queue for antibiotics

There's a fascinating interview in the Times today with Professor Sir Michael Rawlings, who heads the National Institute for Health and Clinical Excellence (NICE), the commissars' notorious treatment rationing committee.

He tells of the accounting formula NICE uses to decide which treatments- especially which pricey new treatments- it's going to sanction on the NHS.

"It is fiendishly complicated, but at its heart is its attempt to put a price on one perfectly healthy year (normal people call this a blessing, health economists call this a “quality-adjusted life year”, or QALY).

How much is this worth? Priceless, many would say, but NICE puts it at £30,000. Very roughly, if the extra cost of a new treatment to give one good year of health is more than that, there have to be exceptional circumstances for NICE to approve it."

Well, you think, maybe we've misjudged NICE. Maybe it is way more scientific than a crude matter of rationing. But why £30,000?

"The figure is, Sir Michael admitted, pretty arbitrary. Officially NICE does not take account of politicians, or the pockets of the NHS, but the figure is broadly pitched at what the country can afford."

Very interesting. Because that is not at all the way the economists who developed the QALY measure intended it to be used.

For those not versed in the dismal science, the QALY is merely the latest manifestation of a long-established tool in cost-benefit analysis. It was realised long ago that to make a comprehensive investment assessment of say a new public road scheme, you had to be able to assign a money value to the lives that would be saved from having a safer road.

So measures were devised. Initially they were based just on the economic value of the future output lost when someone got killed. But after a while, even dismal economists were persuaded that people are more than just the discounted present value of their future marketable output. So they started adding an arbitrary amount for grief, pain and suffering.

Later they came up with an alternative, somewhat less arbitrary approach, based on so-called "willingness to pay" (WTP). Typically, they'd analyse relative price data on choices that people were actually already making, to see what it revealed about the monetary value they assigned to risking their own safety. For example, you could compare the relative pay of different jobs, some very safe, like sitting in a Whitehall office making decisions about NHS rationing, some much less safe, like running the accounts department at the Baghdad General. The latter obviously pays much more, but for a good- and quantifiable- reason.

The upshot is that today we know for certain what a life is worth. Oh yes, we do. And here in Britain, it's...

Are you ready for this?


That's it. Simple as.

And it's an all-in figure, including £860,380 for the "human cost" (pain, grief, intrinsic enjoyment of life etc), and £451,110 for the output foregone from losing a drone.

Now stop squawking. I know you're priceless. But in terms of averages- as agreed by the Department of Transport no less- that's it. £1.3m.

So to translate that into a QALY- the value of one extra year of life with a good quality of health- you need to split it up into annual units. We won't go into the brain-deadening actuarial detail of how that's done right now, but it's not too hard, and you can find out here.

The key point is that the answer is not £30,000.

No, indeed. The snappily titled "Estimating a monetary value of a QALY from existing UK values of prevented fatalities and serious injuries" is a detailed paper just produced by an eminent team of academic health economists for the Department of Health itself. And they put the figure at £63,000 at 2003 prices*. Or twice the NICE figure.

So why the difference?

Going to have to hurry you...

Yes, absolutely right. If NICE used a figure of £63,000 there wouldn't actually be enough, er, money to go round.

So why bring QALYs into it at all? Whatever Rawlings might say about QALYs or quarks or anything else to make it sound scientifically objective, the figure of £30,000 is nothing more than a simple rationing device.

And there's more. Even setting aside the actual financial figures, how does NICE reach its QALY score for each of the treatments it assesses? Clearly I'm no Doc, but there are some big problems here. Not only must you assess the physical impacts of new treatments, you have to have a way of weighting together (valuing) the different impacts.

For example, suppose Treatment A sorted out your debilitating heart problem but left you blind, would you take it over Treatment B, which might leave you vulnerable to a heart attack but still sighted? No, huh? Well supposing it only left you deaf- would you take it now?

It's unclear exactly how NICE does this, but this paper suggests polling people to discover how they rate different health states. The following chart summarises what they found in terms of QALY values assigned by people to different possible bundles of health impairment:

Note for happy release fans: some health states are clearly viewed as being much worse than death (which by asssumption scores zero).

I must say I find the whole area very interesting, but sadly it's not going to help the NHS very much over coming years.

Because the main point of the Rawlings interview was so he could flag up loud and clear that the money has run out.

QALYs or not, the way forward is only too clear.

Rationing is back, and with our new jacked-up NHS cost base, this time there's absolutely no prospect of increasing the budget to resolve it.

*Footnote: The QALY study referenced does also produce some somewhat lower estimates for QALy (eg £45,000), but the figure consitent with the NICE approach is £63,000.


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