How should NICE assess future costs and health benefits?
But a good many of us had reservations about the suitability of the Treasury's standard two per cent figure for economic growth, particularly in the light of the current state of global markets. However we also felt that there is a case for treating costs and benefits of health differently. Wit...
National Institute for Health and Clinical Excellence (NICE)
|Series:||Citizens Council reports
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|Summary:||But a good many of us had reservations about the suitability of the Treasury's standard two per cent figure for economic growth, particularly in the light of the current state of global markets. However we also felt that there is a case for treating costs and benefits of health differently. With respect to benefits, most of us agreed that there are occasions when NICE should depart from its current discounting policy - which is to apply a 3.5 per cent discount rate for costs and benefits in line with all public bodies. Although we were reluctant to compile a definitive list of the relevant factors, those that received a mention included interventions where costs were mostly up front but where benefits would be accrued over a long time in the future, those that yielded a very high QALY benefit or a total cure, and (rather less unanimously) those that involved the treatment of children.|
However, given that the saying "Prevention is better than cure" is a piece of folk wisdom acknowledged by public and professionals alike, it seems odd that health economists should employ a methodology offering such a paradoxical outcome where treatment is valued over prevention. Should circumstances arise in which a particular public health measure is disadvantaged by standard discounting, we would recommend that NICE take whatever measures were necessary to achieve a common-sense conclusion. Finally, we thought creatively about how discounting might be seen by different age groups in society. It seemed that, depending on whether the discount rate used could potentially favour a given group rather than another, views on the usefulness of discounting were likely to change accordingly
We felt that the question of which discount rate to use in which circumstances was beyond our competence, but that in practice it would be up to the committee to decide as they would know when it is appropriate. We were also aware that there is a health economic argument that suggests that this approach would have implications for the threshold range. One issue that surprised and puzzled us was the effect of discounting when the costs of an intervention are borne in its earliest stages, but the benefits accrue over many years or even decades: the case with most preventive and public health projects. We felt that the benefit of these interventions could be undervalued. We were told that, in practice, this is seldom a handicap because most public health measures are so cheap and/or cost effective that the negative effects of discounting are only a minor influence on the final calculation.
The Citizens Council provides NICE with a public perspective on overarching moral and ethical issues that NICE should take into account when producing guidance. Made up of members of the public, broadly representative of the adult UK population, the Council operates through a "citizens' jury" style meeting, to explore and respond to a question set by NICE. The Citizens Council met in November 2011 to discuss the question: "How should NICE assess future costs and health benefits?" This meeting explored the issue of 'discounting', which is the way in which economists calculate and value the costs and health benefits that occur in the future. A majority agreed that discounting is a legitimate feature of the calculation of future costs and benefits. Most of us accepted the relevance to health, in principle, of the three factors used to arrive at the discount rate ("catastrophe risk", "economic growth" and "time preference").
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