What is cost effectiveness
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This document discusses cost effectiveness analysis as a tool used by the NHS to determine which health interventions provide the best value for money given limited resources. It explains that cost effectiveness analysis compares the costs of an intervention to the health benefits gained, measured in quality-adjusted life years (QALYs). The NHS currently considers interventions costing £20,000 or less per QALY gained to be cost effective. The analysis found the Bexsero meningitis vaccine to have a cost per QALY above £20,000, so the JCVI could not initially recommend it for routine use, though some argue the model underestimated disease burden.
What is cost effectiveness
- 1. What is cost effectiveness? • There are infinite demands on our NHS, but a limited pot of money • Cost effectiveness analysis is a tool to help decide which interventions offer the best value for money and should be made available on the NHS • In theory, interventions that are low cost, but have high benefits in terms of health gains take priority over those with high costs and low health gains Costs • NHS costs of the health intervention minus the NHS costs saved by the intervention • Measured in £ Benefits • Health benefits gained by preventing /treating the health problem • Measured in quality of life years (QALYs) • 1 QALY = 1 year at full health *NHS costs also include personal social services costs
- 2. The cost effectiveness threshold • The NHS is currently valued at £20,000/QALY • All new interventions should cost £20,000/QALY or less, otherwise the NHS becomes less efficient (we end up spending more money on a given amount of health) Years of life saved PLUS Quality of life saved from preventing disease Vaccination costs MINUS Cost savings to NHS and social services from preventing disease The cost effectiveness assessment of Bexsero on which the JCVI based their interim statement gave a result which was considerably higher than £20,000 so they could not recommend the vaccine for routine use
- 3. Was the JCVI interim opinion correct? • A cost effectiveness model is a simplification of reality • The answer you get depends on the parameters that you feed into the model • MRF argued that the parameters underpinning the burden of meningococcal disease were undervalued