NICE changes

There are considerable differences between the British and American health services, although the differences are not so great as is sometimes made out. In both countries the greater proportion of care is paid for by the taxpayer (surprisingly the American taxpayer pays out a greater proportion of GDP than the British taxpayer). In both countries there is a system whereby a third party insurer is left with the bill. The proportion paid for by the private insurer and the taxpayer certainly varies in both countries, but not by as much as you would think. In both countries a regulator decides whether or not a particular treatment is licensed (the FDA in America; the MHRA in the UK). What is different among other things is the organization known as the National Institute for Health and Clinical Excellence or NICE which has a regulatory role in the UK.

NICE has been a matter of particular ire for some of my American correspondents who have warned that should such an organization be part of Obama's plans, it would be tantamount to the introduction of 'death committees'.

This is to misunderstand how NICE works. Before NICE it was left to local conglomerates to decide whether the taxpayer would pay for a new drug that had been licensed by the MHRA (which generally makes very similar decisions to the FDA). The local conglomerates were very arbitrary about how they chose one drug over another - the cancer doctor might shout louder than the dementia doctor or vice versa. This resulted in what became known as 'postcode prescribing'. If you lived in one district you might get the drug but a mile up the street you might not.

NICE was introduced to counter this unfairness. If a drug was regarded as cost-effective for a particular condition, then a local health authority was obliged to provide it, however, short their budget might be and no matter how loudly a particular specialist shouted. NICE had no power to say a particular drug should not be prescribed, but if the budget was tight, market forces would prevail. Health authorities limited their prescribing to what they must provide and pay for. If the drug was not NICE approved, it was always possible to get it paid for through a private insurance company, but they would not let you join a scheme just when the need became apparent. The point about insurance is that it is take out before your house catches fire. Unfortunately, only about 20% of the population has private insurance. A third option is to put the money that could have bought a health insurance policy into a savings scheme and pay for your drugs yourself.

In the current austerity governments are bound to look at what they spend on healthcare to see whether they get value for money. For this reason among many American authorities are looking at NICE to see whether the template can be adapted for American use. An article in last week's New England Journal of Medicine from experts at John Hopkins explores the subject.

NICE finds itself changing its nature as the government moves to what it calls 'value-based pricing' of pharmaceuticals in 2014. Currently, NICE's decision-making process uses a cost-effectiveness threshold, based on the number of quality-adjusted life-years (QALYs) gained with a particular drug for a given cost (between 20 and 30,000 pounds, ($32,000-$48,000)- the goal being to secure as much public health benefit as possible within a specified budget determined every 2 years. Other social values are not formally reflected in this threshold, but NICE's decision-making committees are expected to consider them in their deliberations, and in practice they do affect outcomes. I wonder what would be the result if there were a disease that only affected university professors or CEOs of large companies; would the threshold be different.

This strictly utilitarian approach does not fit easily with people's ideas of fairness and to circumvent this, the government have introduced a special cancer fund to help sufferers who might fall foul of the £30,000 maximum. Value-based pricing offers a new approach to incorporating values. It would begin with a basic price threshold, expressed as cost per QALY and retain NICE's central role “both in undertaking pharmacoeconomic assessments and in providing advice to the NHS on the relative clinical and cost effectiveness of treatments.” But the new approach, says the Department of Health, will better reflect “all the components that contribute to a treatment's impact on health and quality of life,” including “important factors that patients and society value.Under the new system, the Health Ministry would negotiate prices for new drugs with manufacturers, but prescribing decisions would be left to individual doctors who are given a capitation-based budget by the government and need not follow particular decision-making processes. And although NICE would continue to provide advice on the optimal use of new drugs, that advice is unlikely to translate as now into a constitutional right to access.I'm not completely clear how these changes would operate in practice. I suspect that they are merely there to allow more flexibility into the system that will allow the middle classes with 'sharp elbows' to get things that other people will be denied. In other words it will keep the Daily Mail off our back.

Although the British and U.S. health care systems differ, some policy experts in both countries see improving health care value propositions as one solution to the conundrum of sky-rocketing costs and limited resources. The U.S. Affordable Care Act explicitly rejects Britain's National Health Service model, with its global budgeting and public acceptance of prioritization and consideration of costs. Nevertheless, the British experience may carry important implications for U.S. health care reform.NICE's history and the British government's new turn demonstrate that, as a political if not a moral matter, the value of health care cannot be defined solely in terms of comparative clinical effectiveness or health outcomes. But clearly it is hard, politically and technically, to define value, even for an organization that has pioneered approaches to expanding the meaning of value in healthcare.