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We live in a world facing many interrelated challenges, and the choices we make about allocating public sector resources have never been more consequential. The perspective taken in an economic evaluation determines the costs and outcomes included in that evaluation…
We live in a world facing many interrelated challenges, and the choices we make about allocating public sector resources have never been more consequential. The perspective taken in an economic evaluation determines the costs and outcomes included in that evaluation and therefore shapes resource allocation and access to new treatments. In this blog, we review the (lack of) changes to NICE’s manual to include elements of a ‘societal perspective’.
This blog post is the fourth in a series on the new National Institute for Health and Care Excellence (NICE) health technology evaluation manual. Each post provides a critical discussion on a particular topic, including the expected implications of the changes (or lack thereof) in the manual; what is still missing; and what further research is needed.
We live in a world facing many challenges – from the devasting effect of COVID-19 on health systems worldwide to climate change and political instability. How we allocate public sector resources to address these competing but often interrelated challenges has never been more consequential. The perspective taken in an economic evaluation determines the costs and outcomes which are included in that evaluation, and therefore shapes resource allocation and access to new treatments. In this blog, we review the changes to NICE’s health technology evaluation manual to include elements of a ‘societal perspective’.
What is a societal perspective?
A healthcare system perspective focuses solely on the health effects produced by an intervention, and the costs to the healthcare system of delivering that intervention. A societal perspective, in the simplest terms, means that all effects and costs which matter to society are included – regardless of what form these take and where they accrue. The societal costs which have received the most attention in the literature are the financial outlays (e.g. for transport to receive healthcare) and productivity costs (the hours of work lost or gained as a result of treatment) borne by patients and their families and carers (Garrison et al., 2018). In terms of societal effects, arguments have been made for expanding the definition of health to include not just changes in quality and length of life but, for example, improvements in the wellbeing and life satisfaction of patients and carers that may not be adequately captured by traditional quality of life measures (Cylus and Smith, 2020). A societal perspective should also include effects which matter to society but accrue in other sectors, for example the effect of a treatment to reduce alcohol misuse on crime (Walker et al., 2019) or children’s ability to attend school regularly.
What perspective does NICE take?
The NICE Charter states than NICE’s key role is “to provide an independent assessment of the value of existing and new treatments and interventions for the system”. They do this “to benefit the population as a whole and to improve and ensure equity of access to all members of society.” Yet the new NICE manual states that health technologies should be assessed from an NHS and Personal Social Services (PSS) perspective. The only societal effects that are included are:
The last two effects are considered additional and should be presented separately from the main analysis, which always takes a narrow NHS/PSS perspective. In addition, no guidance was provided on how they should be measured or presented, which will make their consideration in decision-making challenging
What is the case for a societal perspective?
A societal perspective has the advantage of capturing a full range of the consequences of interventions – thereby better reflecting the broad public interest (Neumann et al., 2016). In a world of competing demands for public resources, this can help allocate resources to the most socially valuable interventions, as well as sending signals to innovators to invest in R&D of projects which are expected to maximise social value (Neumann et al., 2021).
Proponents also argue that taking a societal perspective in the assessment of health technologies is an important step towards optimal allocations of public money across government sectors (e.g. Jönsson, 2009; Johannesson et al., 2009). An OHE paper highlights the current gaps and inconsistencies in the approaches used to assess value for money across public sector activities.
What are the challenges of taking a societal perspective?
There are significant empirical and methodological challenges to the implementation of a societal perspective when assessing the value of health technologies. In particular, how to measure and value multiple, potentially overlapping effects remains controversial. However, there are many societal effects which can already be incorporated into standard calculations of a cost-per-QALY, including effects on carers’ quality of life; productivity; and unpaid and informal care (Neumann et al., 2016). Indeed, inclusion effects on carers quality of life is part of NICE HTA appraisals, and inclusion of productivity costs and effects is standard in the Netherlands and was until recently in Sweden (TLV, 2020; Versteegh, Knies and Brouwer, 2016).
An additional concern is that, by including productivity effects, a societal perspective would bias allocation of health resources towards working age populations. This is because technologies which lead to greater increases in a patient populations’ working hours would be valued more highly. However, is important to note that no perspective is free from equity concerns – and that methodological solutions exist to address these. The healthcare system perspective, for instance, tends to redistribute health away from people who have low capacity to benefit from treatment, or from the elderly who have shorter life spans (Soares, 2012). How far the new NICE manual addresses equity concerns is the topic of our next blog in this series.
What should happen next?
It is promising that the new NICE manual now allows for productivity effects to be included (in some circumstances) in the evaluation of new healthcare interventions. However, these changes do not go far enough. The incentives for developers to submit evidence on productivity and other societal costs and effects remain relatively weak given the lack of guidance on which evidence should be collected and how this should be considered in decision-making. In future methods reviews and changes, we urge NICE to give full consideration to their choice of perspective. This is a debate which raises fundamental questions about what matters to our society and the role of health and social care within it, and surely merits a case for change.
Cubi-Molla, P., Buxton, M. and Devlin, N., 2021. Allocating Public Spending Efficiently: Is There a Need for a Better Mechanism to Inform Decisions in the UK and Elsewhere? Applied Health Economics and Health Policy, 19(5), pp.635–644. 10.1007/s40258-021-00648-2.
Cubi-Molla, P., Mott, D., Henderson, N., Zamora, B., Grobler, M. and Garau, M., 2021. Resource Allocation in Public Sector Programmes: Does the Value of a Life Differ Between Governmental Departments? [Research Paper] London: Office of Health Economics. Available at: https://www.ohe.org/publications/resource-allocation-public-sector-programmes-does-value-life-differ-between
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