NICE job. Cost-effectiveness in the UK

Yesterday I went to a high powered lunch put on by HealthTech, with a high powered crowd attending (including the head of the California Dept of Managed Health Care, lots of Kaiser Permanente people, Arnie Milstein from Mercer, et al).

The speaker was Andrew Dillon, the head of the National Institute for Clinical Excellence (NICE), the UK’s technology assessment agency. But unlike the late and somewhat lamented Congressional OTA that the Republicans killed in 1995, NICE has teeth. NICE is only well known in the US as being the agency that stops new wonderful treatments getting to blighted Brits who are instead left to die in the streets.

The way this works, as Dillon explained to the somewhat incredulous head of the California Dept of Managed Healthcare (and I paraphrase) was that if NICE says something’s off limits (such as a new drug) a doctor won’t prescribe it. And if they did, the pharmacy wouldn’t fill it. And if they tried to, well they wouldn’t find it because the hospital wouldn’t have bought it. Such power! And I’m sure the envy of the many regulators and payers in the room.

However, Dillon explained that contrary to popular belief there isn’t a straight cut off point for approving new technologies.

There is a pretty steep S curve, and lots of questions are asked
about treatments that come out in the steep part of the curve between
25-35,000 GBP US per QALY,
and very hard questions are asked above 37–40,000 GBP per QALY. The
distribution of decisions to recommend or not recommend a treatment is
along that curve. However, the curve isn’t rigid. For example NICE
rejected a treatment for flu for healthy adults in the low range, but
did support Gleevac even though it was well above 70K per QALY.


(Chart lifted from Dillon’s talk — note he converted this to US money for the benefit of us dumb yanks who can’t divide by 2!)

The other key point that Dillon stressed is that to start with the
NHS has been underfunded compared to other European countries and
British medicine has always had a conservative culture—so it has been
bad at introducing new interventions. Part of the early work was done
bringing the system up to speed and making sure that the NHS were using
cost-effective new treatments and guidelines. On the other
hand, when they systematically went to look for stuff that was
ineffective but still being used, NICE found that most of that had been
driven out. So the British medical culture might be described as
conservative but decisive.

Overall most of the publicity is about NICE’s negative recomendations.
However, most recommendations are positive — 72% with only 3% negative.
Some 25% have been positive AND negative. In other words some uses of
the drug or device have been approved but not all the ones that it was
marketed for. The choice of what is put through the process are
generally made by the Department of Health, which NICE uses independent
academic boards to review the evidence.

I asked whether it could work here in the US, given that NICE (set
up in 1999) basically made explicit what was implicitly done already by
senior clinical staff in the NHS. He was clear that this had to be done
by stakeholders working together, and that there was potential for
tensions if imported to a different culture. (I think that meant no!).

So could it happen here? NICE was designed explicitly to fit into the UK system. But its central ambition is to get the optimal
benefit of the resources used. Dillon felt that that concept should be
beneficial and transferable to other payers elsewhere. In UK polls,
there’s resounding support for making the best use of resources, but
there’s little support for overtly using costs as a metric for making
decisions. Dillon was at great pains to stress that one of the most
important things was that this was all open—and that the process was
well understood and open politically.

Frankly neither getting optimal use out of resources spent or being very open sound very much like American health care to me!

In terms of implementation, NICE has 6 consultants who liaise with
the health care system, and they also give the primary care trusts
(sort of the UK version of HMOs) tools to model the costs of NICE
guidelines, and also tools to show them implementations — even ways to
persuade doctors to change behavior.

But this does not add up to 100% compliance wth NICE guidelines.
They still need docs to be willing to change their practice and they
also need the local primary care trusts and hospitals to take action.
Sometimes it works well (usually tech assessments) sometimes not so
well (usually guideline recommendations). But there is some evidence
that compliance with NICE at least in the hospital world is getting
better. On self reported data the rate of hospital CEOs saying their in
compliance and they’ve gone from being 85% compliant 2 years ago to 95%
now. Of course when the recommendation is to do something new, the
hospitals complain that NICE “didn’t send a check with their recommendation” but my personal experience is that GPs in the UK do
make extensive use of the NICE guidelines.

So what’s the future? According to Dillon, NICE enjoys firm
political support across the spectrum in the UK. In fact the government future and proposed charter for the NHS will include a
mandate for the NHS to adopt new NICE guidelines more quickly. In other
words, NICE guidelines are now used as a tool to improve the
performance of the NHS.

In fact the NHS is about to triple the budget of NICE (from GBP 32m
to 100m)and as of this year, NICE data & recommendations will be
integrated into some clinical workflow such as being included in
pathology reports, clinical support systems and GP’s IT systems.

What Dillon says is that this all works because of the wide support
for the NHS in general in the UK. The Brits realize that the NHS has to
do what it can with what it’s got, and that in order for everyone to be
covered, everyone has to chip in.

And that, of course, may be the basic underlying problem as to why
such an agency may not be able to be established or evern survive here.

Livongo’s Post Ad Banner 728*90

Leave a Reply

18 Comment threads
0 Thread replies
Most reacted comment
Hottest comment thread
17 Comment authors
BeenishWockhardt Hospitals, Indiajob searchPaul CalmarksKaren Gerber Recent comment authors
newest oldest most voted

Health care provider may refer to either an individual or an institution that provides preventive, curative, promotional or rehabilitative health care services in a systematic way to individuals, families or communities.

Wockhardt Hospitals, India

Hi, Nice Information. keep Updating Find High quality Health service @ affordable cost providing Wockhardt Network Hospitals in India Wockhardt Hospitals, Bhavnagar | NUSI Wockhardt hospital, Goa | Wockhardt Heart Hospital, Nagpur | Wockhardt Superspeciality Hospital, Nagpur | Wockhardt Hospitals, Nashik | N M Virani Wockhardt Hospital, Rajkot | Adventist Wockhardt Heart Hospital, Surat | Sterling Wockhardt Hospital, Vashi, Navi Mumbai Wockhardt Hospitals, India offers Core Health Specialities Heart Care | Brain & Spine Care | Bone & Joint Care | Minimal Access Surgery | Laparoscopic Surgery | Urology Have a look on our International Patients Services: http://on.fb.me/daIWI3 Do visit… Read more »

job search

This post is really very appreciable.your post is very advantageous for me and very good.but have not been able to find a job to put it to use. Can anyone help me find something in S WI or N IL? Thanks in advance. PS I would also be able to do any/all office work.

job search

This post is really very appreciable.your post is very advantageous for me and very good.I am suprised that not more is known about NICE’s stance of removing healthy impacted wisdom teeth.and I see no evidence that anyone in Washington or the statehouses are ready to adopt the British system on that.

Paul Calmarks

Very impressive article.

Karen Gerber
Karen Gerber

Hi, I’m looking for a job in medical billing and coding. Is it necessary to be HRIT certified? I have a diploma from a school in CO, but have not been able to find a job to put it to use. Can anyone help me find something in S WI or N IL? Thanks in advance. PS I would also be able to do any/all office work.

jobs guide

I believe there are quite a few UK based job search engines company like JobHits (http://www.ukjobsguide.co.uk/) which provides more advanced search, filtered options. Good thing is they are UK based rather than US own the world kind of company.


I am suprised that not more is known about NICE’s stance of removing healthy impacted wisdom teeth. They do not take out healthy impacted wisdom teeth in Britain thanks to NICE. That is evidenced based medicine for you.

Ramon Castellblanch
Ramon Castellblanch

I’m not sure that the new Baucus/ Conrad bill on comparative effectiveness is good news for those concerned about prescription drug quality and safety. The bill appears to include an oversight board for the research that would give a majority to the healthcare industry. As I read a report on it, board would have 21 seats; drug-makers would get three, medical device makers would get three, insurers would get three, and physicians would get three. It may be that this bill is a partial pay-off for all the money the that pharmaceutical industry has given Democrats since the ’06 elections.


One fundamental difference is the legal system. In the U.K, I believe there is a legally protected duty for providers to take cost into consideration when making treatment decisions. In the U.S., there is an ethical and legal obligation for physicians to provide all beneficial care regardless of cost. There is no ethical or legal framework that allows withholding treatment based on cost-effectiveness. Try doing that and you will have a lawyer on the phone in about ten minutes. Patients and their families understand this and can easily pressure physicians into ordering tests or providing treatment of marginal benefit. The… Read more »


Barry, of course I agree. But I don’t think many people need to scream too loudly in this system, unless you are uninsured. Hospitals have to account to no one, save their sharholders, when deciding to get those billings up. Public hospitals may have to take the same approach to help pay for all the free work they’re required to do. Sad but true, and I don’t see an end to it soon.

Barry Carol
Barry Carol

I like the QALY concept very much notwithstanding the limitations that MG identified. I think cost-effectiveness as well as comparative effectiveness needs to play a much more significant role in healthcare payment policy going forward if we are to ever bring medical cost growth under control. The plain fact is that resources are finite and we can’t afford to make believe everyone can have everything. One thing I especially like about not being able to give certain treatments in end of life situations because they do not meet the QALY threshold and won’t be paid for is that family members… Read more »


But the proof in the pudding is coming up with the QALY. Yeah there are other things that come into the decision to approval/deny something at NICE (as Matthew points about with the approval of Gleevac), but it is still fundamentally an economic one even if it is entirely open and guided by clinician’s input. You can get some radically different numbers on QALYs by doing even some moderate simply things including playing around with the discount rate, shortening or lengthening the number of years for the calculation, or changing the parameters of the population size. Plus, you also need… Read more »


Brad, there is a huge stick involved in so far as the PCP’s can choose to write prescriptions for almost anything they choose but the patient will never be able to find a pharmacist that would fill it. The pharmacists get paid through the primary care trusts who have a dual role; one part of which is to commission services from providers on behalf of their local population (usually in the region of 500k people), the second part of their work is the provider services arm which provides district RN’s, mid-wives and childrens hospital at home as well as wide… Read more »

Maggie Mahar

Very interesting I also heard a talk from a NICE official at a conference in the Spring and was impressed. In addition, I interviewed an economist from the London School of Economics at the same conference and he confimrmed widespread public support for NICE. People generally like the idea of their medicine being based on scientific evidence. Then again, as Matthew implies, the British are a sensible people. One point I’d emphasize on compliance: the NIH only pays for products and services that NICE recommends in its guidelines for patients who meet particular profiles. Doctors are not forced to follow… Read more »