The first independent analysis of the Department of Health’s programme budgeting data across 303 Primary Care Trusts (PCTs) shows unambiguously that extra spending can give rise to distinctly better health outcomes. The Health Foundation, which published the report, believes that this provides powerful evidence that expenditure on the NHS can provide good value for money if targetted in the right way.
Professor Peter Smith from the University of York led a team of researchers as part of The Health Foundation’s QQUIP (Quest for Quality and Improved Performance) research initiative to model the link between spending and health outcomes in two of the largest programmes of healthcare: circulatory disease and cancer. The report, entitled The link between healthcare spending and health outcomes: evidence from English programme budgeting data, shows unequivocally that increased spending on healthcare leads to better outcomes for patients in these two major areas.
“Using the programme budgeting data, we have shown that spending more on healthcare can lead to better patient outcomes once you take the relative need of populations into consideration," Professor Peter Smith said. "This has profound implications for the Treasury in how it decides to allocate future budgets across all public services. The report shows that – in these two big programmes of care – spending on healthcare may be a more cost-effective approach to saving lives than many commentators believe.”
Using data for the financial year 2004/05, the team estimated how much money would be needed to save a year of life in each disease category. For a PCT with average needs and expenditure, the report shows that the marginal cost of a quality-adjusted life year (QALY) saved is approximately £12,000 for circulatory disease and £19,000 for cancer. These figures compare favourably with the figure of £30,000 per QALY commonly attributed to the National Institute for Health and Clinical Excellence (NICE) as a basis for deciding whether or not to recommend adoption of a new technology.
“The £30,000 threshold has been a reasonable figure for NICE to use, bearing in mind the paucity of evidence available up to now," Peter Smith continued. "However, having analysed programme budgeting data across cancer and circulatory disease, we now know that it is possible to deliver highly effective care in these programmes for closer to £20,000 per QALY. Therefore, there is a risk that the existing NICE threshold may be too high, and that some of the new treatments recommended by NICE may be squeezing out more cost-effective tried and tested treatments. We would therefore recommend that NICE carries out a thorough review of the threshold level it employs.”
Stephen Thornton, Chief Executive of The Health Foundation, added: “This seminal piece of research will help the Treasury, the Department of Health and PCT commissioners to make informed choices about how to spend their money wisely. With the advent of programme budgeting data, decision-makers now have robust data at their fingertips that can help them to make tough choices about how much money to spend on health care, and on which services that money should be spent.”
Peter Smith and colleagues at the University of York plan to continue their research on programme budgeting data. They are currently evaluating the link between expenditure and health outcomes in a range of other disease areas including diabetes, respiratory, gastrointestinal and neurological diseases.