What I forgot in my previous missive was that the health-care analogue to "welfare maximizing" could be "maximization of the sum of QALYs to be had from a given budget for health care." Even that proposition is controversial, as Jeff Richardson of Monash University has argued persuasively.

In principle CEA should not abstract from "opportunity costs," because they are ideally to be reflected in the "C" of CEA.

In practice, of course, it is difficult to reflect properly the opportunity cost of collectively, tax-financed health care. These opportunity costs are neglected human-capital formation (education), neglected infrastructure etc.


-----Original Message-----
From: Anglo-American Health Policy Network [mailto:[log in to unmask]] On Behalf Of Michael Gusmano
Sent: Friday, August 31, 2012 1:57 PM
To: [log in to unmask]
Subject: Re: Score cards for take-up of Nice approvals

I think this is an important point, but I'm not sure I would attribute it to a lack of theoretical knowledge on the part of economists (as a non-economist, I'd just get people mad at me by making that suggestion anyway). Instead, this reminds me of the advice we received many years ago from my friend and mentor Clarence Stone. In his wonderful book on the politics of Atlanta, Clarence argued that "the answers we get depend on the questions we ask." It does seem a bit ironic that people conducting economic evaluations of health care interventions seem to ignore the concept of opportunity cost. Scholars who start with and focus exclusively on the question, "which technology maximizes health?" are never going to address Adam's concern -- and its one we ought to address.

-----Original Message-----
From: Anglo-American Health Policy Network [mailto:[log in to unmask]] On Behalf Of Oliver,AJ
Sent: Friday, August 31, 2012 1:34 PM
To: [log in to unmask]
Subject: Re: Score cards for take-up of Nice approvals

Related to this, and something I've gone on about to the point of boring myself (so why should I spare anyone else?) is the implicit assumption that the appropriate objective of a health care system (as opposed to a health care treatment) is the maximisation of health, and that CEA is the appropriate tool to meet that objective. The first clause is clearly nonsense, and the second clause is more opaque nonsense. And we have hundreds of 'experts' populating international conferences, spending money that could be better spent elsewhere, going on about the economics of this, and the economics of that, when, in fact, the extent of their knowledge of economic theory could be written on the back of a postage stamp. It's all too much like the emperor's new clothes.



On 28 Aug 2012, at 21:44, "Tom Foubister" <[log in to unmask]> wrote:

> Valerie
>
> PCTs do not receive additional funding for compulsory take up of Nice recommendations (I can't remember if they did at the very beginning, they may have done, not sure, but not over time) - hence the reduction in, or elimination of, coverage for some existing covered services as PCTs attempted to make room for Nice approvals. On May's point below - certainly, Nice recommendations had to be funded by the NHS, but funding had to come from existing budgets. However, much of the history of this was taking place at a time of growing funding for the NHS overall, so arguably yes, Nice coverage and spending increases were related, but indirectly.
>
> Hospitals do receive payment from different PCTs. But all PCTs (or what they're changing into) pay the same centrally-set tariff for the same service (a DRG-type payment).
>
> So re what happens when two or more purchasers dealing with one hospital have different coverage policies: someone please say if this is mistaken, but if a purchaser does not cover a service for which a tariff exists, it will not purchase the care designated by that tariff (though I don't think this is a situation that arises, but it may be); and if a purchaser covers something for which a tariff does not exist, it will have to pay the difference. Assuming of course that the hospital has the capacity (eg supplies in stock...) to provide. That is the picture in principle - what specifically happens in practice, which often differs from what happens in principle, I don't know.
>
> Despite what Rudolf writes below, I find it difficult to understand the focus of the DH here on hospitals, as this coverage variation issue (and postcode lottery), in so far as it is an inpatient care question, largely comes down to decisions made by purchasers (excepting Nice's recommendations around practice guidelines etc, and excepting services for which hospitals receive funding direct from the DH rather than PCTs).
>
> Unless hospitals are expected to incorporate higher cost new technologies into tariffs which are based on prior less expensive technologies, which I don't think they are.
>
> Tom
> -----Original Message-----
> From:         May Tsung-Mei Cheng <[log in to unmask]>
> Sender:       Anglo-American Health Policy Network <[log in to unmask]>
> Date:         Tue, 28 Aug 2012 19:34:27
> To: <[log in to unmask]>
> Reply-To:     May Tsung-Mei Cheng <[log in to unmask]>
> Subject: Re: Score cards for take-up of Nice approvals
>
> Scoring hospitals may be an effective way to reduce the wide geographic variations that has long been observed in the uptake of NICE recommendations by hospitals including the use of cancer drugs. As to who pays, my understanding is that the NHS must fund all NICE recommendations. So NICE recommendations sometimes lead to an increase in NHS spending.
>
> May
>
> -----Original Message-----
> From: Anglo-American Health Policy Network
> [mailto:[log in to unmask]] On Behalf Of Rudolf Klein
> Sent: Tuesday, August 28, 2012 2:58 PM
> To: [log in to unmask]
> Subject: Re: Score cards for take-up of Nice approvals
>
> Jp-
>
> Not really. There are appeal procedures and GPs would have to give good reason for ignoring NICE recommendations.
>
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