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The relevance of including future healthcare costs in cost-effectiveness threshold calculations for the UK NHS

Megan Perry-duxbury, James Lomas, Miqdad Asaria () and Pieter Van Baal

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Background and Objective The supply-side threshold for the UK National Health Service has been empirically estimated as the marginal returns to healthcare spending on health outcomes. These estimates implicitly exclude future healthcare costs, which is inconsistent with the objective of making the most efficient use of healthcare resources. This paper illustrates how empirical estimates of the threshold within healthcare can be adjusted to account for future healthcare costs. Methods Using cause-deleted life tables and previous work on future costs in England and Wales, we illustrate how such estimates can be adjusted. Results While the effect of including future healthcare costs can have substantial effects on incremental cost-effectiveness ratios of specific life-extending interventions, we find that including future costs has relatively little impact (an increase of £743 per quality-adjusted life-year) on the threshold estimate. Conclusions For some life-extending interventions the impact of including future costs on whether an intervention is deemed cost effective may be considerable.

JEL-codes: E6 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2022-02-01
New Economics Papers: this item is included in nep-mac
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Published in PharmacoEconomics, 1, February, 2022, 40(2), pp. 233 - 239. ISSN: 1170-7690

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Journal Article: The Relevance of Including Future Healthcare Costs in Cost-Effectiveness Threshold Calculations for the UK NHS (2022) Downloads
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