BACKGROUND: Cost-effectiveness analysis involves the comparison of the incremental cost-effectiveness ratio of a new technology, which is more costly than existing alternatives, with the cost-effectiveness threshold. This indicates whether or not the health expected to be gained from its use exceeds the health expected to be lost elsewhere as other health-care activities are displaced. The threshold therefore represents the additional cost that has to be imposed on the system to forgo 1 quality-adjusted life-year (QALY) of health through displacement. There are no empirical estimates of the cost-effectiveness threshold used by the National Institute for Health and Care Excellence. OBJECTIVES: (1) To provide a conceptual framework to define the cost-effectiveness threshold and to provide the basis for its empirical estimation. (2) Using programme budgeting data for the English NHS, to estimate the relationship between changes in overall NHS expenditure and changes in mortality. (3) To extend this mortality measure of the health effects of a change in expenditure to life-years and to QALYs by estimating the quality-of-life (QoL) associated with effects on years of life and the additional direct impact on QoL itself. (4) To present the best estimate of the cost-effectiveness threshold for policy purposes. METHODS: Earlier econometric analysis estimated the relationship between differences in primary care trust (PCT) spending, across programme budget categories (PBCs), and associated disease-specific mortality. This research is extended in several ways including estimating the impact of marginal increases or decreases in overall NHS expenditure on spending in each of the 23 PBCs. Further stages of work link the econometrics to broader health effects in terms of QALYs. RESULTS: The most relevant 'central' threshold is estimated to be £12,936 per QALY (2008 expenditure, 2008-10 mortality). Uncertainty analysis indicates that the probability that the threshold is < £20,000 per QALY is 0.89 and the probability that it is < £30,000 per QALY is 0.97. Additional 'structural' uncertainty suggests, on balance, that the central or best estimate is, if anything, likely to be an overestimate. The health effects of changes in expenditure are greater when PCTs are under more financial pressure and are more likely to be disinvesting than investing. This indicates that the central estimate of the threshold is likely to be an overestimate for all technologies which impose net costs on the NHS and the appropriate threshold to apply should be lower for technologies which have a greater impact on NHS costs. LIMITATIONS: The central estimate is based on identifying a preferred analysis at each stage based on the analysis that made the best use of available information, whether or not the assumptions required appeared more reasonable than the other alternatives available, and which provided a more complete picture of the likely health effects of a change in expenditure. However, the limitation of currently available data means that there is substantial uncertainty associated with the estimate of the overall threshold. CONCLUSIONS: The methods go some way to providing an empirical estimate of the scale of opportunity costs the NHS faces when considering whether or not the health benefits associated with new technologies are greater than the health that is likely to be lost elsewhere in the NHS. Priorities for future research include estimating the threshold for subsequent waves of expenditure and outcome data, for example by utilising expenditure and outcomes available at the level of Clinical Commissioning Groups as well as additional data collected on QoL and updated estimates of incidence (by age and gender) and duration of disease. Nonetheless, the study also starts to make the other NHS patients, who ultimately bear the opportunity costs of such decisions, less abstract and more 'known' in social decisions. FUNDING: The National Institute for Health Research-Medical Research Council Methodology Research Programme.

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Methods for the estimation of the National Institute for Health and Care Excellence cost-effectiveness threshold

Health services research conducted over the past 25 years makes a compelling case that having health insurance or using more medical care would improve the health of the uninsured. The literature's broad range of conditions, populations, and methods makes it difficult to derive a precise quantitative estimate of the effect of having health insurance on the uninsured's health. Some mortality studies imply that a 4% to 5% reduction in the uninsured's mortality is a lower bound; other studies suggest that the reductions could be as high as 20% to 25%. Although all of the studies reviewed suffer from methodological flaws of varying degrees, there is substantial qualitative consistency across studies of different medical conditions conducted at different times and using different data sets and statistical methods. Corroborating process studies find that the uninsured receive fewer preventive and diagnostic services, tend to be more severely ill when diagnosed, and receive less therapeutic care. Other literature suggests that improving health status from fair or poor to very good or excellent would increase both work effort and annual earnings by approximately 15% to 20%.

Sicker and poorer--the consequences of being uninsured: a review of the research on the relationship between health insurance, medical care use, health, work, and income.

Does health care save lives? Commentators such as McKeown and Illich, writing in the 1960s, argued that it played very little part, and might even be harmful However they were writing about a period when health care had relatively little to offer compared to today Since then, several writers have described often quite substantial improvements in death rates from conditions for which effective interventions have been introduced But the debate continues, with some arguing that health care is making an increasingly important impact on overall levels of health while others contend that it is in the realm of broader policies, such as education, transport and housing, that we should look to for future advances in health Inevitably this is to a considerable extent a false dichotomy Both are important But how much does health care contribute to population health?

One way in which this question has been addressed previously is to look at deaths that should not occur in the presence of effective and timely health care, so-called ‘avoidable’ mortality However much of this work was undertaken in the 1980s and early 1990s, since when health care has advanced considerably In addition, ‘avoidable’ deaths were often limited to those before, for example, the age of 65, a figure that seems inappropriately low in the light of life expectancies that are now about 80 in many countries 

In this review we have traced the evolution of the concept of ‘avoidable’ mortality from its inception in the 1970s We have undertaken a detailed methodological critique of this concept, examining questions of attribution, issues relating to comparisons over time and place, and relationships with other indicators of health service provision To help future researchers we have produced a comprehensive, annotated review of the work that has been undertaken worldwide so far 

We note that ‘avoidable’ mortality was never intended to be more than an indicator of potential weaknesses in health care that can then be investigated in more depth We describe examples of where this approach has been successful, drawing attention to problems that might otherwise have been missed 

In contrast, many of the critics of ‘avoidable’ mortality, or more specifically, mortality amenable to health care (amenable mortality), have asked that it do something it was not intended to do, to be a definitive source of evidence of differences in effectiveness of health care Thus, it is not unexpected that studies seeking to link amenable mortality with health care resources have failed to do so, especially when undertaken within countries, although it is notable that where gross differences exist, as between western and eastern Europe, the gap in amenable mortality is especially high For these reasons, it seems justifiable to continue and extend the extensive body of research that has already been undertaken to look at ‘avoidable’ mortality, updating the list of conditions included to reflect the changing scope of health care and extending the age limit to reflect increasing expectation of life However it must be recognised that the concept of ‘avoidable’ mortality does have important limitations, relating to comparability of data, attribution of causes, and coverage of the range of health outcomes 

Comparisons of health system performance are now firmly on the international policy agenda, especially since the publication of the 2000 World Health Report Incorporation of concept of mortality amenable to medical care into the methodology used to generate the rankings of health systems in that report would be an advance on the current situation We show how, within Europe, this would lead to different rankings from those based on overall disability adjusted life expectancy, which is used in the current rankings 

However, any approach based on aggregate data would not address one of the major criticisms of such comparisons, that they do not indicate what needs to be done when faced with evidence of sub-optimal performance This requires a more detailed analysis of the specific issues facing health systems Here we propose a new method, in which analyses of amenable mortality identify areas of potential concern that are then examined in more detail by studying the processes and outcomes of care for tracer conditions, selected on the basis of their ability to assess a wide range of health system components 
The second part of the review applies the refined method of amenable mortality analysis to patterns of mortality in the countries of the European Union over the past two decades This shows that deaths that could be prevented by timely and effective care were still relatively common in many countries in 1980 Reductions in these deaths contributed substantially to the overall change in life expectancy between birth and age 75 during the 1980s The largest contribution was from falling infant mortality but in some countries reductions in deaths among the middle aged was equally or even more important These countries were Denmark, The Netherlands, the United Kingdom, France (for men) and Sweden (for women) 

In contrast, during the 1990s, reductions in amenable mortality made a somewhat smaller contribution to improved life expectancy, especially in the northern European countries However they remained important in southern Europe, especially in Portugal and Greece, where the initial death rates had been higher 
These findings provide clear evidence that improvements in access to effective health care have had a measurable impact in many countries during the 1980s and 1990s, in particular through reductions in infant mortality and in deaths among the middle aged and elderly, especially women However the scale of impact has, to a considerable extent, reflected the starting point Thus, those countries where infant mortality was relatively high at the beginning of the 1980s, and which had the greatest scope for improvement, such as Greece and Portugal, unsurprisingly saw the greatest reductions in amenable mortality in infancy In contrast, in countries with infant mortality rates that had already reached very low rates by the beginning of the 1990s, such as Sweden, the scope for further improvement was small

Similarly, the scope for improvement in amenable deaths in adulthood was greatest in those countries where initial rates were highest The corollary of this is that as rates fall in all countries, the extent of variation decreases As a consequence, it seems likely that, in the 21st century, the ability to compare health system performance using mortality data at the aggregate level is likely to be limited, simply because the differences will be relatively small This does not, however, mean that there is not scope for analyses that use amenable mortality rates to screen for potential problems that can then be explored in more depth It also does not exclude the use of amenable mortality to gain new insights into inequalities in access to care within populations

Does Health Care Save Lives? Avoidable Mortality Revisited

The relationship between health care expenditure and health outcomes is of interest to policy makers in the light of steady increases in health care spending for most industrialised countries. However, establishing causal relationships is complex because, firstly, health care expenditure is only one of many quantitative and qualitative factors that contribute to health outcomes, and, secondly, measurement of health status is an imperfect process. This study reviews key findings and methodological approaches in this field and reports the results of our own empirical study of countries of the European Union. Our analysis examines life expectancy and infant mortality as the ‘output’ of the health care system, and various life-style, environmental and occupational factors as ‘inputs’. Econometric analyses using a fixed effects model are conducted on a panel data set for the former 15 members of the European Union over the period 1980–1995. The findings show that increases in health care expenditure are significantly associated with large improvements in infant mortality but only marginally in relation to life expectancy. The findings are generally consistent with those of several previous studies. Caveats and improvements for future research are presented.

The relationship between health care expenditure and health outcomes. Evidence and caveats for a causal link.

This paper provides econometric evidence linking African countries’ per capita total as well as government health expenditures and per capita income to two health outcomes: infant mortality and under-five mortality. This relationship is examined using data from 47 African countries between 1999 and 2004. Health expenditures have a statistically significant negative effect on infant and under-five mortality rates. The magnitude of our elasticity estimates are in consonance to those reported in the literature. For African countries, our results imply that total health expenditures (as well as the public component) are certainly important contributors to health outcomes. In addition, we find that both infant and under-five mortality are positively and significantly associated with sub-Saharan Africa. The reverse is true for North Africa. While ethnolinguistic fractionalization and HIV prevalence positively and significantly affect the health outcomes, higher numbers of physicians and female literacy significantly reduce these health outcomes. These results have important implications for attaining the targets envisioned by the Millennium Development Goals. The data implications are also discussed.

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Health Expenditures and Health Outcomes in Africa

This paper revisits the relationship between health care spending and health outcomes. While previous researchers found it difficult to establish such a relationship based on international comparisons, the results based on rather homogenous province-specific Canadian data show that lower health care spending is associated with a statistically significant increase in infant mortality and a decrease in life expectancy in Canada. This relationship is independent of various economic, socio-demographic, nutritional and lifestyle factors, as well as provincial specificity or time trend. It is based on annual data collected from the ten Canadian provinces over 15 years.

Caroline Pilon

Papers

Health care spending as determinants of health outcomes.