Abstract
Every society recognizes that resources for health care are limited; if not money then staff time is limited, and decisions have to be made about the allocation of these resources.
Resource allocation decisions take place at different levels. For example, deciding nationally how much should be spent on research or education, deciding how resources should be distributed on different patient groups and, within health services for a specific patient group, those who manage, many of whom are clinicians, constantly have to make decisions about the allocation of financial and temporal resources. What help is health services research giving to those who are struggling with these problems? Not much.
It is true that there has been a great increase in the amount of cost-benefit analysis, cost-effectiveness analysis and cost-utility analysis in the last decade and important advances have been made in methodology. But how useful are these to the harassed decision-maker? A simple conclusion of economic evaluations carried out in these ways is that health care interventions can be classified into three groups. First, there are those interventions that are ridiculously expensive for the benefit gained and therefore relatively easy to resist. Second, there are those that are inexpensive yet still beneficial, such as clinicians giving advice on smoking cessation as part of a consultation, that are, to use a technical term, ‘no-brainers’. But many interventions fall into the third group – potentially beneficial but at a significant cost. While high quality economic evaluations form a type of screening test, a large number of the interventions evaluated pass through the screening test and still present a challenge to decision-makers.
The problem for the person making decisions about the allocation of resources is that they are rarely sitting with a bag of money into which they can dip to fund new interventions. They are usually faced with a multitude of decisions and are in the position of managing a mess – a mess being a situation in which there is no ideal solution in which every solution creates further problems.
One approach that can be adopted to help people in this situation is programme budgeting. An excellent example can be seen on the English Department of Health's Programme Budgeting Unit website. 1 In addition, an Annual Population Value Review has been produced 2 which is a review of all the programme budgets, so that each purchasing organization can see what it spends on a particular disease category compared to another purchaser dealing with a similar population. As a result, we know, for example, that £847 million is spent on asthma (±£50 m) but we really do not know if we are getting maximum value from this.
Imagine that a new drug comes along for the management of asthma. The key question is not the cost per quality-adjusted life year of that drug, although that is obviously important information. Instead the question to ask is, will this new drug give more value to people with asthma than some of the existing services provided for that group of patients. While purchasers may seek to optimal allocative efficiency as a marker of value, for the patient value is derived from both the outcome of care and the way in which it is delivered. When deciding whether to fund our new drug from the existing budget, it is therefore also important to know not only what alternative services could, or do, achieve with the same amount of money (opportunity costs) but specifically the value of those services to local patients (which we refer to as opportunity value). 3 (This use of the term is distinct to that used by some ethicists, to refer to the opportunities afforded by, for example, freedom of speech.) For example, the opportunity costs may be that a community asthma nurse could no longer be funded and the opportunity value of the popular nurse-led service increases their social exposure and reduces morbidity. This extra value would be lost if the new drug were funded instead, even if the new treatment was deemed ‘cost-effective’.
The second question the decision-maker would want to ask is, should some money be moved from another budget for respiratory disease, such as chronic obstructive pulmonary disease, or perhaps from the budget of a more distant patient group such as musculoskeletal disease, cancer or mental health. Again the opportunity value would need to be worked out, to complement cost information available through programme budgeting.
Hamlet's father-in-law complained bitterly that troubles came in whole battalions and not as single spies. For the decision-maker, whole battalions are actually easier to deal with than single spies, and programme budgeting, when properly applied means that we are forced to face up to the fact that although a new intervention suddenly pops up, there may be five or 10 other services for the same group of patients that could have extra resources invested with added value.
The decision-maker has to strive for what both Archie Cochrane and Avedis Donabedian called ‘optimality’ – the best balance of resources. To do this, information about cost-effectiveness as currently expressed is necessary but not sufficient. Purchasers need to know about opportunity costs and opportunity values, and researchers need to start expressing costs and values in different terms.