The systematic evaluation of costs and benefits of health technologies by the National Institute for Health and Clinical Excellence is one of the success stories of the NHS over the past 10 years.



Yet much of what the NHS does and spends a lot of money on - such as cutting waiting times or reorganisation - is not scrutinised in the same depth as, say, a new cancer drug.

That is starting to change. Increasingly, the Department of Health is trying to set out estimates of policy costs and benefits. One recent “impact assessment” looked at the new cancer reform strategy, weighing it against three other options - including carrying on as we are.

The headline result is that the total costs over 10 years - minus assumed efficiency savings - will amount to around£1.1bn, but benefits will be£16.7bn. The net benefits of the strategy -£15.6bn - exceed the next best option identified by the assessment by nearly£2bn. So, worth doing then.

Calculating policy costs and benefits is a tricky and uncertain business. But clearly something has to be done about the way the NHS delivers cancer services; the latest EUROCARE-4 study comparing cancer survival rates across Europe shows England does less well than expected given its cancer spending. So the main aim of the strategy is to push England’s survival rates up to the level of the current best in Europe.

Achieving this will mean the strategy generates around 736,000 quality-adjusted life years over the next 10 years. To put a monetary value on this benefit, the assessment assumes each QALY is “worth”£38,000 (interestingly, somewhat higher than NICE’s upper cut-off of£30,000) - but then reduces the total value by 40 per cent on the assumption that not all the extra years of life will be of the best quality. Adding up the QALY values and after a bit of fiddling around to get a present discounted value for future benefits, out pops the figure of£16.7bn. The bulk of this benefit - 40 per cent - from raising radiotherapy capacity and cutting waiting times.

On the other side of the equation, total discounted costs are nearly£4.3bn. But crucially, it is assumed there will be efficiency savings of over£3.6bn, which, together with capital costs of£446m, leaves a net cost of just£1.1bn.

There will be no randomised control trial of the strategy and no associated economic evaluation; whether the costs and benefits turn out as predicted remains to be seen. What is needed - as with NICE assessments - is regular evaluation of the actual costs and benefits every few years to confirm the strategy is on course.