The United Kingdom's coalition government has just begun the most sweeping overhaul of the National Health Service since its inception.1 Under the reforms, 80 percent of the NHS budget will be handed over to about five hundred local consortia of primary care physicians, who will be empowered to make medical spending and allocation decisions for their patients. The 152 existing Primary Care Trusts (PCTs), which purchase hospital and community care for patients and oversee primary care physicians in their regions, will close their doors, leaving local doctors with the power to decide which interventions are appropriate, and which too expensive.2 Hospitals and community service providers will have greater freedom from government supervision and potentially greater access to private capital. Every element of the NHS is being redesigned to increase competition and decentralize decision-making.
One of those elements is the National Institute of Health and Clinical Effectiveness, or NICE. NICE serves a number of functions within the NHS; it has, for example, garnered considerable praise for improving care by developing high-quality clinical practice guidelines. But its most controversial role has been that of "rationer-in-chief."
NICE evaluates the cost-effectiveness of new medical technologies, especially drugs. Approval of a drug effectively mandates that PCTs purchase it for patients who need it. In recent years, NICE has denied approval to a small number of high-cost cancer drugs, primarily on grounds that their costs greatly exceeded NICE's threshold of £30,000 per quality-adjusted life-year saved. NICE's denials are not technically binding on PCTs, but expensive departures from NICE's recommendations are rare in the cash-strapped NHS. NICE's denials of cancer drugs have met with vehement opposition from the pharmaceutical industry, patients' rights groups, and the British press, which has cast NICE as a heartless, penny-pinching bureaucracy, willing to condemn patients to death because of money.
Readers may recall that NICE had its moment on the American political stage during the debate on the Obama health reform law. NICE was held up by conservative commentators and bloggers as an example of a real-life, socialist, bureaucratic "death panel." This characterization, supported by the hyperbolic British press coverage, led Congress to amend the health reform law. The new Patient-Centered Outcomes Research Institute, created by the law to conduct research and make nonbinding recommendations on comparative effectiveness in health care, is statutorily forbidden from considering dollars per quality-adjusted life-year.
What does NHS reform have in store for NICE? Health Secretary Andrew Lansley wants NICE to lose its power to make any mandatory recommendations. Local primary care consortia would be wholly free to make their own judgments about which licensed drugs to afford. Moreover, the reform plans contemplate a change in the way drug companies will be paid by NHS. In the future, drug companies will negotiate a price based on the value of their drugs. The exact mechanism of this "value-based" pricing scheme remains unclear, but the components of "value" seem likely to be broader than cost-effectiveness alone, and NICE's role in determining "value" is uncertain.
It's difficult to forecast the result of these changes. It may be that even nonbinding cost-effectiveness calculations will influence physician decision-makers and the consultants (many from American insurance companies) who will guide them. On the other hand, physicians' liberation from NICE may succeed only in delivering them into the hands of pharmaceutical lobbyists, who will push for greater utilization of expensive drugs. And decentralizing coverage choices will push those choices into the shadows. Local rationing will surely be less visible and less accountable, and maybe less rational. It may also be less fair, if different consortia make different choices.
NICE has been one of the few public institutions in the world frankly engaged in above-board, cost-based, health care priority-setting. Rightly or wrongly, it was making the tough calls, out in the open. Its neutering is a global loss.