How should cost-effectiveness analysis be used in health technology coverage decisions? Evidence from the National Institute for Health and Clinical Excellence approach

J Health Serv Res Policy. 2007 Apr;12(2):73-9. doi: 10.1258/135581907780279521.


Background: In the National Health Service in England and Wales, technology coverage decisions are taken by the National Institute for Health and Clinical Excellence (NICE). The intention formally to apply cost-effectiveness analysis to the decision-making process distinguishes NICE from most other bodies making similar policy recommendations. We carried out a case study of the NICE Appraisals Committee to explore the influence and use of economic evaluation in the decision-making process.

Methods: Qualitative case study methodology. This involved analysis of all relevant secondary sources, observations of Appraisals Committee deliberations and interviews with a cross-section of Committee members.

Findings: Economic evaluation is integrated into the Committee's work. There are two main ways in which the use of economic analysis is understood by Committee members: an ordinal approach, whereby cost-effectiveness is only considered if the technology has passed a clinical effectiveness hurdle; and a framework approach, whereby the economic evaluation and model provide a structure for considering the decision problem and the evidence. These two approaches appear to operate simultaneously but are, in essence, inconsistent.

Conclusions: The NICE 'experiment' has seen cost-effectiveness analysis move to the centre-ground of UK national policy deliberations regarding technology coverage. However, our case study implies that there may be room for further refinement of the appraisal process in order to resolve the observed tension between two different ways of incorporating cost-effectiveness analysis in NICE's decision-making.

Publication types

  • Research Support, Non-U.S. Gov't

MeSH terms

  • Academies and Institutes / organization & administration*
  • Advisory Committees / organization & administration*
  • Cost-Benefit Analysis*
  • Decision Making, Organizational*
  • England
  • Health Policy
  • Humans
  • Interviews as Topic
  • Observation
  • Organizational Case Studies
  • Qualitative Research
  • Resource Allocation
  • State Medicine / economics
  • State Medicine / organization & administration*
  • Technology Assessment, Biomedical / economics*
  • Technology Assessment, Biomedical / methods
  • Wales