Objective: To estimate the average cost per quality adjusted life year (QALY) gained from hip surgery, and to examine the variation in that between hospitals.
Design: The transformation of patient-reported outcome measures (EQ-5D data) into QALYs, covering 25,463 NHS patient episodes between April 2009 and August 2010 from hospitals in England, using a model of future health change arising from a hip operation compared to a counterfactual of no operation. Hospital-level costs for hip procedures from the National Reference Costs data-set was used to calculate the hospitals' cost per QALY.
Setting: English hospitals treating NHS-funded patients undergoing hip replacement.
Participants: NHS-funded patients undergoing primary hip replacement.
Main outcome measure: Cost per QALY.
Results: Assuming some degradation in patients' health over the lifetime of the hip prosthesis, average health gain arising from a hip operation was 2.77 QALYs. For procedures paid for by the NHS but carried out in the independent sector the average gain was 2.97 QALYs. Average NHS hospital hip procedure costs were estimated to be £5844. The unweighted average cost per QALY for NHS hospitals was £2128. There were significant variations in cost per QALY between hospitals; most of this variation appears to be driven by variations in cost, not QALYs.
Conclusions: Using the new patient-assessed health-related quality of life data combined with routine hospital-level cost data it is possible to estimate a procedure-based measure of efficiency for hospitals. The fact that variations in cost per QALY are strongly driven by variations in cost suggests that further work is needed to investigate the causes of cost variations per se--especially the quality of routine NHS cost data.
Keywords: cost effectiveness; cost per QALY; health economics; hip replacement; orthopaedics; patient reported outcome measures (PROMs).