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cost effectiveness

EBM-the best way to cut the cost?

Ami Banerjee
Last edited 11th June 2010

Across government, but particularly across the NHS, a fear of impending cost-cutting is dominating both news and journals. The NHS Confederation, which independently represents all organisations within the NHS, reckons that the health service will be facing “real-terms reduction of between £8bn and 10bn over the three years after 2011” .

The budget for the NHS in England in 2010-11 is forecast to be just under £110bn, so the predicted shortfall between rising costs (due to an ageing population and increasing cost of treatments) and the budget is substantial. The Office for Health Economics to compare what we can do with £8-10 billion for a population of 25 million: (1) provide family health or mental health services for 1 year, (2) provide cancer treatment for 2 years, (3) provide care for normal births for 27 years, or (4) provide prescriptions for 1.6 years.

As the new Chancellor, George Osborne calls for a public consultation about where cuts should be made in public services, there are already several theories of where we should save in healthcare. At a conference of the British Medical Association this week, the GP leader advised reducing the “bureaucracy tied to the NHS market, management consultants, patient surveys and management tiers. He also called the role of NHS Direct into question. I blogged about the cost of healthcare consulting a few weeks ago, quoting the £600 million that is spent annually on consulting rather than on treating patients. Using the above Office of Health Economics data, we see that this money could have paid for family health or mental health for 1 month or for normal baby deliveries for 2 years. As a practising doctor, I can say that this kind of comparative cost data about treatments is hard to come by, so it must be even harder for patients and the general public to find out where their money is being spent. This situation is the same across other government departments. If George Osborne wants a proper engagement with the public, this kind of data is needed.

This week’s BMJ editorials include two salutary examples of where money is being wasted in the current NHS. Firstly the case of swine flu and the massive stockpiles of Tamiflu and vaccines, which have made drug companies US$7-10 billion cannot show more clearly what happens when evidence is not part of health policy. Add to that the issue of conflict of interest and the amount of money wasted (or swindled) goes up exponentially. Secondly, the idea of “risk sharing” which provided interferon to multiple sclerosis patients, despite NICE recommendations that it was an ineffective treatment. Risk sharing meant that drug companies and government work together to provide disease modifying treatments within the NHS under the conditions of a large study. “If the drugs were more effective than the NICE predictions, and so achieved cost effectiveness, then all would be well. If not, there would need to be a financial reckoning—payback from the drug industry to the Department of Health or reduced drug costs—to achieve "affordability" post hoc.” The results now show that interferon does no good, but are the drug companies keeping their side of the bargain? Of course not.

The good news is that there is one methodology that exists in order to evaluate treatments and healthcare in general. That methodology is EBM and it needs to be tied more closely with health policy if we are to have any chance of reducing the wastage in the NHS.

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