Back to the threshold

What is the most a nation should pay for a year of healthy life?

In England, NICE pays £20,000–£30,000 for a healthy year of life – this is not far off the nominal $50,000 evoked by many commentators in the USA. In a recent article,[1] Neumann and colleagues ask whether this is the correct level, especially as it has not changed in two decades, despite inflation and economic growth.

When I directed the Methodology Research Programme in the NHS R&D programme, forerunner of the NIHR, we commissioned a number of research projects to try and find the optional threshold where the value provided per pound by the new technology is exceeded by the value of the services it displaces. Since nobody knows what these displaced services are, let alone their value, the threshold price is enigmatic.

The authors cite evidence from studies showing that Americans are prepared to ‘trade-up’ and would pay more than £50,000 for a healthy life year. The World Bank, for reasons that I have never fully understood, recommends a threshold of three times per capita GDP, which would suggest that both the U.S. and English thresholds are on the low side.

I think the only way to approach the problem is to accept the challenge of finding out what services really are substituted by that gleaming new machine. Granted, what is displaced will vary from place to place. Granted, it will be hard to discern what is displaced because this is implicit not explicit. But detailed observations of decision makers at work could provide evidence of the types of service that are typically rationed in a cost-limited service. I hypothesise that rationing is by “dilution”. That is to say, a nurse is not appointed to ward D17 and there is delay (“slippage”) with the appointment for a new rehabilitation consultant.

The real consequences of setting the threshold too high will be patients waiting longer for their pain relief, less rigorous checks on vital signs, and less comforting words spoken when bad news must be broken. These were the type of opportunity cost I kept in my mind when serving on the NICE appraisal committee.

— Richard Lilford, CLAHRC WM Director


  1. Neumann PJ, Cohen JT, Weinstein MC. Updating cost-effectiveness–the curious resilience of the $50,000-per-QALY threshold. N Eng J Med. 2014;371(9):796-7.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s