Select Committee on Health Appendices to the Minutes of Evidence


Memorandum by Ealing, Hammersmith & Hounslow Health Authority (NC 35)


  1.1.1  The Health Select Committee has requested submissions from four Health Authorities (HAs) to assist its Inquiry into the National Institute for Clinical Excellence (NICE). This document is the submission from Ealing Hammersmith & Hounslow Health Authority. The principal author is Dr Michael Soljak, Director of Public Health & Health Strategy. Although the comments of some Health Authority and other local NHS staff have been incorporated, the short notice of the request for evidence has prevented its being approved formally by the Authority itself.

  1.1.2  At this stage oral evidence could be provided to the inquiry but it has not been requested.

  1.1.3  The submission is in three parts:

    —  comment on the current functioning of NICE with respect to health topics and interventions it has reviewed or supported[3];

    —  comment on health topics and interventions which have been accepted as part of NICE's work programme but have not yet been completed; and

    —  comment on health topics and interventions which are not currently part of NICE's work programme.

  1.1.4  The Health Authority has had considerable experience in priority setting and technology appraisal prior to the establishment of NICE. As the host purchaser for Hammersmith Hospitals Trust, it has developed a close working relationship with Trust clinicians who are at the forefront of research and development on new health care interventions. As a large London Health Authority with a diverse population, it has also needed to review in depth the health care needs of this population and the current services provided to them.


2.1  Current National Policy

  2.1.1  The Government stated in A First Class Service that local variations in resource allocation ("postcode rationing") are undesirable in a single NHS, and it announced the establishment of the National Institute for Clinical Effectiveness (NICE) to issue national guidance on health care technologies. Subsequent NICE guidance has to some extent supplanted the previous ad hoc methods of funding new technologies, such as the direction issued in 1995 in the form of a Health Service Circular (HSC), that HAs should consider funding beta interferon for multiple sclerosis.

  2.1.2  Previous legal advice was that NICE guidance is guidance, and is not a direction by the Department of Health. This advice was based on HAs' responsibility, as defined in the National Health Service Act 1977 and other legislation, to allocate NHS resources for their populations[4],[5]. A Health Authority which determined not to fund beta interferon for multiple sclerosis lost a judicial review not because it had failed to follow the advice or direction in the relevant HSC, but because it had failed to consider it adequately[6].

  2.1.3  Some Health Authorities have not fully funded NICE guidance in 2001-02. However on 5 December 2001 Lord Hunt announced on behalf of the Government that directions would be issued to place an obligation on HAs and PCTs to provide appropriate funding within three months for treatments recommended in NICE's Technology Appraisal Guidance (TAGs). These generic directions have taken effect from 1 January 2002.

  2.1.4  Local trusts have asked for clarification of the situation where local expert opinion is at variance with the TAG. Unfortunately there is as yet no legal determination of the status of NICE guidance with respect to individual clinicians, and whether it will supplant the Bolam test for medical negligence.

2.2  Characteristics of a Good Priority-Setting Policy

  2.2.1  A list "desirable" characteristics of a fair and equitable priority setting policy has been proposed[7]. These characteristics or conditions are:

    —  relevance condition: the rationale rests on evidence, reasons and principles that the various stakeholders can agree are relevant to deciding how to meet the diverse needs of a covered population and the necessary resource constraints;

    —  publicity condition: decisions regarding coverage for new technologies and their rationale must be publicly accessible;

    —  appeals condition: there is a mechanism for challenge and dispute resolution regarding decisions, including the opportunity for revising decisions in the light of further evidence or arguments;

    —  enforcement condition: there is either of voluntary or public regulation of the process to ensure that the first three conditions are met.

  2.2.2  The discussion of the process used by NICE so far in reviewing or supporting health topics and interventions is based on a consideration of these conditions.


  3.1.1  At the outset should be noted that the wide variations and funding and implementation of health interventions and technologies outlined above was widely recognised as a problem prior to the establishment of NICE. This Health Authority welcomed the establishment of NICE, and considers that there has been a substantial improvement, led by NICE, in the way in which technologies are assessed.

  3.1.2  The relevance condition has to a large extent been met by NICE's current process. NICE considers both evidence of clinical effectiveness and cost effectiveness/utility. However the current technology appraisal process takes insufficient explicit account of other values which may underpin priority setting in the NHS.

  3.1.3  For example, the "right of rescue" in the case of life-threatening or severely disabling illnesses is a philosophical principle which has been widely discussed in terms of health care provision, and has greatly influenced resource allocation in the past. Hence the NHS has made considerable investment in life-saving services for established cancer and coronary heart disease, but a relatively small investment in smoking cessation services, which may have prevented these diseases in many cases. The general public clearly gives considerable weight to the right of rescue. At present NICE's process takes no explicit account of the severity of a condition and whether it is life-threatening, although it could be argued that ring-fenced funding for such conditions through National Service Frameworks (NSFs) implicitly recognises this right (see section 5).

  3.1.4  Another factor is the relative difficulty in accumulating evidence of (cost) effectiveness for interventions for rare or even uncommon conditions. Sufferers from rare conditions may be disadvantaged by the emphasis given in the TAG process to the strength of evidence. Other values are mentioned later in this evidence.

  3.1.5  The 2001 Guide to the Technology Appraisal Process says very little about how the Appraisal Committee should come to its decision. Issues such as these could be given more prominence by making the process of weighing the strength of evidence, relative (cost) effectiveness, and other factors, more explicit. Ealing Hammersmith & Hounslow Health Authority's Priority-Setting Subcommittee uses a matrix originally developed in the Southwest NHS Region which specifically trades off the strength of evidence against cost effectiveness and some related philosophical values (see Annex 1). The matrix is not used mechanically as a decision-making tool, but provides a framework for reasoned discussion.

  3.1.6  It should also be noted that the use of cost utility data ie cost per quality-adjusted life year (QALY) as currently employed by NICE is based on an assumption that a technology has the same benefit for all patients, when clearly this is not the case. A consequence is that some TAGs state that interventions should either be funded for all patients or no patients. In some cases where NICE has issued TAG not to fund a technology, negotiations have been commenced by the Department of Health to put in place "risk-sharing" arrangements to fund those patients who show benefit and not those who do not. There is a need to acknowledge this issue in the process of developing TAG.

  3.1.7  There is also concern amongst clinicians and patient groups about the methods used for the valuation of quality of life in QALY development. There is a need for more discussion at the national level about improvements in this methodology to ensure that it does not unfairly discriminate against disabled or older people.

  3.1.8  In the longer term, TAG could be developed within a population model which took account of variations in response to the impact of health technologies. As better information about prevalence and actual outcomes was added to the model, it would feed back into clearer predictions for clinicians and individual patients about the likely outcomes of care. This model would also support the more accurate costing of NICE guidance.

  3.1.9  The national Cardiac Surgery Register already provides this form of feedback using Bayesian statistical techniques. The development of more sophisticated computer technology such as neural networks could provide further support. This would entail better linkage between the TAG and relevant data collection than currently occurs, and the adoption of a common currency for health outcomes.

  3.1.10  Moreover, one national size does not fit all. Local populations, and their health care needs, differ significantly. Some HAs have used the World Bank disability-adjusted life years (DALY) model as a default source of data on disability and changes in it as a result of health care interventions. But the NHS has the capacity to develop a model of health care and the cost and outcome data to populate it so that each health community can demonstrate that it is responding to local needs effectively. Local trusts have expressed concern that commitments to funding NICE TAG can distort local priorities. A population model which allowed local priorities to be quantified and costed alongside NICE TAG would help to highlight genuine funding issues.

  3.1.11  The publicity condition has been met to a significant extent by NICE with regard to its own work programme. There are public meetings of the NICE Board, and the appraisal process guidance and decisions regarding NICE's work programme are publicly accessible through its website and publications. It carried out a consultation to enhance this process during 2000, it has a Partners Council, and is establishing a public forum. The issue of closer Ministerial involvement in public discussion of the wider aspects of priority-setting has been highlighted below.

  3.1.12  The appeals condition has been thoroughly addressed by NICE with regard to the technology appraisal process. There is a clear mechanism for challenge and dispute resolution of TAP decisions, including the opportunity for revising decisions in the light of further evidence or arguments.

  3.1.13  However it is unclear how individual patients could appeal against NICE guidance. Presumably such appeals would take place at the local level, but there is no guidance as to how such appeals should be heard. In Ealing Hammersmith & Hounslow Health Authority, anonymised individual appeals are heard in the private Part II deliberations of the Priority-Setting Subcommittee. It is clear that in future such appeals should initially be dealt with by PCTs. Again a model of good practice whose principles were shared both by NICE and the local NHS would be very helpful.

  3.1.14  The enforcement condition has to a large extent been met by issuing TAG as a direction rather than guidance. The regulation of NICE guidance should be an explicit responsibility of the Commission for Health Improvement. However, as noted above, there is no mechanism for dealing with technologies which have not yet been considered by NICE or which are not on its work programme (see below).


  4.1.1  Despite the creation of NICE and these new directions, a need to assess technologies and set priorities locally has remained because of the inherent delays in the NICE appraisal process. As mentioned above, judicial reviews of resource allocation generally turn upon Health Authorities' responsibility for resource allocation as defined in legislation. It would be difficult for a Health Authority to justify in law failure to consider allocating resources (as opposed to actually allocating resources) to an intervention purely because it was to be considered by NICE at sometime in the future. The legal situation was recently confirmed in a letter to Health Authorities from the Chief Operating Officer of the NHS[8].

  4.1.2  However in the current financial year, in response to a questionnaire about the funding of a new technology, a significant number of health authorities gave its appearance on NICE's work programme as the reason for not funding the intervention. This may be in part explained by the fact that the drugs concerned are for treatment of a chronic rather than a life-threatening disease. Nevertheless at the local level it is apparent that there has been no improvement in the extent (or quality) of "postcode rationing" outside the NICE TAG process.

  4.1.3  There would appear to be two solutions to this problem. The first would be to add appraisal by NICE to the licensing requirements for new drugs and perhaps to establish a formal licensing procedure for other forms of health technologies—the so-called "fourth hurdle". The second solution would be to develop guidance and a framework for rapid technology appraisals at the local level, which incorporated to some extent the good practice inherent in the NICE model (see section 3).

  4.1.4  As it is unlikely that any PCT would be sufficiently well-resourced to undertake even a rapid appraisal alone, such appraisals would need to be co-ordinated at the Strategic Health Authority (StHA) or Regional level, possibly with input from NICE Collaborating Centres. By seeking to develop good practice at the local level, and drawing upon this for national TAGs, it might be possible to significantly accelerate NICE's work programme.


5.1  TAG Selection Criteria

  5.1.1  Referrals to NICE so far have tended to be for new drugs (and occasionally new devices eg stents) rather than existing interventions involving human resources eg nursing care or health visiting[9]. While some central resources are ring-fenced for such purposes, there is a need to ensure that such interventions are considered for funding, or alternatively, resources are redeployed from them to fund other types of health care interventions.

  5.1.2  This raises the issue of selection criteria for TAG and guidelines topics. At present the topics are proposed by NICE's stakeholders, especially the Department of Health, using the selection criteria from the 2001 Guide to the Technology Appraisal Process (see Annex 2). However it appears that the criteria, which quite correctly include health and financial impact, and possible variation in practice, are only applied once the topics have been proposed. A more systematic review of the impact of health care interventions would have resulted in TAG being developed for common conditions such as femoral neck fracture, stroke, depression, hypertension and dyslipidaemia. NSFs are tackling some of these issues, but better coordination would ensure consistency of approach and avoid duplication.

5.2  The Need For Better Integrated Priority-Setting Processes

  5.2.1  There appears to have been relatively little in-depth discussion at the national level about developing a more transparent and rational resource allocation process at the highest level. The Treasury has rejected the concept of an hypothecated tax for the NHS, largely on the basis that it would complicate the setting of priorities between Government sectors. Other branches of central Government—for example the Department of Transport, Local Government and the Regions—use a similar approach (usually cost per life year gained) to prioritise health and safety investment. Hence There is a need to extend the approach developed by NICE to other public sector interventions, in the first instance perhaps to social care eg continuing care as it is often delivered in conjunction with health care.

  5.2.2  Within the NHS, Ministers have made it clear that they expect the targets or "must dos" of the NHS Plan, along with NICE guidance, to be a first call upon resources, although the detailed rationale for this is sometimes unclear. For example, a large proportion of new NHS resources have been allocated to reducing waiting times for elective care because of the high level of public concern about these in recent years. However, while public concern is one important criterion for resource allocation, it is not the only criterion, as NICE's work illustrates.

  5.2.3  Ministers could take a more prominent role in a discussion about the extent to which values such as public concern could be balanced against other criteria such as clinical and cost-effectiveness. This may be what the Secretary of State means by affordability[10]. However Ministers could be more active in leading a wider discussion about affordability and priority-setting in the NHS, and the values which underpin it.

  5.2.4  For example, while many elective surgical procedures are relatively cost-effective, universal waiting time targets imply that they are all equally so. This is clearly not the case. Because of differences in supply and expressed need for services, waiting times do not have a direct relationship with underlying need or the loss of benefit while waiting. They have been chosen using the criterion of public concern.

  5.2.5  If NICE were to develop more specific TAG on the provision of an intervention such as joint replacement, its evidence-based process should lead to the development of intervention thresholds based on likely capacity to benefit rather than waiting time. NICE has just released Referral Advice on 11 conditions. But the advice for osteoarthritis, for example, does not attempt to define a threshold for routine referral or intervention but states only that: "referral should be based on an explicit scoring system. . . developed locally. . . (which) should take into account. . . pain, disability, (and) reduced functional capacity.

. ." [11]. But what should the threshold score be?

  5.2.6  However in the longer term, there is not necessarily a conflict between public concern about waiting lists and an evidence-based approach to likely capacity to benefit from healthcare interventions. As better information about the outcomes of interventions becomes available, and it is actively shared in a partnership between patients and clinicians, the focus of public and political concern about access to care will naturally shift from waiting times to the funded clinical thresholds for intervention. This shift should be actively led and encouraged by Ministers and the Department of Health.

  5.2.7  In summary, currently there appear to be at least two approaches to priority-setting in the NHS- one based on political and public concern, and another based on NICE's evidence-based approach to technology appraisal. To date, NICE has not appraised a number of healthcare interventions funded through the political/public concern stream. However in the longer term the two approaches are not necessarily in conflict. There is a need for public discussion and political leadership to begin to integrate these values. In addition, NICE needs to further develop its current technology appraisal process to consider other healthcare interventions in addition to drugs and devices.


  6.1.1  There is a large body of evidence demonstrating the need for multifaceted strategies to promote the implementation of effective practice[12]. NICE has a role in supporting implementation beyond the provision of guidelines, an example being its stewardship of PRODIGY GP prescribing software. In addition, NHS Trusts are directly responsible for implementation, and the Commission for Health Improvement also has a role in regulating and inspecting their progress.

  6.1.2  There is a significant risk that TAG will not be implemented not because of insufficient resources to pay for the technology itself, but because of organisational overload, lack of human resource, and lack of skills and support. It is imperative that these issues be considered when TAG is being produced. In addition there is a great need for more central support and co-ordination of NICE guidance, for example through the definition of national information requirements to audit implementation.


  7.1.1  The Committee is asked to consider including the following recommendations in its Report:

  1.  That NICE be commended for the substantial progress it has made in a short period in ensuring fair and equitable access to NHS care.

  2.  That a legal determination of the status of NICE guidance with respect to individual clinicians be produced.

  3.  That NICE continues to develop its Guide to the Technology Appraisal Process to explicitly consider the decision-making process and the values considered in it, and to improve the methodology for valuing quality of life in health economic analyses.

  4.  That a national population model be developed to quantify health problems (both local and national) and cost NICE TAG at the level of each PCT, and for use at the local level as a planning tool.

  5.  That a model of good practice for hearing individual patient appeals about NICE TAG and local funding policies be provided for PCTs.

  6.  That either appraisal by NICE be added to the licensing requirements for new drugs and licensing requirements be established for other forms of health technologies; or a model of good practice whose principles were shared both by NICE and the local NHS is produced. This model would assure the quality of rapid technology appraisals at the local level, and ensure that they were more widely usable and could be drawn upon by NICE in its national TAG.

  7.  That NICE further develops its technology appraisal process (and if necessary more research is commissioned) to consider other common healthcare interventions in addition to drugs and devices, in particular for common conditions and for other NHS Plan targets (especially interventions subject to waiting list targets) and National Service Framework standards, so that priority-setting in the NHS becomes more integrated over time.

  8.  That the process also be extended to related public sector interventions, initially social care, so that priority-setting in the NHS and other publicly-funded services becomes more integrated over time.

  9.  That Health Ministers lead a public discussion on the other values which should underpin priority-setting in the NHS in addition to clinical and cost-effectiveness.


Strength of Evidence

IStrong evidence obtained from at least one properly designed, randomised controlled trial of appropriate size
IIEvidence from well designed controlled trials with randomisation.
IIIEvidence from well designed, cohort or case controlled analytical studies, preferably from more than one centre or research group

Evidence obtained from multiple time series, or from dramatic results in uncontrolled experiments.
IVOpinions of respected authorities based on clinical evidence, descriptive studies or reports of expert committees

Evidence inadequate owing to problems of methodology (sample size, length or comprehensiveness of follow-up) or conflicts of evidence

Evidence of Cost Effectiveness/Cost Utility

ACost utility of the intervention is less than circa £3,000 per life year gained (or quality equivalent)
BCost utility of the intervention is between £3,000 and £20,000 per life year gained
CCost utility of the intervention is between £20,000 and £50,000 per life year gained
DCost utility of over £30,000 per life gained
ENo life years gained or the treatment is detrimental to patients


Quality of the Evidence
Cost Utility


  ++++ = strongly recommended

  +++ = highly recommended

  ++ = recommended

  + = beneficial but high cost; may be recommended when other factors are considered/ or in light of further evidence

  x = not recommended

  o = not proven

Stage 2

  Additional factors which should be considered for treatments that score +

  Is the disease rare eg annual incidence 1/100,000 population or less?

  Are there ethical reasons why randomised controlled trials could not be carried out?

  Are there any other difficult/ unusual circumstances, which restrict further research into this disease?

  Are there any other criteria, which should be taken into, account eg benefits to carers, efficiency gains etc?


    —  Is the technology likely to result in a significant health benefit, taken across the NHS as a whole, if given to all patients for whom it is indicated?

    —  Is the technology likely to result in a significant impact on other health-related government policies (eg reduction in health inequalities)?

    —  Is the technology likely to have a significant impact on NHS resources (financial or other) if given to all patients for whom it is indicated?

    —  Is the Institute likely to be able to add value by issuing national guidance? For instance, in the absence of such guidance is there likely to be significant controversy over the interpretation or significance of the available evidence on clinical and cost effectiveness?

3   Support here includes the provision of guidelines or referral advice such as that just released for 11 common health problems. Back

4   ". . .in establishing priorities- comparing the respective needs of patients suffering from different illnesses and determining the respective strengths of their claims to treatment. . . it is vital for an authority accurately to assess the nature and seriousness of each type of illness, to determine the effectiveness of various forms of treatment for it, and to give proper effect to that assessment and that determination in the application of its policy." NW Lancashire HA v A, D & G (2000). Back

5   This function will presumably be transferred to PCTs in 2002 as part of legislative changes consequential on Shifting the Balance of Power (StBoP). Back

6   The HSC itself was not a clear direction. Subsequent judicial interpretation was that: "the (HA) had to have regard to that national policy. They were not obliged to follow the policy but if they decided to depart from it, they had to give clear reasons for doing so..." R v N Derbyshire HA, ex parte Fisher (1997). Back

7   McIver S and Ham C. Five cases, four actors and a moral: lessons from studies of contested treatment decisions. Health Expectations 3; 1999:114-124. Back

8   "NICE are appraising (imatinib) and their guidance is expected to be issued next August. The appraisal was originally timed to coincide with the expected licensing process but the latter has gone more quickly than expected. Health Authorities should bear in mind that delaying a decision until NICE has issued its advice is a refusal to fund the treatment and would be regarded as a negative judgement." (sic) Neil McKay, 24 October 2001. Back

9   Raftery J. NICE: faster access to modern treatments? Analysis of guidance on health technologies. BMJ 2001; 323:1300-3 Back

10   "There are two quite separate distinctions. . . which is about assessing clinical and cost effectiveness and a quite separate set of decisions which are around affordability issues. In the end you would want. . . affordability decisions to be located with an accountable politician who has to answer to the House of Commons and to Parliament. It just so happens that the accountable politician is me." Hon Alan Milburn, Evidence to House of Commons Health Committee, 8 November 2000, paragraph 336. Back

11   Referral Advice, NICE December 2001. Back

12   NHS Centre for Reviews & Dissemination. Getting evidence into practice. Effective Health Care Bulletin V5 No 1, York University February 1999. Back

13   Guide to the Technology Appraisal Process. NICE, June 2001. Back

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