Select Committee on Health Appendices to the Minutes of Evidence


Memorandum by The NHS Confederation (NC 66)


  1.1.  The NHS Confederation welcomes the establishment of the National Institute of Clinical Excellence (NICE) and acknowledges that it has produced high quality guidance that is useful to the service.

  1.2.  However, there are concerns about the wider policy environment and what effects it has on NICE's work.

  1.3.  The Confederation is concerned that mandatory guidance may distort local priorities. By redirecting resources to NICE prescribed variations may be produced elsewhere.

  1.4.  The Confederation has some concerns about the overly simplistic approach to clinical guidelines. NICE appraisals should take into consideration the possible clinical, demographic and other conditions and issues affecting implementation at the local level.

  1.5.  There is little in-year flexibility for NHS organisations as resource allocation takes place on an annual basis.

  1.6.  The Confederation welcomes NICE's independence but believes that it must sustain and strengthen links with the NHS. This will enhance the development of its work programme; the appraisal process and the final guidance to the service.   


  2.1.  The NHS Confederation is the voice of NHS management. Our members include the majority of NHS trusts, primary care trusts (PCTs) and health authorities in England; trusts, health authorities and local health groups in Wales; trusts and health boards in Scotland; and health and social services trusts and boards in Northern Ireland.

  2.2.  For information about the work of the NHS Confederation across the UK you can visit our website:


  3.1.  The views and recommendations in this paper have been formulated from views expressed by the Confederation's virtual policy networks in England. The Confederation would like to thank all its members that have helped in the preparation of this paper.


  4.1.  The Confederation welcomes the establishment of NICE and acknowledges that NICE has produced high quality guidance that is useful to the service. The existence of NICE has reduced the replication of effort in reviewing the evidence in multiple NHS organisations to varying standards. NICE has raised the public understanding of the need to consider treatments according to their effectiveness.

  4.2.  Our members do not question the quality of the technical appraisal of new technologies, however, there are a number of aspects of the way that NICE is currently required to operate that do cause some concern.

  4.3.  The publication of NICE appraisals throughout the year does not fit with the annual allocation of resources to NHS organisations. The requirements to fund NICE treatments may lead to in-year financial pressures as contingency flexibility becomes increasingly limited. The timing of NICE appraisals causes very significant difficulties for Health Authorities and PCTs as they are required to estimate the likely result of NICE's determination, the timing of the announcement and the scale of its effect at the start of the financial year.

  4.4.  The estimates of the financial impact by NICE appear to be of dubious quality. This is not a criticism of NICE as the data on which they have to work is poor but it compounds the problem referred to in 4.3.

  4.5.  NICE has concentrated on decisions about whether to start using new technologies and much less on which treatments could be stopped. The dissemination and implementation of guidance needs more thought.

  4.6.  Some important areas that could have been referred to NICE have not been. Perhaps the most striking of these was the decision by the Department of Health to require the use of disposable instruments for tonsillectomy operations because of the theoretical risk of transmitting nvCJD. The costs of this were very high and the result has been one very real avoidable death.


  5.1.  The government recently announced that it would require Health Authorities and PCTs to fund the decisions made by NICE. This is likely to have very serious unintended consequences unless the way that NICE operates is changed.

  5.2.  At present NICE only examine individual treatments or technologies referred to them by the Department of Health's Advisory Group. The assessment of cost effectiveness does not generally make any judgements about the relative effectiveness of the treatment against the available alternatives. The assessment is made difficult by a lack of good quality cost effective data. Even where it may do this there is no judgement made about how best to allocate limited resources to the new treatment. Many of the treatments that NICE have examined have been at the margins of cost effectiveness. As a result the paradox arises that the government will mandate the funding of a marginally cost effective drug and local NHS organisations may have to achieve this by not supplying drugs which are very much more effective and would benefit more people.

  5.3.  The argument that this is good for patients or that it eliminates post code prescribing is spurious. By definition insisting on funding a less cost effective treatment will be at the expense of other patients who would have benefited more. It may eliminate post cost prescribing in the treatment that NICE have examined but, as the funding government provides for NICE decisions is in general allocations and not earmarked, different NHS organisations will find the money in different ways producing variation elsewhere. Earmarking would not be possible for reasons explained in 4.3 above.

  5.4.  A very disturbing example of the perverse and unintended consequences of mandated funding is beginning to be apparent in the case of atypical anti-psychotics (which is currently at final appraisal stage). To fund the implications of the NICE decisions reductions will need to be made in the already stretched staffing of mental health trusts which will mean poorer care overall for patients.

  5.5.  The mandating of funding is good news for those companies fortunate enough to have their drugs assessed by NICE. They are provided with a very useful marketing tool.


  6.1.  NICE was not intended to assess the entire range of treatments, technologies and interventions available. There are still many difficult decisions about the relative priorities that need to be made. PCTs will need to make challenging decisions on where to invest resources and this will not just be made on cost effectiveness data, but is a balanced decision which will take account of a number of factors including ethical values and the views of the community. Just because a treatment is found to be cost effective does not mean that it would be wise or a good use of resources to fund it if there are more pressing priorities locally. It is difficult to compensate for a more expensive replacement treatment with possible hidden implementation costs in an existing largely inflexible budget. The government's policy of shifting the balance of power to front line decision makers recognises the importance of these decisions being taken as close to the patient as possible. The policy of mandating the funding of a certain number of marginal treatments seems to directly contradict the intention to shift the balance of power.

  6.2.  There needs to be a further debate on the way that NICE fits into the current system of resource allocation and local decision making. One suggestion is that it should be asked to prioritise its recommendations within a fixed technology growth budget. NICE could increase the budget by suggesting possible disinvestment. Alternatively NICE could be asked to look at relative priorities within particular programmes of care and to assess how a new treatment or intervention scored against the cost effectiveness of existing treatments. This could also be in the context of an agreed budget for technology growth. PCTs would find the information produced in this sort of exercise of great value.

  6.3.  PCTs will need to make challenging decisions on where to invest resources and this will not just be made on cost effectiveness data, but is a balanced decision which will take account of a number of factors including ethical values and the views of the community.

  6.4.  NICE guidance needs to be available as a high quality resource to inform local decision-making. It should be considered whether there needs to be a differentiation between what is absolutely funded after NICE consideration and those technologies which are most appropriately considered locally. For example, a PCT might be guided on the use of taxanes for breast cancers but decide to invest in secondary prevention for coronary heart disease rather than fund glycoprotein 11b/111a inhibitors.


  7.1.  The NHS Confederation welcomes NICE's independence. Its present system of inviting suggestions for work programmes has focused more on new technologies than existing ones. The most effective method of appraisal should cover range of technologies for a particular condition. This system would cover both new and old drugs and interventions.

  7.2.  Given the importance of NICE's work and particularly since the government have mandated the funding of NICE appraisals, very much more thought needs to be given to how the areas that NICE should be examining are chosen. At present these are not transparent and it is not clear how expert opinion is canvassed. More sophisticated methods to identify areas for study are required.


  8.1.  The NHS Confederation supports the role of NICE and with the exception of the rather disappointing work in the area of referral guidelines, is broadly happy with the way that it has conducted its work. We are less happy with the way that topics are chosen for study, the consideration of technologies in isolation from alternatives or with the potentially serious implications for allocative efficiency of mandating the funding of treatments that may be less cost effective than others that NICE have not reviewed. The timing of guidance and the extent to which it is consistent and supports local implementation and is sensitive to local issues also needs consideration.

  8.2.  The problem of how new technologies and treatments can be afforded and prioritised still needs a solution. Professor Alan Maynard and colleagues from York University have offered some interesting proposals about how NICE could contribute to this in their recent BMJ article and these should be debated. Simply instructing a lower level of the NHS to find the money does not solve the fundamental problem that difficult resource allocation decisions need to be made. NICE does not provide sufficient information to allow this and was not intended to fulfil this role. The balance achieved in the National Service Frameworks of national standards based on gold standard evidence and key milestones combined with local implementation offers a useful way forward. This would also allow some of the more contested and controversial decisions to be made locally after a proper debate with patient groups, the public and local professionals.

December 2001

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