2.3 Current NICE methods for cost effectiveness and cost impact
2.3.2 NICE cost impact for public health
NICE introduced the systematic assessment of cost impact for all types of guidance in 2005. All public health guidance has an accompanying costing tool – usually available at the point of publication, or very shortly afterwards. The objective of the costing tools is to assist financial planning (typically over a 3−5 year time horizon) for people implementing NICE guidance (NICE 2008b).
A very basic assessment of cost impact is undertaken very early on in the process when potential topics (which anyone can suggest) are being considered. NICE reviews each of the suggestions received to ensure they are appropriate and to check whether they are already included in its work. The suggestions are then filtered according to a checklist based on the Department of Health's selection criteria, with the DH having final say on which topics it requests NICE to produce guidance on. One of the topic selection criteria is cost impact. In the topic selection process more weight is given to topics that are potentially cost saving, or have significant cost implications, than those that are cost neutral or low cost. In the case of the latter, the rationale is that if something is likely to have a significant impact then it is important it is fully assessed by NICE. However, cost impact is only one criterion of the prioritisation process. The other criteria are: burden of disease
(population affected, morbidity, mortality), policy importance (that is whether the topic falls within a government priority area), whether there is inappropriate variation in practice across the country, and factors affecting the timeliness or urgency for guidance to be produced. Topics that are subsequently referred to NICE by the DH will be developed by the appropriate committees and the costing team next get involved when draft recommendations are available. Draft costing tools are
developed and are subject to a limited consultation involving guidance developers and a sample of potential users, and following a quality assurance process will be published on the NICE website in electronic format (not as a hard copy) when the guidance is published. Frequently information from the costing work is also noted in press releases or other material supporting the guidance launch.
The systematic assessment of cost impact was introduced to assist people implementing NICE guidance to estimate the costs and savings arising from
39 implementation. A financial management perspective is taken with costs or savings considered on an annual basis which is the period that most organisations’ budgets cover. Although predictions also look at the 3−5 year time horizon regarding what can be achieved, rather than just the year following publication, it does not include longer-term costs or savings that may be considered in the cost-effectiveness models.
Cost impact assessment is undertaken by:
Assessing the recommendations, interventions and other related areas in guidance and identifying areas most likely to have resource impact.
For areas identified, investigating what the current baseline level of service/utilisation is. In addition to the costs to deliver services the potential savings arising from recommendations, such as cardiovascular events avoided are also estimated.
Working with professionals to predict the optimum4 level of
service/utilisation following implementation of the recommendations. This also includes predicting the impact on potential savings.
Quantifying the resources required to move from current position to optimum position.
The output from consideration of cost impact is a costing tool(s) that is (are) produced for each published public health topic. The costing tools take a number of different forms:
1. Costing report – where there is an expectation that there will be cost impact that requires discussion a costing report will be produced
(sometimes accompanied by a template). This will highlight the population
4 The level of service if people followed the recommendations – taking account of the fact that some recommendations may not be appropriate for every patient. For example medicine uptake might be 95% on the assumption that 5% would be contra-indicated.
40 affected, the potential increase/decrease in costs and any savings
anticipated to arise from implementing the recommendations. Where data are available and assumptions have been made to quantify the costs and savings arising from implementing the recommendations then the source of data and assumptions will be noted in the report.
2. Costing template – where data are available and reasonable certainty about the response of services in implementing the recommendations then a costing template is produced that quantifies costs and savings.
This is done at a national level for England, and the template also
provides users with an opportunity to estimate local cost impact based on their population; changing assumptions to reflect local circumstances where appropriate.
3. Business case – some NICE public health guidance that is aimed at employers has had a business case tool produced that takes employers through the elements to consider regarding costs and savings from implementing recommendations. Different elements could include the number of employees in the organisation, average pay rates, rates of sickness and the potential improvements that could be achieved that, in some instances, have been shown to more than offset investment by the employer. In these circumstances it is not possible to estimate national cost impact for England because employers have more freedom to choose whether or not to implement the guidance.
4. Costing statement – where there is an expectation that cost impact of an individual recommendation will not be significant (defined as less than £1 million for England) a costing statement is produced that explains why cost impact is not considered significant. A costing statement may also be produced where there are little data on baseline level of service delivery. If it is not possible to predict the service’s response to implementing the recommendations then a costing statement may be produced if there is insufficient material to discuss in a full costing report.
Quite often a costing template is produced that will enable people to consider their
41 local situation and quantify local costs and savings, where it has not been possible to quantify the national impact of guidance implementation.
For some topics (selected through a comprehensive review identifying guidance that has implications for commissioners of services) a commissioning guide, and accompanying benchmarking and commissioning tool has been produced.
Appendix B summarises the costing tools that have been produced for public health topics published up to February 2010.