The Kennedy report: Appraising the value of innovation and other benefits

Value of healthcare

Kennedy acknowledges that there are benefits of healthcare that the quality-adjusted life-year (QALY) instrument does not take into account. Some of these benefits are expansions of the concept of health (e.g. to include aspects such as loss of quality of life following sensory loss, which are not captured in the EuroQol-5D framework); others are characteristics that modify the value we attach to a given change in health (e.g. for health at the end of life). A third area for consideration is the range of social benefits that flow from health (e.g. productivity and economic wellbeing). The list of individual factors is long—and becomes longer still when one considers the potential for interactions between factors.

There is clearly a need for research into which of these many possible benefits the NHS should consider, what weight should be given to each and, crucially, how they relate to each other. However, Kennedy recommends that NICE should not wait for such research, but should begin to take account of these factors in its estimation of the cost effectiveness of appraised technologies. He calls for the benefits for innovative treatments to be expanded beyond health (as measured by the QALY), and to include preferences (e.g. mode of administration and treatment location) that would not ordinarily be considered within standard cost effectiveness. The inclusion of these preferences would be based on knowledge about the specific population, disease and technology under consideration. By contrast, little information is available about the healthcare for those who bear the opportunity cost (i.e. those who forego interventions as a result of an innovative treatment being introduced) beyond an estimate of cost effectiveness.

Whilst the proposed changes may make it much easier to say how important innovative treatments are to potential recipients, we cannot say how important the treatments foregone are to those who stand to lose them. Without this ability, it is almost inevitable that the system will be inappropriately biased in favour of innovative technologies, since only these technologies are in a position to have additional benefits counted. Unless the effects of disinvestment are also considered, the proposed changes are clearly inequitable and will conflict with the core NHS principle of equal access to healthcare.

Kennedy also calls for a higher cost-per-QALY threshold to be applied to ‘innovative’ technologies—a change that may further bias the healthcare system. A higher threshold will inevitably mean that less health can be produced from the fixed NHS budget.

Kennedy’s recommendations beg several questions, for example:

If NICE proceeds immediately on Kennedy’s recommendations, its decision makers must act with little robust evidence. If they place too high a weight on healthcare factors, NICE risks having to withdraw recommendations—amidst inevitable controversy. On the other hand, the legitimacy of the decision makers, and NICE in general, will be called into question if too low a value is given to a treatment that is initially denied.

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