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How do we make decisions in healthcare about which drugs and treatments to fund?

Dr Katherine Stevens from The University of Sheffield is lead educator on Measuring and Valuing Health. Here, she explains how Quality Adjusted Life Years (QALYs) are used as part of the decision-making process about which drugs to fund – an issue that has made headline news in the UK recently, due to a cut in the number of treatments paid for by the government’s Cancer Drugs Fund.

Dr Katherine Stevens from The University of Sheffield is lead educator on Measuring and Valuing Health. Here, she explains how Quality Adjusted Life Years (QALYs) are used as part of the decision-making process about which drugs to fund – an issue that has made headline news in the UK recently, due to a cut in the number of treatments paid for by the government’s Cancer Drugs Fund.

Dr Katherine Stevens of the University of Sheffield

Healthcare budgets around the world only have a limited amount of money with which to provide healthcare treatments and services to their populations. Budgets are limited, demand is increasing, and new drugs and treatments are being developed all the time.

We cannot fund everything, so we have to make choices about where we are going to spend our available resources. You may have seen coverage in the press about treatments not being funded. So how do we make these difficult decisions?

Using consistent, open and evidence-based approaches

This is not a new problem, as decision making over which drugs and treatments to fund has nearly always been undertaken. But recently, there has been a shift towards using consistent, open and evidence-based approaches, through the introduction of decision-making bodies, such as the National Institute for Health and Care Excellence (NICE) in the UK.

New drugs and treatments that are being considered for listing go to NICE, which looks at a range of factors when considering whether to approve them, including the clinical and cost effectiveness. When cost effectiveness is considered, an economic evaluation will be undertaken, which provides information on the relative costs and benefits of treatments.

A key factor in this is measuring and valuing the benefits of treatments. But how do we measure health benefits? How do we value health benefits? And how do we use this information in our decision making?

Shelves of drugs and medicine boxes

Introducing Quality Adjusted Life Years (QALYs)

NICE requires the use of Quality Adjusted Life Years (QALYs) as the measure of health benefit. These combine quantity and quality of life into a single measure of benefit, which allows us to make comparisons both within, and between, conditions and clinical areas.

A high-profile example of QALYs’ use, which you may have seen in the press recently, is the problem with the Cancer Drugs Fund, which was set up following the 2010 general election in the UK.

This fund operates independently from NICE and was created to allow access to cancer drugs not available on the UK National Health Service (NHS), because of their high cost. This fund is not sustainable; in fact, it has overspent and will no longer be providing some of the drugs it previously funded.

In his article in the New Scientist, Karl Claxton reports that the health benefits from the fund in 2013/2014 have been measured as 3,400 QALYs. Whereas if the money had been available to the wider NHS, the health benefit could have been 17,800 QALYs. This is a net loss of 14,400 QALYs.

Learn more about measuring and valuing health

You can learn more about QALYs, as well as Patient Reported Outcome Measures (PROMs), by joining our online course.

Over three weeks, we will invite you to discuss some key questions with us. For example, should we value children’s health differently? And who should value our health – patients, the general public or healthcare professionals.

 Discover more – join Measuring and Valuing Health now. 

Category Healthcare

Comments (54)


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  • Ioannis Ntanos

    I am really excited to start this course. I am very skeptical on the ways we value health. We are measuring health without taking in consideration poverty or unemplyment? I believe access to health is a human right and so access to it should be free. In this sense why do we need valuing health? I believe “limited” resources is a myth. We spend so much money in useless activities in health (and in other fields i.e. military), that measuring health expenses sounds hypocritical. I am afraid measurements are only used to promote politics and not health.

  • Rebecca

    This is a course statement not an article:
    a clear statement of where this one lecturer intends to take the course. As a sociology and linguistics graduate with a Masters in Disability Studies, I am fascinated to observe the framework in which a certain type of medical mind operates. It is indeed nothing new. I shall be paring this course with one on Holocaust Studies and Medieval England. I can see from the comments of fellow students that there will be a lot of crossover with my previous work.

  • Tina South

    Looking forward to starting the course and finding out more about QALYs and PROMS. I anticipate there will be ethical issues to debate with fellow learners.

  • Elke

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  • dappy

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  • Ani

    This article has influenced me on a highly motivating level because I am eager to learn about the decision making process when it comes to choosing the correct drugs in a constrained budget environment without devaluing the value for patients (outcome/cost)

  • Jo Sutherland

    Thanks very much for this article and for the upcoming course. I am really looking forward to robust discussions, particularly around prioritisation within a constrained budget and an entitlement culture.

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  • Roz Davies

    Great introductory article. I’m really interested in social prescribing and understanding how activities like physical activity, social networks and digital inclusion currently or potentially can be measured/ given a value in this sense.