Re-estimating health opportunity costs in the NHS


Contacts: Karl Claxton

Further to work recently undertaken and published in 2015 to estimate the NICE cost effectiveness threshold, more recently CHE has been funded to re-estimate this value for a period of years to assess whether or not this relationship between health care expenditure and health outcomes in England has changed significantly over time and what the relationship in more recent years looks like. In addition to influencing the way in which decisions over new investments are made within healthcare, the estimates will also provide an indication as to the productivity and value of healthcare spending itself.

Ongoing and future research concerns the estimation of the relationship between the level of expenditure and the health outcome achieved in each disease area over ten years: from 2003/04 to 2012/13. This analysis aims to estimate cost per QALY of marginal spending in the NHS for each of these years (or alternatively the health opportunity costs of £10 million for each of these years) and the associated uncertainty around central estimates. In addition, the analysis will explore different econometric approaches to estimation of these quantities, through, for example, the construction of a ten-year panel dataset.

We gratefully acknowledge funding for this work by EEPRU.



This project began in April 2016 and is due to conclude in June 2018. The details of the research plan and time lines can be found in Research plan for re-estimating health opportunity costs (PDF  , 258kb)

The analysis of 10 years of expenditure data from 2003/04 to 20012/13 has been completed and a brief summary of the findings can be found in Summary Figures and Tables 2003-04 to 2012-13 (PDF  , 425kb)

The analysis of each wave of data and the approach to estimation is fully documented in the reports for each year of expenditure data. Transferring the unit of analysis from PCTs to local authority geographies and incorporating 2011 census data is detailed in PCT to Local Authority unit of analysis_08_09 (PDF  , 1,425kb).

Reports for each year of expenditure data