Estimating ‘Costs’ for Cost-Effectiveness Analysis

Since 1999, the National Institute for Health and Clinical Excellence (NICE) Technology Appraisal Programme has been charged with producing guidance for the NHS in England and Wales on the appropriate use of new and existing healthcare programmes. Guidance is based on an assessment of a number of factors, including cost effectiveness. The identification, measurement and valuation of costs are important components of any cost-effectiveness analysis. However, working through these steps raises a number of important methodological questions. For example, how should ‘future’ resource use be estimated, and is there a need to consider all ‘future’ costs? Given that NICE produces national guidance, should national unit cost data be used to value resources or should local variations in negotiated prices be taken into account? This paper was initially prepared as a briefing paper as part of the process of updating NICE’s 2004 Guide to the Methods of Technology Appraisal for a workshop on ‘costs’. It outlines the issues that were raised in the original briefing paper and the subsequent questions that were discussed at the workshop.