Thursday, 2 February 2012

Opportunity cost at work


NICE, the National Institute for Health and Clinical Excellence, have the job of deciding if treatments are value for money for the NHS. It's a pretty thankless job. The NHS has a fixed budget and that has to be allocated to the most effective use.

The problem is that new treatments are very expensive and so take a lot of money. The case of a new prostate cancer drug illustrates the dilemma.

Prostate cancer is the most common cancer in men and kills 10,000 a year. A new drug that costs £3,000 a month will extend the life, but not cure, those with advanced prostate cancer. This very effective drug will cost a great deal of money, reduce suffering, but save no lives.

NICE have decided that, at the preliminary stage, the drug should not be available on the NHS. The decision is based on opportunity cost. How many more treatments can be provided to other patients instead of giving this drug to prostate cancer patients?

NICE are applying a cost-benefit approach and living with the problem of scarce resources. But that is little comfort to those with prostate cancer.

4 comments:

  1. From this article the opportunity cost is undoubtedly very important. Ethically it is very clear why people are angered by the decision not to give the drug to the NHS however for £3,000 a month per patient you can also see point of view of the institute.
    Although I do see it as a very grey area, especially with the cheaper alternative producing significant side-effects in order to truly understand this decision you would have to look into what else all of this money could be spent on. If for the same amount of money as 10 patients on the drug for a year you could buy a dialysis machine which could support hundreds of people and last longer than a year you would have to choose the latter.
    In my opinion you would have to investigate what equipment could be used to save the most lives and with only a basic insight into this area I would have to grit my teeth and support the decision of the institute not to give the NHS the drug.

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  2. Clearly the NHS have limits and budgets that they must meet and with the current economic situation resources are obviously scarce. This saying I do not believe that a cost can be put to the value of an individuals life so the new drug should be made available to all those in true need of it, this goes without saying that there is an opportunity cost to patients with other illneses. One the other hand the NHS should also consider the quality of the drug, even though the drug is lengthening the individuals life, to what quality or standard will those extra few months or years be, whether the length of life or the quality of the life is more important as thousands of pounds cannot be wasted on extending the life of an individual if they do not even get to enjoy it.

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  3. The decision of NICE is completely understandable, especially in the current economic climate. It is also understandable that the decision to refuse the drug angers some, because, after all, the whole ethos of the NHS is to save lives, and if not prolong it. However, they are caught between a rock and a hard place as they are dedicated to people's health, but which lives do you save to choose? Are there other areas which could benefit from the funding which have a more predicted and definite outcome?

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  4. I definetly understand this descision especially as the NHS has a budget and because of the state of the economic climate. The drug costs alot to extract and make and does not cure patients but only prolongs there lives with there now subdued pain even longer. Does the goverement pay a lot of money for someone who is for certain going to die, to live for a while longer in this terrible economic period or do they take a sacrifice and pay the same amount for something that will definitley benefit someone or everyone???? - that is the question. There is no denying that the goverment is stuck in a huge problem. The NHS ethos is all about saving lives so is it not wrong to then say you have to buy this drug privatley. Economics is all about sacrifice (oppurtunity cost), sometimes we have to sacrifice things that will give us happiness for a short time with things that will give us pleasure for a long time. I am not saying this argument is completley right as there may be someone who has got prostate cancer who has a family and would love to spend as long as possible with them and does not have enough money to buy it - I think the goverment need to acknowledge this and make comprimises. But all in all, lookin from the outside this descision is understandable.

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