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New 'budget impact test' unpopular & flawed solution to political problem

Posted on 23/03/2017

A new ‘budget impact test’, to be applied by the National Institute for Health and Care Excellence (NICE), is an unpopular and flawed attempt to solve a fundamentally political problem, argue experts from King’s College London in The British Medical Journal today.

The test means that NICE-recommended technologies costing the NHS more than an additional £20 million a year will be ‘slow-tracked’, regardless of their cost-effectiveness or other social or ethical values, explains Dr Annette Rid, Senior Lecturer in Bioethics and Society at King's and colleagues from the King's and University College London Social Values and Health Priority Setting group.

They acknowledge that with hospital wards overflowing and trusts in deficit, the introduction of cost-effective but expensive new technologies places increasing strain on NHS finances. But they say that, while the change may deliver short-term savings, it is flawed.

They explain that budget impact is essentially the price per patient multiplied by the number of patients treated. Yet the prevalence of someone’s condition should not determine their access to treatment.

The new test constitutes numerical discrimination, they argue. And if a large number of patients experience delays, the policy threatens widespread harms.

They also argue that the consultation on the policy was far from supportive, with less than a third of respondents believing that a budget impact threshold should be introduced, and only 23% agreeing that technologies exceeding the threshold should be subject to delayed implementation.

And NICE’s justification for pursuing its approach – that ‘no alternative solutions’ have been put forward – ‘is invalid in our view,’ they add. The consultation did not ask for other options.

Perhaps the policy aims to pressurise industry to lower its prices when volumes are high, they suggest. ‘But this is to use large patient groups as a bargaining chip.’

They believe that a systematic and transparent programme of disinvestment, though difficult, ‘could increase the resources available to fund new technologies’ while a more widespread use of risk-sharing on costs ‘might also help to reduce total budget impact.’ A further alternative would be to update NICE’s current cost-effectiveness threshold for all technologies, so treating patients equitably.

Or, most controversially, they say the 90-day funding requirement for NICE-approved technologies ‘could be removed entirely and the power to make decisions about affordability given back either to politicians or to NHS England.’

These alternatives raise significant ethical and political challenges. But they should be considered before NICE commits to an inequitable approach which few support, they conclude.

‘The recent consultation should have marked the start, not the end, of a more substantial debate about the role of affordability in the NHS. It is not too late to correct this mistake.’



Note to Editors

For further information please contact the Public Relations Department at King’s College London on 0207 848 3202 or

The full paper, Cost-effective but unaffordable: an emerging challenge for health systems, can be read at:


About King’s College London

King's College London is one of the top 25 universities in the world (2016/17 QS World University Rankings) and among the oldest in England. King's has more than 27,600 students (of whom nearly 10,500 are graduate students) from some 150 countries worldwide, and some 6,800 staff.

King's has an outstanding reputation for world-class teaching and cutting-edge research. In the 2014 Research Excellence Framework (REF) King’s was ranked 6th nationally in the ‘power’ ranking, which takes into account both the quality and quantity of research activity, and 7th for quality according to Times Higher Education rankings. Eighty-four per cent of research at King’s was deemed ‘world-leading’ or ‘internationally excellent’ (3* and 4*). The university is in the top seven UK universities for research earnings and has an overall annual income of more than £684 million.

For further information, please visit the website:    


About BMJ

BMJ is a healthcare knowledge provider that aims to advance healthcare worldwide by sharing knowledge and expertise to improve experiences, outcomes and value.



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