The Citizens Council of the UK's National Institute for Health and Clinical Excellence (NICE), which provides public input into the Institute's work, has published its final report on a November 2011 meeting on the issue of how NICE should assess future costs and health benefits.

The Council members' views on the issue of discounting -the way in which health benefits are valued and calculated over a very long period of time-will be used to guide the methods used by NICE's independent advisory committees. Discounting, a familiar concept in the retail sector, presents a particular challenge in healthcare since it usually involves upfront costs in return for the promise of future benefits.

As people tend to prefer benefits 'now', discounting usually places a lower value on benefits that occur a long way in the future than those occurring immediately. To determine the value of the benefit in the future compared to now, the value is adjusted by a certain amount which is called the discount rate.

Rawlins: 'Discounting is a Valid Aspect' of Calculations

NICE's central function is to assess whether clinical and public health interventions are value for money, and discounting presents particular issues for the Institute's advisory committees. "Different views on valuing future health benefits and costs translate into different discount rates, and … this affects conclusions on whether a new treatment could be considered cost effective or not," said NICE Chair Sir Michael Rawlins in a statement.

Rawlins added that, "The Citizens Council's view is that discounting is a valid aspect of the calculation of future costs and benefits. The Council also considered instances where the costs are upfront and the benefits accrue over a long period of time. In such cases the Council advised the Institute that it should depart from its current discounting policy-which is in line with all public bodies-of applying a 3.5% discount rate for costs and benefits."

Rawlins noted the Citizens Council hopes, "That NICE would take appropriate action should any occasions of public health being disadvantaged arise."

Such a scenario has, in an unrelated case, recently arisen. In early August Rawlins called on the National Health Service (NHS) to clamp down on local trusts restricting access to NICE-approved medications, saying the trusts were "denying patients an innovative and cost-effective treatment…that significantly improves their quality of life."

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NICE - Citizens Council report: discounting

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