This weeks Paper of the Week is brought to you by: Professor Sir Muir Gray

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Full reference and title from the journal:

Estimating the Marginal Productivity of the English National Health Service From 2003 to 2012, Lomas, J et al (2019), Value in health 22;995-1002.

Web Link to Paper:

Authors conclusion:

 “Taking cancer in 2012 as an illustrative example, the expenditure elasticity is interpreted as saying that a 1% increase in overall NHS expenditure leads to a 1.027% increase in cancer expenditure. The outcome elasticity suggests that cancer mortality is reduced by 0.361% as a result of a 1% increase in cancer expenditure. As outlined in the section “Translating mortality effects into quality-adjusted life-years”, these estimated elasticities can be combined with additional information about age, sex, life expectancy, and burden of disease of the patient population to produce estimates of the following: (1) volume of resources used to produce a unit of health benefit (cost per QALY) and (2) volume of health benefits produced using a unit of resource (QALYs per £ of expenditure). For the latter, we report the number of QALYs gained for £10 million, which represents a small amount of money relative to the overall level of NHS expenditure, and we label this the “health opportunity cost” (HOC) associated with £10 million of expenditure [and the increase in HOC was from £6381 in 2003 to £14410 in 2012]”

3VH – Implications for value:

 The Law of Diminishing Returns was described by Avedis Donabedian in 1980 with a variant of his classic diagram produced below.


The measures used in this study by the highly regarded team in York relate to Quality Adjusted Life Years which take into account both adverse and beneficial outcomes  for health service interventions as increased amounts of resource are invested at the margin of the budget

Possible reasons for changes  in marginal productivity in this time period in addition to rising costs due to inflation or price increase include

  • Intervening in people who are less severely affected and get less benefit
  • Intervening in people who are more at risk of side effects and harm
  • Offering new more expensive interventions without stopping the older interventions
  • Doing more interventions, or interventions more frequently, with no improvement in outcomes that matter
  • Changing the threshold for intervention so that a higher proportion of people with the condition get treatment

So how should decision makers think and act? We need to think about the marginal effect of investing resources  by asking all services questions which re-frame the statements which describe the trends listed above

  • Are you now treating people for who the balance of benefit to harm is less favourable?
  • Is innovation drifting in without action being taken to fund it by stopping redundant treatments?
  • Is there an increase in intensity of testing and treatment not supported by evidence?
  • Are the thresholds for treatment changing?

We also need to use this method for asking what would happen if we switched 5% of the budget from the respiratory budget to the musculoskeletal budget , or vice versa. What happens at the margins illustrates changes in value explicitly and clearly.

3V bottom line:

We always need to think what happens at the margin of a budget.