Economic evaluation under managed competition: evidence from the U.K.

Although economic evaluation in health care has a long-standing tradition in the United Kingdom, very little is known about its impact on decision making, particularly following the introduction of the internal market. Since managed competition appears to be growing in popularity worldwide, the U.K. is an interesting case study, as the reforms are well underway and there have been a number of efforts to conduct and disseminate economic evaluations. In this paper the potential for using economic evaluation in health care decision making in the U.K. is discussed. Then its actual impact is assessed in two ways. First, two case studies are discussed, on heart transplantation and the use of pharmaceuticals in the management of labour in pregnancy. Second, new data from a recent survey of potential users of economic evaluations are presented, with the emphasis on exploring the reasons for the impact, or lack of impact, of economic results. It is concluded that the NHS reforms increase the potential for the use of economic evaluation. However, there is a need to increase decision makers' awareness of economic studies and to help them interpret study methodology and results. Although worries about validity of economic studies are one of the major barriers to their use, other important barriers relate to the multiple objectives being pursued, of which increased efficiency is just one, and the difficulties of freeing resources from existing services in order to divert them to more cost-effective treatments and programmes.