The University of Sheffield
eepru-report-research-to-inform-resource-allocation-in-hsc-jan-2014-017.pdf (1.09 MB)

Research to inform resource allocation in health and social care. Results of a scoping study

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posted on 2024-02-15, 15:04 authored by Mark Sculpher, Simon Walker, Sebastian Hinde, Karl Claxton


The Department of Health faces a number of challenges in allocating resources. The first relates to the expectation that budgets available to allocate to various areas of health and care activities are unlikely to increase markedly in real terms. A second challenge is the possible change in the pattern of health and care need over time. A third challenge is to ensure that the most cost-effective prevention, treatment and care services are funded regardless of budgetary responsibilities


The research aims to provide an initial scope of the types of appropriate analytical methods, evidence sources and research activities that will inform policy responses to these challenges. The objectives of the scoping project were:

i. To define an analytical framework for assessing the benefits of reallocating resources within and between sectors.

ii. To establish what types of research have been undertaken or are on-going relating to the cost effectiveness of medical services, public health, social care and non-health and social care spending that has an influence on health and well-being.

iii. To describe relevant data sources that could be used for empirical analysis consistent with the analytical framework.

iv. In collaboration with the DH, to hold a workshop involving relevant stakeholders to help to define the key policy questions and the research to address them.


The analytical framework is based on the tools of cost-effectiveness analysis (CEA) to inform decisions with an objective of maximising benefits from constrained budgets. It is developed as an analytical support for decisions about resource reallocation, with a particular focus on shifts in resources between medical services (treatments), and preventive and care interventions. It introduces the concept of directed investment and disinvestment where the DH would identify specific interventions for additional funding and/or for disinvestment or reduced funding. This is distinguished from undirected investment and disinvestment where general budget transfers are implemented by the DH, but the specific investments and disinvestments relating to those transfers are left to other decision makers to define (e.g. at a local level).

Depending on the type of reallocation being considered and the budgets to which they relate, the framework defines the specific analyses to be undertaken and the evidential implications. The general approach assumes a common health outcome measure with relevance across treatment, prevention and care. In the case of undirected investment and disinvestment, estimates of the marginal productivity of the relevant budget(s) (cost-effectiveness thresholds) would be required. For directed investment or disinvestment, the costs falling on different budgets and health outcomes would need to be quantified, although the value of potential reallocation options would need to be benchmarked against relevant cost-effectiveness thresholds. Further developments of the framework are explored including how to deal with evidential uncertainty, handling costs and effects falling outside health and care budgets and the implications of potential changes in cost-


effectiveness thresholds over time. The implications of potentially different outcome measures between treatment/prevention and care are also explored.


The types of available evidence to populate the analytical framework are characterised. With respect to the costs and benefits of specific interventions, this is most abundant for medical interventions, particularly new treatments such as branded pharmaceuticals. There is appreciably less evidence relating to public health, and little evidence on social care interventions. The National Institute of Health and Care Excellence (NICE)’s activities in technology appraisal and public health are important contributors to the evidence base of UK studies; its new social care programme may deliver important evidence in the future. The National Institute of Health Research funds important primary research in all three areas. It can be expected, however, that evidence is available for a very small proportion of the interventions, programmes and services being routinely funded by the NHS and local authorities. There is a marked lack of cost-effectiveness evidence relating to candidate interventions for disinvestment.

Estimates of the cost-effectiveness thresholds relating to treatment, prevention and care budgets are a key source of evidence. Recent work using routine data to estimate the NHS cost-effectiveness threshold can guide investment in and disinvestment from NHS budgets. No estimates of the cost-effectiveness thresholds associated with public health expenditure by local authorities are available. Work is ongoing to estimate relevant thresholds for social care.


A workshop was undertaken in May 2014 involving a range of academic and public sector analysts, decision makers and other stakeholders. On the basis of a series of presentations regarding the analytical framework and available evidence, participants provided feedback and further ideas in small groups.


NIHR Policy Research Unit - Economic Methods of Evaluation in Health and Care Interventions



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