Purpose: To explore the use and influence of economic analyses in national technology coverage decisions and to consider how the impact of such analyses might be increased.

Methods: Over recent years there has been repeated expression of concern about the apparent lack of use of cost-effectiveness analyses (CEAs). Given that the central problem addressed by the discipline of economics is resource scarcity this is both surprising and concerning. The National Institute for Clinical Excellence (NICE) was established in the UK with a remit of making national coverage decisions concerning the adoption of health technologies. The Institute can be viewed as an experiment in the explicit use of CEA to inform national health policy – an independent economic analysis is commissioned for every appraisal topic. This paper reports findings from the first in-depth empirical investigation into the use of economic evaluation by the NICE Appraisals Committee. The research was qualitative in nature. Fieldwork was conducted over 12 months and focused on 7 technologies. Literature made available to the Committee was analysed, formal meetings were observed and 30 Committee members were interviewed. Data were collated and analysed on an ongoing, iterative basis.

Results: The themes identified are grouped under three headings: political (i.e. Committee composition and roles of members), concepts and processes (including Committee operation and conceptual challenges), and practical issues. The paper highlights the value in using CEA as the framework for discussion - a quote on this theme: “The reason why CEA is important is… the fact that it provides us with a framework to identify what we should be concerned about and where we should be pushing the argument.” In addition, important themes relating to the threshold QALY value, the shortcomings of the QALY construct itself and equity arguments were identified. A theme of ‘understanding of the CEA' reveals worrying shortcomings, as shown in another quote: “A number of Committee members don't appear to understand a word of what is going on when the health economics is discussed.”

Conclusions: The research primarily highlights the value of CEA not only in providing overall direction for coverage decisions but also in giving structure and focus to such discussions. Concerns exist in relation to CEA concepts (e.g. the QALY) and practical issues of how CEA is to be used.