For education and revision only. Not individual medical advice; check current NICE/BNF and local guidance before clinical use. Clinical safety and terms.
Public Health: Health economics, quality improvement and global health
🌍 Health economics, quality improvement and global health. Resources are always limited, so every decision to fund one treatment means something else is not funded - the opportunity cost. Doctors need to understand how NICE judges value for money, how to measure and improve the quality and safety of care, and the global context of health. These topics feature in the UKMLA (clinical research, governance and professional knowledge) and MRCP. Your four questions: What does it cost, and what is given up (opportunity cost)? How much health does it buy (QALYs)? How do we know care is safe and good quality, and how do we improve it? How does this compare globally?
Core Economic Concepts
Opportunity cost - the value of the next best alternative forgone when resources are used. The fundamental concept of health economics.
Efficiency:technical efficiency - achieving an outcome at the lowest cost; allocative efficiency - allocating resources to the mix of services that maximises health (or welfare).
Equity:horizontal equity - equal treatment for equal need; vertical equity - unequal treatment for unequal need (more for greater need).
Marginal analysis - the extra cost and benefit of a little more or less of a service, rather than the average.
Costs: direct (drugs, staff, equipment), indirect (productivity losses), intangible (pain, anxiety); perspective matters (NHS and personal social services in NICE reference case; societal perspective includes wider costs).
Discounting - future costs and benefits are valued less than present ones; NICE uses 3.5% per year for both.
Market failure in healthcare - information asymmetry, uncertainty, externalities (e.g. vaccination benefits others), supplier-induced demand - the economic justification for public provision and regulation.
Outcomes shown to be equivalent - compare costs only
Generic versus branded drug with identical effect
Cost-effectiveness analysis (CEA)
Natural units (life-years gained, strokes prevented, mmHg)
Comparing interventions with the same outcome
Cost-utility analysis (CUA)
QALYs (or DALYs)
Comparing across different diseases - NICE's preferred method
Cost-benefit analysis (CBA)
Outcomes in money (e.g. willingness to pay)
Comparing health with non-health investments
Cost-consequence analysis
Lists costs and multiple outcomes separately
Complex interventions; decision-makers weigh them
Budget impact analysis - affordability for the NHS (NICE budget impact test: interventions costing over £20 million a year in any of the first 3 years may need managed introduction).
Decision analytic models - decision trees (short-term), Markov models (chronic conditions, cycles between health states).
Sensitivity analysis - tests how robust results are to uncertainty in inputs (one-way, probabilistic); results shown on a cost-effectiveness plane and acceptability curve.
QALY (quality-adjusted life year) = years of life × utility (quality of life weight), where 1 = full health and 0 = dead (values below 0 are possible - states worse than death).
Utility is commonly measured with the EQ-5D questionnaire (mobility, self-care, usual activities, pain/discomfort, anxiety/depression) valued using UK population preferences; alternatives include time trade-off and standard gamble.
Incremental cost-effectiveness ratio (ICER) = (cost of new treatment − cost of comparator) ÷ (QALYs of new treatment − QALYs of comparator) = cost per QALY gained.
NICE threshold: from April 2026, NICE's standard cost-effectiveness threshold range is £25,000–£35,000 per QALY gained (previously £20,000–£30,000 since NICE's early years). Interventions below the range are usually recommended; above it, recommendation needs stronger justification.
Severity modifier (since 2022) - higher weight (QALY multipliers of 1.2 or 1.7) for conditions with a large absolute or proportional QALY shortfall; replaced the previous "end-of-life" criteria.
Highly specialised technologies (very rare diseases) use a much higher threshold (around £100,000 per QALY, up to £300,000 for exceptional benefit).
Dominance: a treatment that is both cheaper and more effective "dominates" its comparator.
Criticisms of QALYs: may discriminate against older people (fewer life-years to gain) and disabled people; insensitive to some outcomes (e.g. carers, dignity); utility values vary with who is asked; "a QALY is a QALY" (equity concerns).
Implicit rationing - waiting lists, thresholds for referral, dilution of services, deterrence.
Accountability for reasonableness (Daniels and Sabin) - fair priority setting requires publicity, relevance, a mechanism for appeal and enforcement.
Programme budgeting and marginal analysis (PBMA) - used by commissioners to reallocate spending.
NICE technology appraisal recommendations are mandatory - the NHS in England must fund them (normally within 90 days); clinical guideline recommendations are not mandatory but should inform practice.
Postcode prescribing - variation in access to treatments between areas, which NICE was established (1999) to reduce.
The audit cycle: choose a topic → set standards (criteria and targets, e.g. "100% of patients on methotrexate have FBC in the past 3 months") → measure current practice (data collection) → compare with standards → implement change → re-audit to close the loop.
National clinical audits - e.g. National Hip Fracture Database, Sentinel Stroke National Audit Programme (SSNAP), National Diabetes Audit, MINAP (myocardial infarction).
Patient consent and confidentiality apply to audit data; use anonymised data where possible.
Model for Improvement (Institute for Healthcare Improvement) - three questions: What are we trying to accomplish (aim)? How will we know a change is an improvement (measures)? What change can we make that will result in improvement (change ideas)? - then PDSA cycles (Plan, Do, Study, Act) to test changes rapidly on a small scale.
Measures:outcome, process and balancing measures (unintended consequences elsewhere).
Run charts (data over time with median; rules to detect non-random signals - shifts of 6+ points, trends of 5+, runs) and statistical process control (SPC) charts (control limits at ±3 SD) - distinguish common cause (random) from special cause variation.
Other tools: process mapping, fishbone (Ishikawa) diagrams, driver diagrams, Pareto charts (80/20 rule), 5 whys, Lean (removing waste - e.g. waiting, unnecessary movement), Six Sigma (reducing variation), human factors and ergonomics.
Sustainability and spread - plan from the start (NHS Sustainability Model).
Scale: about 1 in 10 hospital admissions involves a patient safety incident; around half are preventable.
Swiss cheese model (Reason) - harm occurs when holes in multiple layers of defence align; distinguishes active failures (unsafe acts at the sharp end) from latent conditions (system weaknesses - staffing, design, culture).
Human factors - design systems around human limitations (fatigue, interruptions, cognitive load); checklists (WHO Surgical Safety Checklist), standardisation, forcing functions (e.g. non-Luer connectors for spinal drugs).
Just culture - distinguishes human error (console), at-risk behaviour (coach) and reckless behaviour (sanction); encourages reporting.
Patient Safety Incident Response Framework (PSIRF, 2022) - replaced the Serious Incident Framework in England; proportionate, learning-focused responses (after-action reviews, swarm huddles, patient safety incident investigations), involving patients and families. Incidents are recorded on Learn from Patient Safety Events (LFPSE), which replaced NRLS.
Never events - serious, largely preventable incidents that should not happen if national guidance is followed (e.g. wrong-site surgery, retained foreign object after surgery, wrong-route administration of medication, overdose of insulin due to abbreviations, misplaced nasogastric tube not detected, transfusion of ABO-incompatible blood).
Duty of candour:professional (GMC/NMC - be open and honest when things go wrong, apologise, explain, put right) and statutory (Health and Social Care Act regulations - organisations must notify patients of notifiable safety incidents involving moderate or severe harm or death, apologise, and follow up in writing).
Medication safety: Yellow Card reporting (MHRA), the "Medication Without Harm" WHO challenge, high-risk drugs (insulin, anticoagulants, opioids, methotrexate, potassium).
Freedom to Speak Up Guardians - support staff to raise concerns; whistleblowing is protected (Public Interest Disclosure Act 1998).
Clinical governance (Scally and Donaldson, 1998): "a system through which NHS organisations are accountable for continuously improving the quality of their services and safeguarding high standards of care by creating an environment in which excellence in clinical care will flourish".
Pillars: clinical effectiveness and research, audit, risk management, education and training, patient and public involvement, information and IT, staff management (and openness).
Regulators:CQC (registers and inspects providers - safe, effective, caring, responsive, well-led; ratings outstanding, good, requires improvement, inadequate), GMC (registration, revalidation every 5 years, fitness to practise), NMC, MHRA, HSSIB (Health Services Safety Investigations Body - independent safety investigations).
Revalidation - annual appraisal with supporting information (CPD, quality improvement activity, significant events, feedback from colleagues and patients, complaints and compliments).
Major inquiries that shaped governance: Bristol Royal Infirmary (1990s, paediatric cardiac surgery), Shipman (2005), Mid Staffordshire (Francis Report, 2013 - duty of candour, patient-centred culture), Morecambe Bay maternity (2015), East Kent maternity (2022), the Thirlwall Inquiry (Countess of Chester), and the Infected Blood Inquiry (2024).
NHS founding principles (1948): comprehensive, universal, free at the point of use, based on clinical need not ability to pay. The NHS Constitution sets out rights and pledges (e.g. 18-week referral to treatment).
UK health spending is about 11% of GDP (around four-fifths publicly funded); the USA spends about 17% with worse life expectancy.
Universal health coverage (UHC) - all people can use the health services they need without financial hardship (Sustainable Development Goal target 3.8). Catastrophic health expenditure pushes about 100 million people a year into extreme poverty.
Health system building blocks (WHO): service delivery, health workforce, information, medical products and technologies, financing, leadership and governance.
Global burden of disease: non-communicable diseases (cardiovascular disease, cancer, chronic respiratory disease, diabetes) cause about 70% of deaths worldwide, increasingly in low- and middle-income countries; infectious diseases, maternal, neonatal and nutritional conditions remain major causes in sub-Saharan Africa and South Asia.
Sustainable Development Goals (SDGs, 2015–2030) - SDG 3: "Ensure healthy lives and promote well-being for all at all ages" - targets include maternal mortality below 70 per 100,000 live births, ending preventable newborn and under-5 deaths, ending epidemics of AIDS, TB and malaria, and UHC.
Child mortality: under-5 deaths have more than halved since 1990, but about 5 million children still die each year - mainly from neonatal conditions (prematurity, birth asphyxia, sepsis), pneumonia, diarrhoea and malaria; undernutrition contributes to about 45%.
Effective low-cost interventions: vaccination, oral rehydration solution with zinc, exclusive breastfeeding, insecticide-treated bed nets, skilled birth attendance, family planning, clean water and sanitation (WASH).
Global health security: International Health Regulations (2005), WHO Pandemic Agreement (adopted 2025), antimicrobial resistance, zoonoses and One Health (linking human, animal and environmental health).
Major global health actors: WHO, UNICEF, the World Bank, Gavi (vaccines), the Global Fund (HIV, TB, malaria), philanthropic foundations, NGOs.
Health worker migration - the UK recruits many doctors and nurses internationally; the WHO Code of Practice discourages active recruitment from countries with critical workforce shortages (WHO "red list").
The Lancet calls climate change "the biggest global health threat of the 21st century" - heat, extreme weather, food and water insecurity, vector-borne diseases, air pollution, migration and conflict.
The NHS is responsible for about 4% of England's carbon emissions; "Delivering a Net Zero NHS" (2020) targets net zero by 2040 for emissions it controls directly and 2045 for its wider supply chain.
Clinical actions: reduce low-value care, deprescribe, choose low-carbon inhalers where clinically appropriate (dry-powder rather than pressurised MDIs), reduce desflurane and nitrous oxide waste in anaesthesia, prevention (the most sustainable care is care that is not needed), remote consultations where appropriate, active travel.
Co-benefits - active travel and plant-rich diets improve health and reduce emissions.
QALYs: treatment gives 4 years at utility 0.75 = 3 QALYs; comparator gives 4 years at 0.5 = 2 QALYs → 1 QALY gained.
ICER: new drug costs £40,000 and gives 3 QALYs; current treatment costs £10,000 and gives 2 QALYs → ICER = £30,000 ÷ 1 = £30,000 per QALY - within NICE's £25,000–£35,000 range.
Dominance: a new treatment costs less and gives more QALYs → it dominates; no ICER is needed.
Discounting: £1,000 of cost incurred in 1 year is valued at £1,000 ÷ 1.035 ≈ £966 today.
Scenario. A team wants to know whether their ward meets the NICE standard that all patients over 65 admitted with a fall have a lying and standing BP within 24 hours.
Answer: This is a clinical audit - define the standard and target, collect data, compare, implement changes (e.g. admission proforma, education), and re-audit. Ethics approval is not usually required.
Scenario. A wrong-site tooth extraction occurs. What are the responsibilities?
Answer: Wrong-site surgery is a never event. Respond under PSIRF (patient safety incident investigation), report on LFPSE, fulfil the statutory and professional duty of candour (tell the patient, apologise, explain and follow up in writing), and support staff in a just culture.
Scenario. A new cancer drug costs £60,000 per QALY. The condition is severe with a large QALY shortfall. Could NICE recommend it?
Answer: Possibly - the severity modifier can increase the weight of QALYs (×1.2 or ×1.7), and commercial arrangements (patient access schemes, managed access agreements) can reduce the price. Otherwise it is unlikely to be recommended at that ICER.
Scenario. A run chart of daily discharges before noon shows 8 consecutive points above the median after a new ward-round format is introduced.
Answer: A shift (6 or more consecutive points on one side of the median) - a non-random signal suggesting the change is associated with improvement; continue measuring and check balancing measures (e.g. readmissions).