Written by Abby Paine and Dom Partridge
This is our third year celebrating National Numeracy Day, and this year’s theme of money is especially relevant for those of us working in health economics and market access.
In previous years, we’ve looked at the role of women in maths and introduced you to network meta-analyses. Today, we’re focusing on how numeracy underpins the decisions that healthcare systems make every day.
Why numeracy isn’t just about household finances
According to a December 2024 YouGov survey, nearly a third of United Kingdom (UK) adults (32%) said that better money management was their main motivation for improving their numeracy skills.
National Numeracy Day focuses on personal budgeting, but for those of us in the world of health economics, we are constantly thinking about how to provide robust evidence to inform whether new treatments should be recommended for National Health Service (NHS) use, recognising that every investment comes with an opportunity cost in a system with finite resource.
Understanding NHS spending: where the billions go
In 2023/24, the UK’s Department of Health and Social Care spent £188.5 billion, a figure projected to rise to £192 billion in 2024/25. That money funds everything from General Practitioner (GP) services and ambulance fleets to mental health care, hospital services, and new treatments, with the largest area of day-to-day expenditure being staff costs at about 49%. Although these examples focus on NHS healthcare services, social care also accounts for a significant proportion of public spending.
When you divide this across the UK’s population (~69 million people), it equates to just £2,500–3,000 per person per year.
The figure below presents some examples of what £1 billion in healthcare spending could buy.
£1 billion could…
For a system like the NHS—free at the point of use—making each pound count is crucial. So how do we ensure treatments offer meaningful clinical benefit and represent good value for the NHS?
The role of NICE in value-based decision making
One way the NHS ensures that treatments provide both clinical benefit and value for the wider health system is by considering the recommendations from the National Institute of Health and Care Excellence (NICE). Since 1999, NICE has provided independent guidance for England and Wales’ health and care systems through its Technology Appraisal (TA) and Highly Specialised Technologies (HST) programmes. As part of this, it assesses whether new medicines and treatments are both clinically effective and cost effective before recommending them for use in the NHS, helping to ensure that resources are used fairly and efficiently.
Here at Source, part of our work is to qualitatively and quantitatively support companies to provide relevant evidence to NICE inform decisions about whether a medicine:
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- Extends life
- Improves quality of life
- Represents good value compared with currently used treatments.
Behind the numbers: QALYS, costs, and ICERs
To help make that decision a bit easier, we rely on measures such as:
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- Quality-adjusted life years (QALYs) – a measure that combines quantity and quality of life data
- Costs – for new and currently used treatments
- Incremental cost–effectiveness ratio (ICERs) – which represent the cost per QALY gained:
ICERs can be compared with those of other interventions or treatments, or with a threshold value of what is considered to be cost-effective; interventions with an ICER below this threshold are more likely to be funded, though NICE also considers other factors such as disease severity, innovation, and uncertainty.
NICE generally considers treatments with an ICER of up to around £30,000 per QALY to be a cost-effective use of NHS resources. While not a fixed threshold, this helps support consistent decision making, so that resources are broadly spent to deliver similar value across different treatments, diseases, and patient groups.
So next time you attend a medical appointment or are prescribed a treatment, maybe spare a thought for all the maths that has gone into deciding whether the treatment is good value for money for the NHS!
If you are interested in exploring a career in health economics and market access, consider connecting with the Economic Modelling and Data Analysis team at Source Health Economics; we specialise in evidence generation, health economics, and communication.
