What Values Should Count in Value Based Pricing for the NHS - UCL

assume that all cases will be of this nature, and so some other approach will be necessary to
supplement it.
VII.B.3. The judicial model: Coherence in legal reasoning
One area in which value disputes are regularly resolved is that of legal, and more precisely, judicial
reasoning. Many cases go to court precisely because there is a clash of values, or a disagreement
about which of several reasons has higher weighting. Courts do not have a formal algorithm for
settling disputes: they do not try to maximize economic value, for example, even if it is true that a
good deal of commercial law exists in order to facilitate ease of trade. Yet courts seem to have
achieved a situation in which judgements can be recognised as good or bad (and subject to appeal)
and as following rational methods, of argument, evaluation and use of precedent. This seems a
promising line of investigation for further development of MCDA given the difficulties outlined for
purely formal methods.
VII.B.4. Conclusion to Next Steps for Phase II: Algorithms versus Deliberation
Much of the critical literature on VBP and in the wake of the Kennedy report focuses on the idea that
many of the values, social values in particular, are perhaps vague and difficult to quantify. As a
consequence there is skepticism about making fair, transparent and accountable decisions with such
social values. Kennedy claims that attempting to make precise social values would be an “exercise in
spurious numerical (un)certainty” (Kennedy 2009). The fear is that incorporating such values will
inevitably be ad hoc.
The response to such fears is partly to admit the problem. Values of equity, compassion, efficiency,
desert, and the like, are certainly difficult to quantify and trade off. But there is a standard reply that
if such values are to be traded off it is all the more important that effort be put into doing so well,
and not just “taken into account”. Otherwise the “difficult to quantify” values will be overlooked and
those values which are more amenable to quantification will be included to the detriment of other
values.
Another issue we do not address here but will be crucial for further work will be the trade‐off
between the completeness of a list and the information required to make valuations on each value
against the need for simplicity in implementation and perhaps also for accountability. Of course in
an MCDA there is already trading off between issues of implementation/feasibility, transparency,
completeness and public accountability.
VII.C. Practical Questions for Phase II
In the Department of Health’s consultation on value‐based approach to pricing, a pricing
methodology is outlined in which, in the first instance, the cost‐per‐QALY of the treatment under
consideration is calculated and then various adjustments for such things as ‘burden of illness’ and
‘innovation’ are then introduced to provide justifications for higher cost thresholds (p. 13).
While this has considerable merit of simplicity and continuity, it is worth noting that there are at
least two methodological issues in need of discussion.
First, the proposed methodology takes the notion of the QALY as unproblematic. However the
potential move to MCDA provides the opportunity to look again at the two elements of the QALY –
life extension and health improvement – and to consider whether they should be traded off
according to the constant function assumed within the QALY methodology. There is an empirical
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