title: Opportunity costs and local health service spending decisions: a qualitative study from Wales.
abstract: BACKGROUND
  All health care systems face the need to find the resources to meet new demands such as a new, cost-increasing health technology. In England and Wales, when a health technology is recommended by the National Institute for Health and Care Excellence (NICE), the National Health Service (NHS) is mandated to provide the funding to accommodate it within three months of publication of the recommendation. Identifying what, in practice, is foregone when new cost-increasing technologies are introduced is important for understanding the effects of health technology assessment (HTA) decisions on the NHS or any other health care system. Our objective was to investigate how in practice local NHS commissioners in Wales accommodated financial "shocks" arising from technology appraisals (TAs) issued by NICE and from other cost pressures.
  
  
  METHODS
  Semi-structured interviews were conducted with Finance Directors and Medical Directors from all seven Local Health Boards (LHBs) in NHS Wales. These interviews covered prioritisation processes, as well as methods of financing NICE TAs and other financial shocks at each LHB. We then undertook a systematic identification of themes and topics from the information recorded. The study relates to the period October 2010 to March 2013.
  
  
  RESULTS
  The financial impact of NICE TAs is generally anticipated and planned for in advance and the majority of LHBs have contingency funds available to cope with these and other financial shocks within-period. Efficiency savings (defined as reductions in costs with no assumed reductions in quality) were a source of funds for cost pressures of all kinds. Service displacements were not linkable to particular NICE TAs and there appears to be a general lack of explicit prioritisation activities. The Welsh Government has, on occasion, explicitly or implicitly acted as the funder of last resort.
  
  
  CONCLUSIONS
  Services may be displaced as part of a response to the cumulative impact of all types of cost pressures, including cost-increasing health technologies recommended by NICE, but such displacements were not direct responses to the publication of individual NICE TAs. The additional cost pressure represented by a new NICE TA is likely to be accommodated at least partly by greater efficiency and increased expenditure rather than displacement of services.
authors.affiliation: Office of Health Economics, 7th Floor, Southside, 105 Victoria Street, London, SW1E 6QT, UK. sschaffer@ohe.org.
authors.forename: Sarah
authors.initials: S
authors.lastname: Karlsberg Schaffer
authors.affiliation: RAND Europe, Westbrook Centre, Milton Road, Cambridge, CB4 1YG, UK.
authors.forename: Jon
authors.initials: J
authors.lastname: Sussex
authors.affiliation: Centre for Health Economics and Medicines Evaluation, Bangor University, Ardudwy, Normal Site, Holyhead Road, Bangor, North Wales, LL57 2PZ, UK.
authors.forename: Dyfrig
authors.initials: D
authors.lastname: Hughes
authors.affiliation: Office of Health Economics, 7th Floor, Southside, 105 Victoria Street, London, SW1E 6QT, UK.
authors.forename: Nancy
authors.initials: N
authors.lastname: Devlin
mesh_terms: D000047:Academies and Institutes; D003362:Cost-Benefit Analysis; D003659:Decision Making, Organizational; D017048:Health Care Costs; D006296:Health Services / Q000191:economics*; D006801:Humans; D007407:Interviews as Topic; D036301:Qualitative Research; D013222:State Medicine / Q000191:economics*; D013673:Technology Assessment, Biomedical / Q000191:economics*; D014852:Wales
keywords: All Wales Medicines Strategy Group; Cost-effectiveness; Health technology assessment; National Health Service; National Institute for Health and Care Excellence; Opportunity cost; Priority setting