Decision Making in Health

We all make decisions. Some decisions are small that we make without thinking, others are large and can have a big impact on our lives. Health systems are no different. Some of the biggest decisions that must be made within health systems are around how to spend the health budget. For example, should more money be spent on health workers to visit new mothers and their babies in their home or on new equipment in hospitals to allow more patients to be treated? People within health systems need to make many decisions like this, and these decisions will have big consequences. Most importantly, these decisions are unavoidable.

If people within health systems need to make important decisions about how to spend their budgets, they need to work out the expected clinical effect of using different health treatments or services, and how much it is likely to cost to achieve that clinical effect in their local health system. Working out the costs and effects of health treatments or services is called determining value. When people know the value of the different options, then decision making becomes easier and money is more likely to be spent in the best way possible.


Methods for Determining Value

Some decisions that need to be made within health systems are very complicated, and working out the value of the different options involves many different types of information about the costs of different options and also the expected clinical advantages and risks. When researchers are making these calculations, they need to know what information should be included and how it should be analysed. For example:

  • When we calculate the cost of a treatment, should we only include the cost to the hospital for providing the treatment, or should we also include the cost to the patient to get to the hospital?
  • How should we measure the clinical effect – should we use number of patients treated, number of lives saved, or improvement in patients’ quality of life? Or maybe some kind of combination measure?

The way that researchers conduct their analysis is called the method. It is important that the method used produces information that is reliable and relevant to the people making decisions for the local health system.


A Reference Case

Given the importance of using methods that are relevant and useful to decision makers in the local health system, many countries and institutions have produced guidance for researchers on what methods to use. For example, the National Institute for Health and Care Excellence (NICE) in England has outlined what methods should be used to calculate value when they are deciding which health treatments or services should be made available by their National Health Service. The World Health Organisation (WHO) also has a set of methods for calculating the value of medicines to help them make recommendations to countries about which medicines to make available.

A standard set of methods like those used by NICE and WHO is often called a reference case. A reference case gives the decision maker some assurance that researchers use relevant and reliable methods when determining the value of a treatment or health service, but it also means the decision maker has a better chance of being consistent when making decisions because he or she knows that value has been calculated in the same way for each decision.


Developing the Reference Case

In 2013, the Bill and Melinda Gates Foundation (BMGF) asked NICE International to convene a team to develop a reference case that would be available for global development partners, researchers and policy makers around the world. The challenge when developing the Reference Case is that it needed to enable research that could be useful to decision makers at a local, national and international level, and that it would be applicable to different types of health technology – including individual medicines and diagnostics, public health initiatives and programs and different types of health service delivery. This meant that the Reference Case needed to be different to reference cases used by countries such as England or even by the World Health Organisation.

Developing the Reference Case involved many individuals and groups, including researchers, methodological experts, and people involved in decision making in health. Key partners included the University of York, England, and the Health Intervention and Technology Assessment Program, Thailand.

Read more here about early development and discussion of the Reference Case.


Finding a Balance – the Principle-Based Approach

The Reference Case takes a principle-based approach. This means that instead of being very detailed about every aspect of how a researcher should calculate the value of a treatment or health service, the Reference Case outlines principles that a researcher should follow when deciding how to make their calculations. For example, the Reference Case does not specify exactly which costs should be included in or left out of calculations, but requires researchers to identify all relevant direct costs, using local experience and knowledge of where a treatment might be used in the health service. In this way, the Reference Case strikes a balance between being too specific and allowing flexibility so that it can be used by researchers to provide information to many different decision makers in health systems around the world.



Sometimes when researchers and organisations are doing complicated analysis and planning, it is easy to lose sight of the people whom the health service is meant to serve. The principles in the Reference Case have been chosen with the people who will use the health service in mind, meaning that if the researcher follows the Reference Case principles, they will be providing decision makers with the information that will allow them to make good decisions for their local populations.