Estimating the Returns to United Kingdom Publicly Funded Musculoskeletal Disease Research in Terms of Net Value of Improved Health Outcomes
Published in: Health Research Policy and Systems, Volume 16, Issue 1 (2018). doi:10.1186/s12961-017-0276-7
Posted on RAND.org on November 08, 2018
Building on an approach applied to cardiovascular and cancer research, we estimated the economic returns from United Kingdom public- and charitable-funded musculoskeletal disease (MSD) research that arise from the net value of the improved health outcomes in the United Kingdom.
To calculate the economic returns from MSD-related research in the United Kingdom, we estimated (1) the public and charitable expenditure on MSD-related research in the United Kingdom between 1970 and 2013; (2) the net monetary benefit (NMB), derived from the health benefit in quality adjusted life years (QALYs) valued in monetary terms (using a base-case value of a QALY of £25,000) minus the cost of delivering that benefit, for a prioritization of interventions from 1994 to 2013; (3) the proportion of NMB attributable to United Kingdom research; and (4) the elapsed time between research funding and health gain. The data collected from these four key elements were used to estimate the internal rate of return (IRR) from MSD-related research investments on health benefits. We analysed the uncertainties in the IRR estimate using a one-way sensitivity analysis.
Expressed in 2013 prices, total expenditure on MSD-related research from 1970 to 2013 was £3.5 billion, and for the period used to estimate the rate of return, 1978-1997, was £1.4 billion. Over the period 1994–2013 the key interventions analysed produced 871,000 QALYs with a NMB of £16 billion, allowing for the net NHS costs resulting from them and valuing a QALY at £25,000. The proportion of benefit attributable to United Kingdom research was 30% and the elapsed time between funding and impact of MSD treatments was 16 years. Our best estimate of the IRR from MSD-related research was 7%, which is similar to the 9% for CVD and 10% for cancer research.
Our estimate of the IRR from the net health gain to public and charitable funding of MSD-related research in the United Kingdom is substantial, and justifies the research investments made between 1978 and 1997. We also demonstrated the applicability of the approach previously used in assessing the returns from cardiovascular and cancer research. Inevitably, with a study of this kind, there are a number of important assumptions and caveats that we highlight, and these can inform future research.Keywords: Medical research investment, QALYs, Musculoskeletal disease, Medical research charities, Value of health, Rate of return, Elapsed time, Research payback.