The Role of Economics in Health Care Evaluation

Summary

As pressure increases in many Western countries to contain health service costs and restrict growth of health care expenditure, so policy and decision-makers need to make use of the techniques of economics in analysis, evaluation, and planning. This paper outlines some of the more important methods of economic evaluation, and illustrates how their use may assist the process of improving resource allocation and resource use in the health care sector. In particular, the techniques of cost-effectiveness analysis and cost-benefit analysis are considered. The paper concludes with some comments on the problems of applying these techniques, and notes that their routine application will depend upon changes in the way relevant information is collected and presented.