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Health Opportunity Costs (Estimating health opportunity costs in the NHS and other health care systems)


Contacts: Karl Claxton, James Lomas, Jessica Ochalek

The expected costs and health effects of health care interventions are often summarised as cost effectiveness ratios. These provide a useful summary of how much additional resource is required to achieve a measured improvement in health, or how much health is delivered for an amount of additional resource. Whether an effective intervention will improve health outcomes overall requires a comparison with the likely health opportunity costs, i.e. the improvement in health that would have been possible if any additional resources required had, instead, been made available for other health care activities. These health opportunity costs are the amount of health that a health care system currently delivers with more or less resources, so what is required are estimates of the health effects of changes in health expenditure. An assessment of the likely health opportunity costs in different health care systems means that evidence of the effectiveness and cost of an intervention can better inform decisions.  Most importantly, it ensures that decisions improve rather than reduce health outcomes overall.  

  1. Methods for estimation of the NICE cost-effectiveness threshold 
  2. Linking the effects of expenditure on mortality burden of disease to QALYs
  3. Re-estimating health opportunity costs in the NHS
  4. Estimating health opportunity costs for LMICs
  5. Estimating health opportunity costs for high income countries 
  6. Informing pricing decisions



Claxton K, Lomas J, Martin S. The impact of NHS expenditure on health outcomes in England: Alternative approaches to identification in all-cause and disease specific models of mortality. Health Economics 2018;27(6):1017-1023.

Lomas J, Claxton K, Martin S, Soares M. Resolving the ‘cost-effective but unaffordable’ ‘paradox’: estimating the health opportunity costs of non-marginal budget impacts. Value in Health 2018;21(3):266-275.

Ochalek J, Lomas J, Claxton K. Estimating health opportunity costs in low- and middle-income countries: a novel approach and evidence from cross-country data. BMJ Global Health 2018;3(6):e000964.

Thokala P, Ochalek J, Leech A, Tong T. Cost effectiveness thresholds: the past, the present and the future. PharmacoEconomics 2018;36(5)509-522.