Estimating health opportunity costs for high income countries 

Overview

Contacts: Karl Claxton, Jessica Ochalek

The concept of opportunity cost is one of the most fundamental in economics. In practice, the opportunity cost of decisions made in healthcare can take a number of forms in terms of the health losses from: patients not receiving displaced services; patients not receiving additional services that could have been provided with the same resources; and patients losing access to services when insurance coverage becomes unaffordable.

Quantifying these health losses, or estimating health opportunity costs, requires econometric analysis to identify the production of health by healthcare activity that is observed to be marginal. To date, work has been published for the context of the UK NHS, but more and more national decision-makers and government agencies in other countries have expressed interest in incorporating these kinds of estimates into healthcare decision-making.

Research is ongoing at CHE that attempts to provide estimates through the use of cross country data. Work at other research institutions is being undertaken toward estimating values for Spain, the Netherlands and Australia among others. This page serves as a hub for these closely related areas of work (see Publications tab, which will be periodically updated).