Productivity Costs in Economic Evaluations
2012
The increase in health expenditures has raised important questions about
the appropriate height of health care spending as well as the justification of
these expenditures. One tool in the search of ensuring the optimal allocation
of scarce societal and health care resources is economic evaluation of health
care interventions, such as new pharmaceuticals, diagnostics or preventive
measures. In economic evaluations, the costs of an intervention are compared
to its benefits, expressed in some meaningful manner. Consistently applying
these evaluations, in theory, would ensure an optimal level of spending in the
health care sector (that is, the size of the budget, or how much to spend on
health) as well as an optimal use of the available resources within the budget
(that is, on what the budget is spent). This optimal spending can be defined in
light of the twin goals of health care policy; efficiency and equity. As such,
economic evaluations can be seen as applied welfare economics, aimed at informing
social choices to come to a maximization of broadly defined welfare.
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