Health opportunity costs

The net benefit of a health programme is defined as the benefits it generates minus its opportunity costs. Accounting for opportunity costs—the value of resources in their most highly valued alternative use—is an essential part of economic evaluation. This chapter discusses the role of health opportunity costs in equity-informative economic evaluation and describes some approaches to quantifying both total health opportunity costs and their distribution.

Alternative methods are proposed where data availability is limited, emphasizing careful consideration of the funding context along with scenario analyses to examine the implications of alternative levels and patterns of health opportunity cost.