Are the benefits of new health services greater than their opportunity costs?
Laura Edney A B , Hossein Haji Ali Afzali A and Jonathan Karnon AA School of Public Health, University of Adelaide, Level 9, Adelaide Health & Medical Sciences Building, Adelaide, SA 5000, Australia. Email: hossein.hajialiafzali@adelaide.edu.au; jonathan.karnon@adelaide.edu.au
B Corrresponding author. Email: laura.edney@adelaide.edu.au
Australian Health Review 43(5) 508-510 https://doi.org/10.1071/AH18087
Submitted: 3 May 2018 Accepted: 28 September 2018 Published: 10 December 2018
Abstract
The Australian health system performs well compared with other developed countries, but there is potential for improved health outcomes through the consideration of the opportunity costs of funding new health services. The opportunity costs of funding a new health service are the benefits forgone from the activities that would be funded if the new health service was not funded. When the forgone activity cannot be observed directly, the expected opportunity costs have been estimated as the expected gain in quality-adjusted life years (QALYs) associated with marginal increases in government expenditure on health. We have previously estimated that a gain of 1 QALY is expected for every additional A$28 033 of government expenditure on health. This paper discusses the relevance and proposed use of this estimate of opportunity costs to inform decisions around the public funding of new health services in Australia.
Additional keywords: health policy, health services research, health systems, population health.
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