ABSTRACT

To measure opportunity cost, we need to know the context in which choices are made. Good costing exercises start from a clear understanding of how current or potential services operate, what resources are used solely for particular groups of patients, which are

Box 10.1 Opportunity Costs or Health Service Costs? Suppose we are interested in maximising the health effects achievable from the health service budget. This implies that we are not interested in costs to patients, or in adjusting financial costs to reflect underlying social costs. We are interested in whether or not AIDS treatment is better carried out in patients’ homes or in hospitals and we discover that the following matrix of costs and benefits applies.