ABSTRACT
Economic appraisal consists of methods for formulating problems of choice, and for identifying and organizing the data required to aid decision-making. In health care it is concerned with the explicit specification and examination of different options with a view to assisting choice; with the systematic analysis of the costs and consequences of the different ways of achieving competing objectives; and with judgements about how to allocate scarce resources among competing ends. Land, labour, and capital resources are consumed by health care in order to produce improvements in health. Health care may be conceptualized as a commodity, albeit with some unusual and interesting characteristics, and its consequences may be categorized and measured as: health effects, in natural units; benefits associated economic benefits; and utilities satisfaction with health effects. The measurement of health care effects is principally a matter of medical and epidemiological concern.
