Absolute Shortfall
A measure of disease severity calculated as the difference between the quality-adjusted life expectancy of a healthy comparator population and that of untreated patients.
Encyclopaedia
Explore comprehensive, evidence-informed explanations of key health economics concepts, including their development, application and relationships to other concepts. Published entries are validated through human expert review.
Active Choice
A choice architecture approach requiring an individual to make an explicit selection rather than passively accepting a default.
Activity-Based Costing
A costing method that assigns overhead and indirect costs to services based on the actual activities that consume resources, rather than a simple volume measure.
Actuarial Projection
An estimate of future events, such as mortality, morbidity, or claims costs, based on statistical analysis of historical data patterns.
Adverse Selection
Adverse selection occurs when people use private information about their risk before an agreement to make participation or contract choices, causing those who select into a market or plan to differ systematically from the wider population.
Age Weighting
An early methodological adjustment to the DALY calculation valuing healthy years lived in young to middle adulthood more highly than years in childhood or old age.
Allocative Efficiency
A condition in which resources are distributed among competing uses to maximise total value, given fixed technical efficiency in production.
Atkinson Index
A measure of income or health inequality incorporating an explicit parameter reflecting society's aversion to inequality at the bottom of the distribution.
Average Cost-Effectiveness
A measure comparing an intervention's total cost to its total effect, without reference to an alternative comparator.
Average Cost-Effectiveness Ratio
The total cost of an intervention divided by its total health effect, calculated for each option rather than as a comparison.
Bargaining Theory
A branch of economic theory analysing how parties negotiate to reach a mutually acceptable agreement when their interests partly conflict.
Baumol Effect
A phenomenon in which wages in labour-intensive, low-productivity-growth sectors rise alongside wages in high-productivity sectors, driving up the labour-intensive sector's relative cost.
Benefit-Cost Ratio
The ratio of the monetised value of a programme's benefits to its costs, used as a summary measure in cost-benefit analysis.
Best-Worst Scaling
A stated preference method in which respondents identify both the most and least preferred items from a set, rather than ranking every item.
Bottom-Up Costing
A costing method that estimates total cost by measuring detailed resource use at the individual patient level and aggregating those measurements.
Break-Even Analysis
An analysis identifying the point at which the costs and benefits, or revenues, of an activity are equal.
Break-Even Point
The level of output or activity at which total revenue equals total cost, so an organisation neither gains nor loses money.
Breakeven Analysis
An analysis identifying the point at which total costs equal total revenues or benefits, so an activity neither gains nor loses value.
Budget Impact
The projected change in total spending for a payer or health system resulting from adopting a new treatment or policy.
Budget Impact Analysis
An assessment of how adopting a health technology or policy would change spending for a particular budget holder over a specified period.