Probability of Cost-Effectiveness
The likelihood, given uncertainty in the cost and effect estimates, that an intervention's ICER falls below a specified willingness-to-pay threshold.
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.
Producer Surplus
The difference between the price a producer receives and the minimum they would have accepted, the net benefit they gain from a transaction.
Producer Theory
The branch of microeconomic theory analysing how firms choose inputs and output levels to maximise profit given their costs and market conditions.
Production Possibility Frontier
A graph showing the maximum combinations of two goods or outcomes producible given a fixed set of resources and existing technology.
Productive Efficiency
A condition in which a given output level is produced using the minimum possible inputs, synonymous with technical efficiency.
Programme Budget
A budgeting approach that organises spending around specific programmes or services rather than departmental line items.
Proportional Shortfall
A measure of disease severity calculated as the proportion, rather than absolute number, of expected quality-adjusted life years lost to a condition.
QALY Calculation Method
The process of computing quality-adjusted life years by multiplying time spent in a health state by its utility value, then summing across states.
QALY Gain
The increase in quality-adjusted life years attributable to an intervention, the difference between the QALYs expected under it and its comparator.
Quality-Adjusted Life Year (QALY)
A quality-adjusted life year combines time lived with preference-based health-state values so that one year at utility 1 represents one QALY, while periods in poorer health contribute proportionately less—or negatively where the applicable value set permits states valued below dead.
Quality-Adjusted Time Without Symptoms
An oncology outcome measure, Q-TWiST, dividing survival into phases, such as toxicity, symptom-free time, and time after relapse, each weighted by quality of life.
Quick Ratio
A financial ratio calculated as current assets excluding inventory, divided by current liabilities, a more conservative liquidity measure than the current ratio.
Random Parameter Model
A discrete choice model that lets preference parameters vary randomly across individuals according to a specified distribution, rather than assuming identical preferences.
Reference Case
A reference case is a documented set of preferred methodological choices that an institution asks analysts to follow so economic evaluations are transparent, consistent and comparable for a defined decision context.
Responsiveness
The ability of a health outcome measure to detect a clinically meaningful change in health status over time when one has genuinely occurred.
Return on Assets
A financial ratio calculated as net income divided by total assets, showing how efficiently an organisation uses its assets to generate profit.
Return on Equity
A financial ratio calculated as net income divided by owner equity, showing the return generated on capital invested by an organisation's owners.
Return on Investment
A measure of an investment's profitability, calculated as the net gain from the investment divided by its cost.
Reynolds-Smolensky
An index measuring the redistributive effect of a tax or transfer system, calculated as the difference between pre-tax and post-tax income Gini coefficients.
Scale Efficiency
A measure of whether a provider is operating at its optimal size, distinct from whether it uses its current scale of inputs efficiently.