Net Present Value
Net present value (NPV) is an option's discounted monetary benefits minus its discounted costs, used to appraise health service investments.
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.
Concepts, entries and ontology terms
A concept page is a published entry on the wiki. Some concepts also have a full encyclopaedia article. The Health Economics Ontology (HEO) holds every concept, including dictionary terms without an article, so it is larger than the list of published pages. The knowledge graph shows how concepts relate to each other.
Nominal Scale
Nominal scale is a level of measurement whose numbers only name categories, such as trial arm or EQ-5D dimension, so counts are valid but averages are not.
Normative Economics
Normative economics is the branch of economics that ranks policies by stated criteria of what ought to be, such as maximising health from an NHS budget.
Opportunity Cost
Opportunity cost is the value of the best alternative given up when a resource is put to one use; in health care, usually health lost elsewhere.
Optimal Taxation
Optimal taxation is the branch of welfare economics that designs taxes to maximise social welfare given revenue needs and behaviour, as with tobacco taxes.
Ordinal Scaling
Ordinal scaling ranks health states or responses, such as EQ-5D levels, with unknown gaps, so medians are meaningful but sums and means of codes are not.
Ordinal Utility
Ordinal utility is utility that records only how a person ranks options, such as two treatments, not how much one option is preferred to another.
Orthogonal Design
An experimental design for a choice experiment in which attribute levels are varied independently, so each attribute's effect on preference can be separated statistically.
Paradox of Voting
The paradox of voting is a social choice problem in which majority votes on three or more health options cycle though each voter ranks them consistently.
Pareto Efficiency
Pareto efficiency, or Pareto optimality, is a state where resources such as a health budget cannot be reallocated to help anyone without harming someone.
Pareto Frontier
The set of feasible options that are not dominated by another option that is at least as good on every specified objective and strictly better on at least one.
Pareto Improvement
A Pareto improvement is a change, such as a reallocation of a health budget, that makes at least one person better off and nobody worse off.
Partial Economic Evaluation
A partial economic evaluation studies costs alone, outcomes alone, or one option's costs and outcomes without a comparator, so cannot show value for money.
Patient Time Cost
Patient time cost is the value of the hours patients spend travelling to, waiting for and receiving health care, often valued at a wage rate.
Pecuniary Externality
A pecuniary externality is an externality that works through prices, as when NHS demand raises agency rates other buyers pay, shifting money to sellers.
Person Trade-Off
Person trade-off (PTO) is a valuation method asking how many people helped one way equal a set number helped another, giving social values for health care.
Perspective
Perspective in health economic evaluation is the viewpoint, such as the health system, payer or society, that decides which costs and outcomes are counted.
Pigouvian Subsidy
A Pigouvian subsidy is a payment for an activity that benefits others, set equal to its marginal external benefit at the socially efficient level.
Pigouvian Tax
A Pigouvian tax is a tax on an activity that harms others, set equal to its marginal external cost at the efficient level of that activity.
Point Allocation Method
The point allocation method asks respondents to divide a fixed total of points, often 100, among health outcomes or criteria to show their relative value.