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Health service efficiency - appraising the appraisers

By Tony J Culyer

Abstract

In this paper, I shall take a restricted view of the scope and limits of health economics, concentrating on that area which has, in Europe at least, been expandtng fastest in the last decade or so. I am going to focus, as implied in all I have said so far, on economic appraisal in health care. I want to argue that - on the decision-making approach - there are, to all intents and purposes, no limits and that the scope is, or can be, as wide as may be appropriate. Limitations of a sort there are, however. They are not limitations of feasibility or practicability; nor are they limitations of quantification or measurement. They are limitations mostly of imagination and of competence on the part of the analysts. What I propose to do is to review some of the empirical work that has been conducted in recent years (most of it British, for that is what I know best) in order to demonstrate bad and good practice, and how it is only bad practice and failures of imagination that limit the potential scope of economic appraisal - and, of course, its usefulness. The scope for the practice of appraisal is, of course, limited by the demand generated by our health care systems and, though I shall not say much about that here, I shall return to it at the end. For the purposes of tbis paper, appraisal includes studies that may use terms in their titles like 'investment appraisal', 'option appraisal', 'cost-effectiveness analysis', 'cost-utility analysis', or 'cost-benefit analysist. It excludes what in commercial circles is called 'financial appraisal'.

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