In health economics efficiency refers to either obtaining the greatest health benefit from interventions using the available resources, or achieving a given health benefit in a way that minimises costs/resource use.  A distinction is often made between technical efficiency and allocative efficiency.  Technical efficiency concerns how best to achieve a single, given, objective: for example, how can a procedure such as a coronary artery bypass graft (CABG) be undertaken to achieve the best outcome for patients in terms of quality-adjusted survival? Alternatively, how can a CABG be successfully performed by making the best use of the resource inputs (hospital staff and theatre time, diagnostic work-up, medications, follow-up care…)?  Allocative efficiency concerns competing objectives, which may not all be capable of implementation: whether to implement a particular intervention (and if so how much), given competing demands on the health care budget? What mix of interventions delivers the greatest health gain?  For example, should we expand the use of CABG to a new group of patients, or should we invest in a new screening programme for patients at risk of coronary artery disease?  Opportunity cost is a key concept in making judgements about allocative efficiency, often represented in health technology assessment by a willingness to pay threshold.


How to cite: Efficiency [online]. (2016). York; York Health Economics Consortium; 2016.