Chapter 12 Evaluating Health Care Efficiency

The purpose of this chapter is to suggest a general framework for assessing the efficiency of health care in general, and health care interventions specifically. We begin with a three-pronged overview of assessing performance in health care which begins with what we call the budget or cost side model relating budgets and costs to treatments. Next we proceed to describing an intermediate outputs specification which relates hospital resources to medical outcomes, and we conclude with a final outcomes model which relates the medical outcomes to patient health outcomes. The third model is illustrated with an application to data from Swedish cataract patients.