Economic appraisal in health care with particular reference to hospice and palliative care

This paper provides an outline of the main principles of economic appraisal in health care, illustrating these by reference to hospice and palliative care programs. A specific distinction is made between "cost-saving" and "economic efficiency", the latter being concerned with making choices which maximise the net benefit to society from available resources. The three essential stages of assessing costs and benefits of health care alternatives, namely enumeration, measurement and explicit valuation, are discussed. A recent study in Perth has found that the costs of an extensive GP based hospice program are no greater than if the patient had gone to hospital and that a variety of additional benefits are derived, not least being increased choice for the patient and their family.