Efficiency in health care: connecting economic evaluations with implementation objectives

Economic evaluations are helpful for efficient resource use. This paper aims to clarify the relationship between economic evaluation methods and two types of health care efficiency, aiding implementation scientists in selecting the appropriate approach for their research.

We clarify the connection between cost-effectiveness analysis (CEA) and allocative efficiency, and explain how budget impact analysis (BIA) more closely connects with productive efficiency. We also discuss other methods that researchers can use to analyze an organization's productive efficiency, given increasing pressure for health care organizations to be efficient.

Allocative efficiency seeks to maximize social welfare through optimal resource distribution. Productive efficiency focuses on an organization's ability to maximize its output given its resource constraints. CEA, particularly when incorporating a societal perspective, assesses allocative efficiency. BIA, which often has a short time horizon and more focused perspective, assesses productive efficiency. When organizational leaders ask implementation scientists for an economic evaluation, it is important to determine whether they want a CEA or a BIA, given they answer different questions, often employing different methods. We also present other methods for measuring efficiency and causes of inefficiency stemming from fixed costs, scale, scope, regulations, labor, and decision-making.

Implementation scientists must recognize that CEA and BIA serve distinct purposes and are not interchangeable. Choosing the right economic evaluation tool is crucial for answering specific research questions and building research teams. Future implementation work will also need to measure efficiency so that it is sustainable.