Economic Perspective and Opportunity Cost

Definition and scope

The specification of whose resource use and outcomes count in an economic evaluation, and the value of resources or health displaced when an alternative is chosen. The target population, use, and analysis remain protocol decisions; this card explains the choices and their consequences rather than approving a study.

Operational specification

Name the health-system, payer, patient, employer, or societal perspective, relevant decision authority, population, horizon, comparator, and included cost/outcome categories. Distinguish transfer payments from consumed resources, financial affordability from cost-effectiveness, and a willingness-to-pay scenario from a health-opportunity-cost threshold.

Analysis and diagnostics

Construct a perspective-specific resource inventory, identify excluded spillovers and potential double counting, and show alternative perspectives when relevant. Translate net monetary benefit to net health benefit only with an explicit threshold and unit convention. Report who bears costs and who receives health gains; aggregate efficiency does not establish equity.

When NOT to use and common errors

Do not call an evaluation societal while omitting relevant nonmedical effects without explanation. Do not count the same caregiver or productivity effect both in utility and monetary benefits without justification. A lower budget spend is not necessarily a lower opportunity cost.

Worked example and implementation boundary

A synthetic intervention adds 0.1 QALYs at an incremental health-system cost of 3000. At an explicitly illustrative threshold of 50000 per QALY, calculate net health benefit. Illustrative net health benefit is 0.04 QALYs per patient at the stated threshold. The threshold is an assumption, not a universal standard. The code performs that explicitly stated calculation with synthetic inputs. It is not a complete fitted analysis and does not demonstrate the identification assumptions, estimate sampling uncertainty, or certify application in another population.

Data-source and reporting requirements

Preserve the provenance, dates, units, and observation rule for each input. Claims capture services and transactions under observable benefits; absence of a record is not proof that an event or resource use did not occur. EHR and registry measurements depend on the collection process and may miss care outside the system. Linked sources add reconciliation and selection questions. Primary collection can improve a missing domain but still requires valid measurement and follow-up. Report which of these limitations affects the stated use, which evidence supports the chosen inputs, and what remains uncertain.

Worked example

Scenario

A synthetic intervention adds 0.1 QALYs at an incremental health-system cost of 3000. At an explicitly illustrative threshold of 50000 per QALY, calculate net health benefit.

Dataset

Synthetic inputs with units defined in the scenario; no patient data.

Steps

Result

Illustrative net health benefit is 0.04 QALYs per patient at the stated threshold. The threshold is an assumption, not a universal standard.

Trade-offs

Code example

delta_qaly = 0.1
delta_cost = 3000
threshold = 50000
result = delta_qaly-delta_cost/threshold
assert abs(result - 0.04000000000000001) < 1e-9
print(result)

delta_qaly <- 0.1
delta_cost <- 3000
threshold <- 50000
result <- delta_qaly-delta_cost/threshold
stopifnot(abs(result - 0.04000000000000001) < 1e-9)
print(result)

Citations

1. [1]Husereau D, et al. Consolidated Health Economic Evaluation Reporting Standards (CHEERS) 2022 Explanation and Elaboration: A Report of the ISPOR CHEERS II Good Practices Task Force. Value in Health. 2022.
2. [2]Caro JJ, et al. Modeling Good Research Practices—Overview: A Report of the ISPOR-SMDM Modeling Good Research Practices Task Force-1. Value in Health. 2012.