Maximising the benefit to any resource expenditure (funds, expertise, time, etc), or minimising the cost of any achieved benefit.


The value in today’s terms of future costs or benefits (after discounting).

Sensitivity analysis

A process through which the robustness of an economic model is assessed by examining the changes in results of the analysis when key variables are varied over a specified range.

Quality-adjusted life years (QALYs)

Calculated by adjusting the estimated number of life-years an individual is expected to gain from an intervention for the expected quality of life in those years. The quality of life score will range between 0 for death, to 1 for... Read more


The point of view from which an analysis is carried out. The NHS perspective considers costs and benefits from the point of view of the healthcare system.

Health economics

The study of how scarce resources are allocated among alternative uses for the care of sickness and the promotion, maintenance, and improvement of health. This includes the study of how health care and health-related services, their costs and benefits, and... Read more


The mathematical procedure for adjusting future costs and outcomes of health‐care interventions to “present value”; this adjusts for differences in the timing of cost (expenditure) compared to health benefits (outcomes).


The need, ability, and willingness to pay for a commodity.