Efficiency

In health economics, efficiency refers to either maximising health benefits from available resources or achieving a specific health benefit in a way that minimises costs or resources. It encompasses two main types, technical and allocative efficiency:
1. Technical efficiency focuses on achieving a single given objective in the best possible way. This can mean optimising outcomes from an intervention (e.g. maximising quality-adjusted survival from a coronary artery bypass graft [CABG]) or minimising resource use to achieve a successful outcome (e.g. performing a CABG with optimal use of staff, theatre time, and medications).
2. Allocative efficiency concerns the optimal distribution of resources across competing objectives, where all objectives may not be capable of implementation. It addresses questions of which interventions to fund (and to what extent) to yield the greatest overall health gain within a budget. For example, deciding whether to expand CABG to a new patient group or invest in a new screening program for coronary artery disease. Opportunity cost is a central concept for judging allocative efficiency, often represented in health technology assessment by a willingness-to-pay threshold.