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Health economic analysis of service provision

Resources available in the health care system are limited and are exceeded by needs. Public health and long-term care expenditures have been rising steadily, relative to national income, for several decades. Currently, the costs of mental ill-health account for up to 14% of health spending in Organisation for Economic Co-operation and Development (OECD) countries, and this proportion is also expected to rise further. Decisions on how best to allocate scarce resources are therefore becoming increasingly prominent among health policy-makers with specific relevance to mental health services. This chapter summarizes the health economic methods used to inform the key questions of decision-makers in health care related to efficiency and equity. It provides an explanation of the underlying economic and analytical frameworks and gives a summary of the different techniques of health economic analyses, supported by a selection of recent relevant published examples from the mental health field.