Avoiding Opportunity Cost Neglect in Cost-Effectiveness Analysis for Health Technology Assessment

Despite being a fundamental tenet of economic analysis there is a lack of clarity regarding the relevance of opportunity costs to cost-effectiveness analysis for health technology assessment. We argue that this is due, in part, to the importance of the decision context in understanding the nature of opportunity costs. Taking the example of the National Institute of Health and Care Excellence (NICE) on behalf of the National Health Service (NHS) in England and Wales, we explore the implications of existing discrepancies between policy thresholds and emerging empirical evidence of health opportunity costs. In particular, we consider analysts communicating the results of cost-effectiveness analysis, and recommend that analysts provide analysis according to both the policy threshold and the latest empirical evidence until the discrepancies are better understood or resolved. A number of conceptually related, but distinct, issues are discussed and clarified.