Generic preference-based measures: how economists measure health benefit

Resources are always scarce, but the possible uses of these resources are limitless. This simple observation underlies much of what economists do. It leads to competing demands from different parties and requires individuals and organisations to make choices about their use of scarce resources. The primary purpose of economics is to help us understand how decisions about the distribution of scarce resources are made and to identify optimal decisions. It shouldn’t take too much of an intellectual leap to see how adopting an economist’s perspective might contribute to the improvement of patient care and health outcomes. The process of evaluating health care interventions is well-established, with the randomised controlled trial maintaining its place as the gold standard method. A crucial decision that must be made in figuring out if an intervention works is which indicator should be used. The purpose of the intervention might be to reduce mortality, improve functioning or prevent falls. It could be all three. If the intervention produces an improvement in these indicators it is probably of value – but of what value? How do we value this intervention? And why might we want to?