Assessing health opportunity costs for the Indian health care systems

The economic evaluation of health care interventions including new health technologies such as branded pharmaceuticals requires an assessment of whether the improvement in health outcomes they offer exceeds the improvement in health that would have been possible if the additional resources required had, instead, been made available for other health care activities. Therefore, some assessment of these health opportunity costs is required if the best use is to be made of the resources available for health care. This report provides a brief review of the literature on the assessment of health opportunity costs, outlines how existing estimates of the effect of changes in health expenditure on mortality, as well as survival and morbidity, can be used to provide some initial assessment of the possible health opportunity costs associated with additional health care costs for the different states of India. The resulting estimated range for India is 14,116 to 22,275 2015 INR (223 to 351 2015 USD). Estimated ranges for the states range from 4,747 to 7,338 2015 INR (75 to 116 2015 USD) for Bihar to 27,370 to 42,701 2015 INR (432 to 673 2015 USD) for Himachal Pradesh and higher for Delhi. This wide range of possible estimates based on existing work are discussed and some suggestions are made of how further research could provide estimates that more closely reflect evidence of the health effects of health care expenditure in the Indian states.