Commentary: possible road to efficiency in the health service.

Abstract

The NHS at last seems ready to use economics as a framework for setting priorities. Cohen points to two main reasons why this is the case. Firstly, the advent of the purchaser-provider split has, among other things, led to a clearer definition of roles; explicit priority setting is now less easily avoided by purchasers. Secondly, some sensible person in the Welsh Office has offered guidance on how to set priorities. This process requires the use of economics techniques. Will England and Scotland follow suit? The data free environment of the NHS should not prevent the use of economics as a framework within which less tangible costs and benefits are included alongside those which are tangible. This allows explicit observation of the trade offs made as a result of decisions to expand or contract a service. Cohen's work is an important example of such use of the economic framework. The economics approach is not, however, free of problems. Marginal analysis takes time. A team approach is required, with a change in focus from firefighting to more considered analysis carried out in enough time to be relevant to setting contracts. Marginal analysis …