Estimating opportunity costs for the NHS, public health and social care

Project theme: Applied economic evaluation and policy analysis

An estimate of the marginal productivity of public expenditure on health and social care is important for a wide range of resource allocation decisions. It reflects the additional beneficial outcome that could be gained with additional resource. It also reflects the benefit foregone if resources are committed to a specific type of expenditure and removed from the overall discretionary budget, so reflects the opportunity costs of investing in specific projects.

The overall aim of the project is to use the firm foundation provided by existing work on the marginal productivity of NHS expenditure to strengthen these estimates and extend the analysis to include other categories of public expenditure. As well as developing and updating estimates of the effects of NHS expenditure, we will estimate the effects of public health and social care expenditure on health and other relevant outcomes.

Project team 

Karl Claxton, James Lomas, Steve Martin, Francesco Longo, Marta Soares, Mark Sculpher.


Karl Claxton

For previous work see Allocative efficiency 

Overview of recent work

DHSC seminar 17/3/22

EEPRU presentation for DHSC seminar 17/3/22

Related publications

Longo F., Claxton K., Lomas J., et al (2023), Is extending eligibility for adult social care better than investing more in existing users in England? A cross-sectional evidence for multiple financial years. BMJ Open;13:e070833. doi: 10.1136/bmjopen-2022-070833 

Longo, F., Claxton, K., Martin, S. & Lomas, J. (2023), More long-term care for better healthcare and vice versa: investigating the mortality effects of interactions between these public sectors. Fiscal Studies, 00, 1– 28. DOI: 10.1111/1475-5890.12322 

Martin, S., Claxton, K., Lomas, J. and Longo, F., (2023). The impact of different types of NHS expenditure on health: Marginal cost per QALY estimates for England for 2016/17. Health Policy, 132, p.104800. DOI: 10.1002/hec.3650

Soares MO, Sculpher MJ, Claxton K. Health Opportunity Costs: Assessing the Implications of Uncertainty Using Elicitation Methods with Experts. Medical Decision Making. 2020 May 1;40(4):448-459. 

Soares MO, Sculpher MJ, Claxton K. Authors' Response to: "Health Opportunity Costs and Expert Elicitation: A Comment on Soares et al." by Sampson, Firth, and Towse. Medical Decision Making. 2021 Feb 25. 272989X20987222. 

Lomas JRS, Martin S, Claxton KP. Estimating the marginal productivity of the English National Health Service from 2003 to 2012. Value in Health. 2019 Sep;22(9):995-1002. 

Martin S, Lomas J, Claxton K, Longo F. How Effective is Marginal Healthcare Expenditure? New Evidence from England for 2003/04 to 2012/13. Applied Health Economics and Health Policy. 2021 Jul 21. 

Martin, S., Claxton, K., Lomas, J. et al. How Responsive is Mortality to Locally Administered Healthcare Expenditure? Estimates for England for 2014/15. Appl Health Econ Health Policy (2022). 

Martin S, Lomas J, Claxton K. Is an ounce of prevention worth a pound of cure? A cross-sectional study of the impact of English public health grant on mortality and morbidity. BMJ Open. 2020 Oct 10;10(10). e036411. 

Martin S, Longo F, Lomas J, Claxton K. Causal impact of social care, public health and healthcare expenditure on mortality in England: cross-sectional evidence for 2013/2014. BMJ Open. 2021 Oct 15;11(10):e046417. 

Longo F, Claxton K, Lomas J, Martin S. Does public long-term care expenditure improve care-related quality of life of service users in England? Health Economics. 2021 Jul 27.