Cost (direct, indirect)

Direct costs include the value of all goods, services, and other resources that are consumed in the provision of an intervention or in dealing with the side effects or other current and future consequences linked to it. These costs are often thought of as involving—or potentially involving—a monetary transaction. Indirect costs refer to productivity gains or losses related to illness or death (Luce, 1996, pp. 178-179).

Cost, Economic Cost

The amount paid or payable for the acquisition of materials, property, or services. Economic cost is defined as the minimum payment necessary to keep a resource in its present employment.

Cost, External

Costs not directly assumed by the entity that owns and operates a product or service.

Cost, Internal or Private

A direct effect, either positive or negative, on profit or welfare arising from a person’s or institution’s activity.

Cost, Productivity

Costs that are associated with morbidity and mortality, excluding the intrinsic value of health (Luce, 1996, p. 178).

Cost-Benefit Analysis

Comparison of benefits measured in terms of monetary value and costs of a medical intervention in order to determine whether it is worth doing (Sloan, 1995a, p. 3).

Cost-Effectiveness Analysis

Measurement of benefits in terms of some stan-dard of clinical outcome or effectiveness, such as mortality rates, years of added life, or quality-adjusted life years compared to the costs of a medical intervention to establish whether or not the intervention is merited (Sloan, 1995a, p. 3).


A general term referring to any long- or short-term reduction of a person’s activity as a result of an acute or chronic condition.

Efficiency, Economic

The “right” goods are being produced.

Efficiency, Technical

Technical efficiency is achieved when, for a given output, the amount of inputs used is minimized or when, for a given combination of inputs, the output is maximized (Culyer, 1991, p. 66).


A legal obligation on the federal government to make payments to a person, business, or unit of government that meets the criteria set in law. Congress generally controls entitlement programs by setting eligibility criteria and benefit or payment rules—not by providing budget authority in the appropriation act (CBO, 2002).

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