In response to the sizeable proportion of national income devoted to the health care sector, policy makers in most high-income countries have become increasingly concerned with improving the efficiency of the health care sector. Meanwhile, econometricians, statisticians and management scientists have been developing increasingly sophisticated tools that seek to measure organisational efficiency. The question therefore arises: do these techniques offer policy makers useful tools with which to assess and regulate health care performance?

In collaboration with colleagues at the Centre for Health Economics and elsewhere, we have been involved in many studies seeking to address that question, and this book summarises our experience to date. As the reader will see, our findings are equivocal. We find much of value in the techniques of efficiency analysis, not least their rigour and the insights they give into complex data sets. These virtues deserve to be acknowledged. However, we also identify some important intellectual weaknesses and practical difficulties associated with implementing the techniques in health care, and we view with concern the claims made for them by some of their more ardent advocates.

This book therefore seeks to offer a balanced critique of the current state of the art of efficiency analysis as applied to health care. The intention is to offer analysts and policy makers a coherent view of the strengths and limitations of the techniques, both from a technical and a policy perspective.