Key points

  • The report highlights two fundamental roles for value-for-money (VfM) measurement:
    • prospective assessment of technologies (for resource allocation purposes)
    • retrospective assessment of the VfM of individual providers (performance assessment).
  • In combination, these roles comprise a major element of the functions of healthcare purchasers.
  • The purchasing function is immensely complex and met with only limited success in most health systems.
  • Concerted attention to VfM measurement offers a central focus for improving purchasing for health and healthcare.

In this report, Professor Peter Smith from the University of York describes the various concepts of value for money in common use. He examines how measures of value for money are constructed, discusses the challenges inherent in measuring value for money, and assesses the priorities for future efforts in this domain.

Professor Smith advocates a comprehensive approach to measuring value for money, outlining the associated benefits to performance measurement and accountability.

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