What formula defines value in health economics?

• A. Cost divided by benefit
• B. Costs minus benefits
• C. Benefit divided by cost
• D. Benefits plus costs

Answer: (C)

Measuring efficiency in health care comes from comparing what you gain to what you spend. The idea of value is expressed as benefits divided by costs, giving how much benefit you get per unit of cost. This ratio lets you compare interventions: a higher value means you’re getting more health benefit for each unit of spending, signaling a more efficient use of resources.

For example, if an intervention yields 100 units of health benefit at a cost of 50, the value is 2 (benefit per cost).

Other formulations don’t represent value in the same way: cost divided by benefit would tell you cost per unit of benefit (a burden, not value), while costs minus benefits gives net gain or loss, and benefits plus costs isn’t a meaningful measure of value.