Health economics is the discipline that studies how scarce resources are allocated in healthcare, weighing the costs and outcomes of treatments to inform decisions about value and funding.

Health economics focuses on costs, cost-effectiveness and efficiency, while HEOR combines health economics with outcomes research, adding real-world and patient-reported outcomes to build the full value case.

Economic evaluation compares the costs and outcomes of alternative treatments. The main types are cost-effectiveness, cost-utility, cost-benefit and cost-minimization analysis.

A quality-adjusted life year (QALY) combines the length and quality of life into a single measure, used to compare the value of treatments.

The incremental cost-effectiveness ratio (ICER) is the additional cost of a treatment per unit of health gained, often cost per QALY.

Cost-effectiveness analysis compares the cost of treatments per unit of health gained, such as per life-year or per QALY, to judge value for money.

Opportunity cost is the value of the next-best option forgone when resources are spent one way rather than another, a core idea in health economics.

Real-world data provides actual costs, resource use and effectiveness that feed economic models, extend outcomes beyond the trial and track value after launch.

Discounting adjusts future costs and health benefits to their present value, reflecting that people generally value outcomes sooner rather than later.

Pharmaceutical and biotech HEOR teams, payers, HTA bodies, governments and academics use health economics to evaluate the value and affordability of treatments.

RWE Connect 2026 is a two-day real-world evidence summit in Boston bringing together the RWE, HEOR and health economics leaders who generate and apply real-world evidence, with 40+ speakers and 150+ attendees.

14 to 15 October 2026 at the Hampton Inn by Hilton, Boston Seaport District, Boston, MA.