Improving health system efficiency is a compelling policy goal, especially in systems facing serious resource constraints. However, in order to improve efficiency we must know how to properly measure it. This new policy brief therefore proposes an analytic framework for understanding and interpreting many of the most common health care efficiency indicators.

The brief’s key messages are:

• The inexorable growth in health expenditure has led to a widespread demand for efficiency improvements.
• There is no single metric or set of indicators that will give the complete picture of health system efficiency in a country.
• The real causes of any identified inefficiencies need to be carefully identified and analysed to inform good policymaking.
• More nuanced indicators require more standardized and detailed cost accounting data and linked datasets and registries.
• This policy brief gives a useful framework for understanding and interpreting the healthcare efficiency metrics that are widely used.