How much does knee arthroplasty cost? That is a more complicated question than it may seem upon first consideration. Based on my early career experience as a health care management consultant, I am confident that the correct answer is, “It depends.” It depends on the definition and scope of costs to be analyzed, it depends on from whose perspective the cost assessment is, and it depends, in part, on the purpose of estimating the costs in the first place.

The next few columns of “The Curious Economist” will examine various aspects of health care costs and cost analysis. This month, I introduce the types of costs to consider, the potential perspectives from which one can assess costs, and the established economic frameworks in which costs are analyzed and compared.

The Indian parable of the blind men and the elephant describes a group of blind men who come across an elephant...

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