Innovation and efficiency in health care: does anyone really know what they mean?

This paper challenges common perceptions and definitions of innovation and efficiency in health care. Once one accepts that optimum levels of innovation and efficiency will not be driven purely by market forces, as all countries in the world except the United States clearly have, then this is a serious problem. Moreover, even in the United States, this paper documents numerous circular or flawed definitions that are commonly employed for efficiency, and presents opportunities for directions to improve or develop new ways of defining efficiency in health care in ways that may promote innovation more effectively. Establishing more shared understanding of these important concepts in an interdisciplinary systems framework is crucial for making progress in achieving better outcomes for patients with better allocations of scarce resources.