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Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments

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Author Info

  • Katharina Hauck

    (Centre for Health Economics, University of York, UK)

  • Rebecca Shaw

    (Centre for Health Economics, University of York, UK)

  • Peter C. Smith

    (Centre for Health Economics, University of York, UK)

Abstract

Traditionally, most health care systems which pretend to any sort of rationality and cost control have sought to allocate their limited funds in order to secure equal opportunity of access for equal need. The UK government is implementing a fundamental change of resource allocation philosophy towards 'contributing to the reduction of avoidable health inequalities'. The purpose of this essay is to explore some of the economic issues that arise when seeking to allocate health care resources according to the new criterion. It indicates that health inequalities might arise because of variations in the quality of health services, variations in access to those services, or variations in the way people produce health, and that the resource allocation consequences differ depending on which source is being addressed. The paper shows that an objective of reducing health inequalities is not necessarily compatible with an objective of equity of access, nor with the objective of maximising health gain. The results have profound consequences for approaches towards economic evaluation, the role of clinical guidelines and performance management, as well as for resource allocation methods. Copyright © 2002 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/hec.692
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Health Economics.

Volume (Year): 11 (2002)
Issue (Month): 8 ()
Pages: 667-677

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Handle: RePEc:wly:hlthec:v:11:y:2002:i:8:p:667-677

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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References

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  1. Maria Goddard & Peter Smith, 1998. "Equity of access to health care," Working Papers 032cheop, Centre for Health Economics, University of York.
  2. Croxson, B. & Propper, C. & Perkins, A., 2001. "Do doctors respond to financial incentives? UK family doctors and the GP fundholder scheme," Journal of Public Economics, Elsevier, vol. 79(2), pages 375-398, February.
  3. Royston, G. H. D. & Hurst, J. W. & Lister, E. G. & Stewart, P. A., 1992. "Modelling the use of health services by populations of small areas to inform the allocation of central resources to larger regions," Socio-Economic Planning Sciences, Elsevier, vol. 26(3), pages 169-180, July.
  4. Joao Pereira, 1989. "What does equity in health mean?," Working Papers 061chedp, Centre for Health Economics, University of York.
  5. Matthew Sutton & Peter Lock, 2000. "Regional differences in health care delivery: implications for a national resource allocation formula," Health Economics, John Wiley & Sons, Ltd., vol. 9(6), pages 547-559.
  6. Peter C. Smith & Nigel Rice & Roy Carr-Hill, 2001. "Capitation funding in the public sector," Journal of the Royal Statistical Society Series A, Royal Statistical Society, vol. 164(2), pages 217-257.
  7. Williams, Alan & Cookson, Richard, 2000. "Equity in health," Handbook of Health Economics, in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 35, pages 1863-1910 Elsevier.
  8. Wagstaff, Adam, 1991. "QALYs and the equity-efficiency trade-off," Journal of Health Economics, Elsevier, vol. 10(1), pages 21-41, May.
  9. Fredrik Andersson & Carl Hampus Lyttkens, 1999. "Preferences for equity in health behind a veil of ignorance," Health Economics, John Wiley & Sons, Ltd., vol. 8(5), pages 369-378.
  10. Amir Shmueli & Jacob Glazer, 1999. "Addressing the inequity of capitation by variable soft contracts," Health Economics, John Wiley & Sons, Ltd., vol. 8(4), pages 335-343.
  11. David K. Whynes & Tara Heron & Anthony J. Avery, 1997. "Prescribing Cost Savings by GP Fundholders: Long-Term or Short-Term?," Health Economics, John Wiley & Sons, Ltd., vol. 6(2), pages 209-211.
  12. Culyer, A. J. & Wagstaff, Adam, 1993. "Equity and equality in health and health care," Journal of Health Economics, Elsevier, vol. 12(4), pages 431-457, December.
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Citations

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Cited by:
  1. José Ferraz Nunes, 2008. "Health, Social Insurance and Income," International Advances in Economic Research, Springer, vol. 14(3), pages 329-335, August.
  2. Paul Revill & Miqdad Asaria & Andrew Phillips & Diana M Gibb & Charles F Gilks, 2014. "WHO Decides What is Fair? International HIV Treatment Guidelines, Social Value Judgements and Equitable Provision of Lifesaving Antiretroviral Therapy," Working Papers 099cherp, Centre for Health Economics, University of York.
  3. Nagy, Balázs, 2010. "Egy hiányzó láncszem?. Forráselosztás a magyar egészségügyben
    [Resource allocation in Hungarian health care - is there a missing link?]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(4), pages 337-353.
  4. Hugh Gravelle & Matthew Sutton & Stephen Morris & Frank Windmeijer & Alastair Leyland & Chris Dibben & Mike Muirhead, 2003. "Modelling supply and demand influences on the use of health care: implications for deriving a needs-based capitation formula," Health Economics, John Wiley & Sons, Ltd., vol. 12(12), pages 985-1004.
  5. Trevor A. Sheldon & Peter C. Smith, 2000. "Equity in the allocation of health care resources," Health Economics, John Wiley & Sons, Ltd., vol. 9(7), pages 571-574.
  6. Stephen Dunn, 2006. "Prolegomena to a Post Keynesian health economics," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 273-299.
  7. Miqdad Asaria & Susan Griffin & Richard Cookson & Sophie Whyte & Paul Tappenden, 2013. "Distributional Cost-Effectiveness Analysis of Health Care Programmes," Working Papers 091cherp, Centre for Health Economics, University of York.
  8. David Cantarero & Marta Pascual & Jose Maria Sarabia, 2004. "Can income inequality contribute to understand inequalities in health? An empirical approach based on the European Community Household Panel," ERSA conference papers ersa04p230, European Regional Science Association.
  9. Alessio Petrelli & Roberta Picariello & Giuseppe Costa, 2010. "Toward a needs based mechanism for capitation purposes in Italy: the role of socioeconomic level in explaining differences in the use of health services," International Journal of Health Care Finance and Economics, Springer, vol. 10(1), pages 29-42, March.
  10. Wildman, John & McMeekin, Peter, 2014. "Health care and social care: complements, substitutes and attributes," MPRA Paper 54425, University Library of Munich, Germany.

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