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

  • 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)

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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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
Contact details of provider: Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/5749

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  1. Wagstaff, Adam, 1991. "QALYs and the equity-efficiency trade-off," Journal of Health Economics, Elsevier, vol. 10(1), pages 21-41, May.
  2. 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.
  3. Joao Pereira, 1989. "What does equity in health mean?," Working Papers 061chedp, Centre for Health Economics, University of York.
  4. 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.
  5. Maria Goddard & Peter Smith, 1998. "Equity of access to health care," Working Papers 032cheop, Centre for Health Economics, University of York.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. 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.
  12. 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.
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