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

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  • 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.

Suggested Citation

  • Katharina Hauck & Rebecca Shaw & Peter C. Smith, 2002. "Reducing avoidable inequalities in health: a new criterion for setting health care capitation payments," Health Economics, John Wiley & Sons, Ltd., vol. 11(8), pages 667-677.
  • Handle: RePEc:wly:hlthec:v:11:y:2002:i:8:p:667-677
    DOI: 10.1002/hec.692
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    References listed on IDEAS

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    1. 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.
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    3. 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.
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    Citations

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    Cited by:

    1. 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.
    2. José Ferraz Nunes, 2008. "Health, Social Insurance and Income," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 14(3), pages 329-335, August.
    3. Green, Andrew & Ross, Duncan & Mirzoev, Tolib, 2007. "Primary Health Care and England: The coming of age of Alma Ata?," Health Policy, Elsevier, vol. 80(1), pages 11-31, January.
    4. 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.
    5. 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 Economics and Management, Springer, vol. 10(1), pages 29-42, March.
    6. 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.
    7. repec:kap:iaecre:v:14:y:2008:i:3:p:329-335 is not listed on IDEAS
    8. Minet Kinge, Jonas & Morris, Stephen, 2010. "Socioeconomic variation in the impact of obesity on health-related quality of life," Social Science & Medicine, Elsevier, vol. 71(10), pages 1864-1871, November.
    9. 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.
    10. Katherine Cuff & Jeremiath Hurley & Stuart Mestelman & Andrew Muller & Robert Nuscheler, 2007. "Public and Private Health Care Financing with Alternate Public Rationing," Department of Economics Working Papers 2007-07, McMaster University.
    11. Wildman, John & McMeekin, Peter, 2014. "Health care and social care: complements, substitutes and attributes," MPRA Paper 54425, University Library of Munich, Germany.
    12. 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.
    13. O'Loughlin, Rosalyn & Kelly, Alan, 2004. "Equity in resource allocation in the Irish health service: A policy Delphi study," Health Policy, Elsevier, vol. 67(3), pages 271-280, March.
    14. 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.
    15. Lane, Haylee & Sarkies, Mitchell & Martin, Jennifer & Haines, Terry, 2017. "Equity in healthcare resource allocation decision making: A systematic review," Social Science & Medicine, Elsevier, vol. 175(C), pages 11-27.
    16. Stephen Dunn, 2006. "Prolegomena to a Post Keynesian health economics," Review of Social Economy, Taylor & Francis Journals, vol. 64(3), pages 273-299.

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