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Welfarism or non-welfarism? Public preferences for willingness to pay versus health maximisation

Author

Listed:
  • John McKie

    () (Centre for Health Economics, Monash University)

  • Jeff Richardson

    () (Centre for Health Economics, Monash University)

  • Jan Olsen

    (Institute of Community Medicine, University of Tromso)

Abstract

We distinguish between different forms of welfarism and non-welfarism, along three dimensions: “self-motivation”, “social goal”, and “role of government”. The paper then reports the results of a survey of the “meta-preferences” of the Australian public concerning the principles that should govern priority setting in health care. Of 743 respondents, 77.4 per cent thought that resources should be allocated on the basis of health outcomes (non-welfarism), whereas only 11.6 per cent thought that priorities should reflect individuals’ preferences as stated through willingness to pay (welfarism). The Discussion section considers three arguments supporting WTP: first, that it is the “theoretically correct” method for valuing health effects due to its foundation in welfare economics; second, that it is the most flexible technique for evaluating health services, as it is able to include a variety of factors in addition to health that are important to individuals; and third, that it places a dollar value on life and quality of life, which is necessary if allocative efficiency is to be achieved. We argue that these arguments for individual WTP are unpersuasive.

Suggested Citation

  • John McKie & Jeff Richardson & Jan Olsen, 2005. "Welfarism or non-welfarism? Public preferences for willingness to pay versus health maximisation," Centre for Health Economics Research Papers 10/05, Monash University, Centre for Health Economics.
  • Handle: RePEc:mhe:cherps:2005-10
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    File URL: http://www.buseco.monash.edu.au/centres/che/pubs/rp10.pdf
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