Publication: The Economics of Priority Setting for Health Care : A Literature Review
Date
2004-09
ISSN
Published
2004-09
Author(s)
Hauck, Katharina
Smith, Peter C.
Goddard, Maria
Abstract
This report provides a review of the
literature on priority setting in healthcare. It adopts an
economic perspective on the problem of choosing the optimal
portfolio of programs that can be afforded from a limited
national healthcare budget. The traditional economic
approach, proposes maximizing health gain (however measured)
subject to a budget constraint, which implies ranking
programs according to their cost-effectiveness ratio.
However, our critical review suggests that this traditional
approach is subject to three important difficulties:
limitations in economic evaluation methodology,
incorporating equity principles, and practical constraints.
These suggest a need for a fundamental rethink of the role
of cost-effectiveness analysis in priority setting.
Methodological concerns include identifying whose
perspective to adopt, the generalizability of results to
multiple settings, the treatment of uncertainty and timing,
and the treatment of interactions between programs. Most
equity considerations can be captured in two broad headings:
equity related to some concept of need and equity related to
access to services. In principle equity concerns can be
incorporated into an economic approach to priority setting
with relative ease. However we find that many contributions
to the debate on equity concepts are theoretical and remote
from practical implementation issues. The traditional
cost-effectiveness approach generally ignores the numerous
practical constraints arising from the political,
institutional, and environmental context in which priority
setting takes place. These include the influence of interest
groups, the transaction costs associated with policy
changes, and the interactions between the provision and
financing of health services. We find that treatment of such
political economy perspectives is the least well-developed
aspect of the priority setting literature and suggest some
rudimentary models that could serve as a starting point for analysis
Citation
“Hauck, Katharina; Smith, Peter C.; Goddard, Maria. 2004. The Economics of Priority Setting for Health Care : A Literature Review. HNP discussion paper series;. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/3eca9266-39b3-502f-9abc-bd41f4fe16e5 License: CC BY 3.0 IGO.”