Promoting equity and the role of government Chap17 Flashcards
Equity
A policy objective which seeks to establish fairness in the allocation of resources. It is often, though not exclusively, defi ned by an objective based on equality in the distribution of health, health care or access to health care across population groups.
Horizontal equity
Equal treatment of equals (e.g. equal access for equal need).
Horizontal equity is about ensuring that people in equivalent circumstances are treated the same.
Resource allocation formula
A formula that uses indicators of the relative need for health services to guide resource allocation decisions in an effort to achieve equity of funding across geographic areas.
Vertical equity
Unequal (but fair) treatment of unequals (i.e. individuals who are unequal should be treated differently according to their level of need).
Vertical equity is about treating individuals (or communities) who are unequal differently, in a way that is seen to be commensurate with their relative disadvantage.
Difference between equity and equality
Equity is different to equality. While equity is about fairness, this may or may not mean the equal sharing of a good. It may for example be deemed fair that a disadvantaged group in society receive a greater share of resources. For example, resource allocation formulae used in countries such as Australia and Canada to distribute health care resources often include ‘weightings’ to refl ect the higher health needs of particular population groups such as indigenous people or rural/urban populations. In this case equity does not translate into everyone receiving equal shares of a good or service. Another example is the use of equity ‘weights’ in cost-effectiveness analysis (CEA) to revalue consequences such that greater weight is given to the health gain of one group or individual in relation to another
How would you define horizontal equity in healthcare?
There are three popular ways of defi ning horizontal equity in health care:
• equal access to health care for equal need;
• equal use of health care for equal need;
• equal health care expenditure for equal need.
Equal access for equal need is often defi ned in terms of people with the same level of need who face the same level of barrier to health care taking into account distance, cost and any language or cultural issues that may limit access to services. Equal utilization for equal need requires that policy-makers ensure that not only do those with the same level of need have the same level of access but that they actually use the same amount of services. Equal health care expenditure for equal need implies that if two individuals have the same level of need then they should be allocated the same amount of health care expenditure.
Can you think of any problems with measuring equality of access?
a) Travel distance to facilities and services is the same.
b) Transport and communications services are the same.
c) Waiting times are the same.
d) Patients are equally informed about the availability and effectiveness of treatments.
e) Charges are the same and ability to pay is the same.
Equity and healthcare financing
In terms of international comparisons of equity in health care fi nance, some general fi ndings can be drawn from the literature. Most notably, the degree to which a health care f i nancing system is regressive or progressive depends on the mix of fi nancing sources. As a general rule, those systems based on social insurance and which rely more on direct and general taxes tend to be more progressive. Those that are based on private insurance and rely more on direct user payments tend to be more regressive.
fair innings
It is based on the premise that the elderly may be regarded as having a lower priority since they have had a ‘fair innings’ (Williams 1997). According to this approach, if health care resources are to be distributed fairly then every person should receive enough health care to give them the opportunity to live in good health for a ‘normal’ span of years. What constitutes a ‘normal’ span of years is often defi ned as ‘life expectancy at birth’.
This notion of ‘intergenerational’ equity or, as some prefer to call it, ‘age-based rationing’ requires greater discrimination against the elderly than would be the case if only effi ciency criteria were used based on, for example, cost-effectiveness rankings.
new public management
These theories underlie what has been termed the “new public management,” which seeks to expose public services to market pressures, without necessarily privatizing them (Walsh, 1995). Such approaches change the nature of state involvement, with policies of opening up services to competitive tender or putting services out to contract on a competitive basis, introducing internal markets where public providers have to compete for contracts from public purchasers, devolving fi nancial control to organizations such as individual hospitals, and spinning off parts of government into separate public agencies (such as an agency to manage government health services).
Government intervention in the health sector can lead to certain ineffi ciencies that must also be considered. Here are some examples.
- Financing government programmes requires diverting money (resources) from other areas of the economy. This is usually done by levying taxes on people’s incomes or on the sale of goods, creating losses to producers and consumers. If the loss is very large then the intervention may not be justifi ed.
- Besides programme costs, there are administration costs involved in every government action. For example, there is no such thing as a cost-free transfer. If you want to take money from one group of people and give it to another group then you have to pay the lawyers who draft the law, the civil servants who administer the transfer and the police and lawyers who enforce the law. This means that the gaining group will gain a smaller amount of money than the amount that is taken away from the losing group.
- You ought to assume that politicians and civil servants act in their own interests in the same way that patients and doctors are assumed to act in theirs. This means that due to an asymmetry of information between the general public and civil servants, the latter does not always do as the former would like. For one thing, some civil servants try to expand their own department because this increases their power and prestige. They will press for this even if it is not benefi cial to society, although civil servants may have an ethical code that constrains their actions just as doctors do.
- As for the provision of services, it may be diffi cult to replace the coordinating powers of market forces with a large number of independent decisions made by a group of civil servants.
Equity–effi ciency trade-off
The usual conundrum in which policies aimed at achieving a more equitable share of resources often are not the most effi cient options and thus result in less to share overall.
