The Economics of Priority Setting for Health Care : A Literature Review

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

Bibliographic Details

Main Authors:	Hauck, Katharina, Smith, Peter C., Goddard, Maria
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2004-09
Subjects:	HEALTH CARE REFORM, HEALTH CARE, BUDGET CONSTRAINTS, HEALTH CARE FINANCE, ABATEMENT, ACCESS TO HEALTH CARE, ADVERSE EFFECTS, ALLOCATIVE EFFICIENCY, ALTERNATIVE POLICIES, BENEFIT ANALYSIS, COMPLEX TASK, CONSUMERS, COST EFFECTIVENESS, DEVELOPING COUNTRIES, DISTRIBUTION OF WEALTH, DONOR AGENCIES, ECONOMIC ANALYSIS, ECONOMIC EVALUATION, ECONOMIC POLICY, ECONOMIC THEORY, ECONOMISTS, EXPENDITURES, EXTERNALITIES, FAMILY CARE, HEALTH CARE FINANCING, HEALTH CARE RESOURCES, HEALTH CARE SYSTEMS, HEALTH ECONOMICS, HEALTH GAIN, HEALTH OUTCOMES, HEALTH POLICY, HEALTH SECTOR, HEALTH SERVICES, HEALTH STATUS, HEALTH SYSTEM, HUMAN CAPITAL, HUMAN DEVELOPMENT, HUMAN RESOURCES, INCOME, INCREMENTAL COSTS, INSURANCE, INTERVENTION, ISOLATION, LESSONS LEARNED, MALARIA, MARGINAL ANALYSIS, MEDICAL EQUIPMENT, MEDICAL TECHNOLOGIES, MORBIDITY, NUTRITION, OPPORTUNITY COSTS, OPTIMIZATION, PATIENTS, POLICY ANALYSIS, POLITICAL ECONOMY, PRESENT VALUE, PRODUCTIVITY, PROMOTING HEALTH, PUBLIC HEALTH, PUBLIC HEALTH PROGRAMS, PUBLIC SECTOR, RESOURCE ALLOCATION, SCARCE RESOURCES, SOCIAL POLICY, TRANSACTION COSTS, TUBERCULOSIS, UNCERTAINTY, WAGES, WEALTH, WELFARE ECONOMICS HEALTH CARE REFORM,
Online Access:	http://documents.worldbank.org/curated/en/2004/09/5584467/economics-priority-setting-health-care-literature-review http://hdl.handle.net/10986/13700
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