What is equity?
Policy objective that seeks to establish fairness in the allocation of resources, based on equality in the distribution of health and health care or access to health care across population groups.
- Fundamentally about fairness and justice
- Distribution of benefits
What is efficiency?
Obtaining the greatest gain from a finite set of resources
• Operational, allocative, economic etc.
• Maximisation of benefits
Explain the trade-off between equity and efficiency and give some examples of this in practice
Policies which aim to achieve equity in the allocation of resources are often not the most efficient options (and vice versa).
- How much of the pie is there to go around? How can scarce resources be stretched?
Examples:
- Income Tax – equity via distribution but can be disincentive to work
- User Fees – can reduce moral hazard of overconsumption but impose heavy burden on poor
- Centralisation – creates efficiency (economy of scale) through shared costs and reduction of duplication but can decrease access
Explain the concept of equality as it pertains to healthcare
Why is it not feasible?
•Equality – Equal sharing of a good or service – related to horizontal equity.
This does not always represent the justice and fairness required of equity as different groups have different levels of need and disadvantage.
Equality is not often feasible due to: number of factors that impact on health, genetic differences, lack of consensus on ‘good health’, restriction of choice (paternalistic), trade-off required.
Hence, focus should be on equity and fairness of process of allocation and distribution
Explain the concept of horizontal equity and give an example
Horizontal Equity – Equal treatment of equals
- Equal access for equals/equal needs – ensures people in equivalent circumstances are treated the same
- Access, use and expenditure/resources
Example: Ensure all pregnant mothers have access to free pre-natal care. Includes assistance to overcome barriers such as distance, cost of travel, language, culture etc.
Explain the concept of vertical equity and give an example
Vertical Equity – Unequal but fair treatment of unequal’s
- Varied access for varied circumstances
- Treating individuals or communities who are unequal differently, according to their level of need/disadvantage
- Positive discrimination, striving for equality
- More complicated to implement than horizontal equity as requires judgements on need and allocation: who should make these judgements? How are they made?
Examples of policies:
- Weighting: greater share of funding allocated using weights based on indicators of relative need – eg. infant mortality socioeconomic status – rather than population size
- User fees: exemptions or progressive payment scales
Outline the different definitions of equity as applied in the health sector
Access – opportunity to use services. Transport, distance, waiting times, information, cost and ability to pay.
Utilization – different patterns despite needs. Treatment seeking behaviour impacted by religion, culture, gender, age and education.
Expenditure – spending same amount on different population can create differences in outcome eg. rural vs. urban.
Detail the pros and cons of government intervention in the health sector
Pros –
Address market failures and improve efficiency;
and to address inequality and improve equity
Cons –
Can create inefficiencies eg. diverts resources from how they would have been used, administration costs are higher, asymmetry of information (civil servants and public), government and civil servants act in own interest.
