In december of 1963 Nobel Laureate Kenneth J. Arrow
wrote a landmark article in the American Economic Review,
"Uncertainty and the Welfare Economics of Medical Care."
It is a most interesting and enduring article, and recently
some two dozen health researchers from different disciplines
invited Kenneth Arrow to work with them on a volume for
the Journal of Health Politics, Policy and Law updating that
earlier article. The special issue is "Kenneth Arrow and
the Changing Economics of Health Care," Vol 26, Number 5,
October 2001. There are sections on supply, demand, and
health care competition; risk, insurance, and redistribution;
information, knowledge, and medical markets; social norms
and professionalism; and a response by Professor Arrow.
I recommend this to anyone deeply interested in the issues
of efficiency and the health care market, as two dozen health economists
and health lawyers and health experts from other disciplines
wrestle with this topic. I particularly recommend the chapter by Uwe
Reinhardt, "Can Efficiency in Health Care be Left to the Market?"
for purposes of this discussion.
Website is www.jhppl.org.
Barbara Krimgold
-----Original Message-----
From: Alan Williams [mailto:[log in to unmask]]
Sent: Thursday, January 17, 2002 10:49 AM
To: [log in to unmask]
Subject: Re: equity and efficiency
Perhaps I should have been more explicit when pointing out that when
comparing "efficiency" with "equity" I was, as I said, taking the
efficiency objective to mean "a desire to improve overall population
health as much as possible" and the equity objective to mean "the
reduction of inequalities in people's lifetime experience of
health" It is certainly possible to think of trade-offs between
these objectives, which will be relevant to judging the effectiveness of
particular activities, even if they purport only to be directed at one
of the objectives. We might then say that the cost, in terms of
worsening health inequalities, in going single-mindedly for improving
the overall health of the entire population, is "too high".
Conversely, in some other situation, we may say that the cost, in terms
of sacrifices in overall population health, of going single-mindedly for
reducing health inequalities, is too high. And this is quite
independent of whether the particular policies we are looking at are
"technically efficient" or not. Technically inefficient activities
simply reduce how much you can achieve from a given budget.
Alan Williams
Mike Hughes wrote:
>
> I don't see that that you can trade-off equity for efficiency as Alan
> suggests. In respect of the distribution of healthcare resources I would
> have thought that one of the few reliable measures of effectiveness, and
> thus of efficiency, was equitable distribution according to need. Thus the
> answer is yes it can be both. In fact it also means that health care
> resources can't be inequitable and efficient. It does not necessarily
> follow, however, that that all equitable services are efficient.
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