11. State Healthcare Provision

Question 1

New Universalism involves balancing

Answer 1

• Quality of healthcare
• Cost and financing (cost should not be barrier to access, funds need to be set aside for healthcare)
• Social acceptability - healthcare should be responsive to needs and wants of the population

Question 2

Objectives of State Provision

Answer 2

PSP B

• Protecting the nation’s health
• Subsidising the poor
• Balancing the budget
• Promises following (Political and social culture)

Protecting nation’s health
- healthy and productive workforce should promote productivity and growing GDP
- in this sense State healthcare policy should pay for itself

Subdising the poor
- state will maintain a role ensure poorest have access to primary medical assistance
- children and aged are usually priorities
- integral part of attempts to redistribute wealth

Balancing the budget
- cost of healthcare funded through specific health charges, general taxation
- redistribution of income from healthy to less so

Question 3

Other ways the state could enhance nation’s health

Answer 3

• education about general health/ healthy lifestyle
• provision of screening facilities
• clinics and regular check-ups
• making overseas options a viable option
• providing advice - e.g. on diet
• accident prevention
• anti-smoking campaigns

Extent state can achieve objectives dependent on
- nation wealth
- other priorities in budget

Question 4

Health objectives will depend on things such as

Answer 4

• political stance
• characteristics of population (wealth and size)
• state of country infrastructure
• quantity and quality of medical services and expertise
• economy
• existence of other state benefits
• history of state care in the country
• social and cultural stance of the country

Question 5

Medical inflation (healthcare costs) > cost of consumer goods

Answer 5

• improvements in technology
• growing expectation of delivery from the public
• mortality improvements, leading to increased morbidity and increased healthcare costs for the eldery

Question 6

Challenges associated with allocating limited healthcare resources

Answer 6

• demographic challenge (ageing population, increasing healthcare costs)
• technological challenge (innovation, delivery of healthcare increasing demand)
• challenge of sisyphus (increased life expectancy and focus on innovation –> budget pressure)
• burden of disease
• access to skilled medical professionals and infrastructure (may leave for other countries once trained)
• competition or regulation in healthcare (regulation balanced by need for competition)

Question 7

Approaches to resource allocation of healthcare

(and the costs relative to the effectiveness or benefits of the treatment)

Answer 7

• Cost-Analysis
• Cost-effectiveness analysis (CEA)
• Cost-utility analysis (CUA)
• Cost-benefit analysis (CBA)
• Willingness-to-pay (WTP)

Question 8

Resource allocation - Cost Analysis

Answer 8

• assess cost of various healthcare systems
• useful in estimating required budget and whether the system is affordable
• does not take value of the health system ito improve health into account

Types of costs to be considered
- initial and recurrent
- fixed and variable
- direct and indirect
- estimates of future costs and how future costs expected to change as the healthcare system and population develops

Question 9

Resource Allocation - Cost Effectiveness Analysis

Answer 9

• assess cost of healthcare system relative to non-monetary benefit offers
• can be expressed in a number of ways: reduction in infant mortality, increase in life expectancy at birth

CEA = cost of healthcare in monetary units/ measure of effectiveness

• these can be measured in monetary terms (e.g. reduction in loss of income-related to sick days)

Question 10

Resource Allocation - Cost Utility Analysis

Answer 10

• assess cost of a healthcare system relative to changes in quality of life and changes in mortality
• emphasis on healthy years of lives saved, rather than simply counting number of lives saved
• change in quality of life usually measured:
• quality adjusted life years (QALYs)
• disability adjusted life years (DALYs)
• healthy years equivalent (HYEs)

CUA = cost in monetary units/ benefits in QALYs

• measure sums years spent in different states using weights
• indifference curve approach may be used

Question 11

Willingness to Pay

Answer 11

• can be used to measure the value an individual places on a health system
• can be determined directly (questionnaires, interviews); indirectly (observing behaviour, identifying how much an individual willing to pay for a treatment)

Question 12

CBA

Answer 12

• CBA puts a monetary value on the cost of a healthcare system and a monetary value on its outcomes
• Therefore allows for a direct comparison of cost and outcome
• CBA = cost in monetary units/ benefits in monetary units
• For a project to be recommended, CBA <1

How it can be used to make resource allocation decision
* Costs compared to changes in maternal mortality of various segments of the population
* Increased allocation to maternal health cane be evaluated on its own merit – rather than comparison between systems
* First step is to assign a monetary value to the prolonged life and / or change in health status
* Conversion of health status into monetary value per unit is challenging and controversial to assign monetary value to changes in person health
* Quality of life can be measured using health status index based on finite aspects of health
* The index would then be converted to monetary values for CBA

the benefits should consider changes in life expectancy as well as quality of life