Health equity

Question 1

Describe Pareto efficiency

Answer 1

When for a given set of consumer tastes, resources and technology, it is impossible to change resource allocation to make people better off without making anyone worse off.

Question 2

What is the link between Pareto efficiency and perfect competition?

Answer 2

If every market in the economy was functioning as a perfectly competitive free market, the equilibrium would be Pareto efficient.

Question 3

Who devised the notion of the ‘Invisible Hands’

Answer 3

Adam Smith

Question 4

What is a distortion?

Answer 4

When society’s marginal cost of producing a good is not equal to society’s marginal benefit from consuming the good.

Question 5

Why does market failure occur?

Answer 5

It occurs when the unregulated equilibrium is inefficiently allocated. This may occur due to imperfect competition, social priorities, externalities or missing markets.

Question 6

Describe what welfare economics is.

Answer 6

A branch of economics that deal with normative issues. It describes how well the economy works.

Question 7

What is the difference between equality and equity?

Answer 7

Equality is everyone having or being treated the same.
Equity is having what is fair

Question 8

What is horizontal equity?

Answer 8

The identical treatment of identical people.

Question 9

What is vertical equity?

Answer 9

The different treatment of different people in order to reduce the consequences of their innate differences.

Question 10

What is equity in the financing of healthcare?

Answer 10

The extent to which individuals with unequal ability to pay make appropriately unequal payments.

Question 11

What is the difference between progressivity, regressivity and proportionality in terms of financing healthcare?

Answer 11

Progressivity: Where the proportion of income paid rises as income rises
Regressivity: Where the proportion of income paid falls as income rises
Proportionality: Where the proportion of income paid is constant

Question 12

How is progressivity of healthcare financing systems measured?

Answer 12

Using progressivity indices, such as the Kakwani index (1977). This measures the extent to which health care financing departs from proportionality.

Question 13

Draw an example concentration curve for income.

Answer 13

The 45 degree (brown) curve represents equality in payments. The CCYY (blue) curve denotes the cumulative proportion of income of the population against cumulative income. The CCPY (pink) curve denotes the cumulative income of the population agains cumulative health payments.

Question 14

Describe how the Kakwani index can be derived from a concentration curve for income and healthcare payments.

Answer 14

The Kakwani index (K) is equal to the concentration index for payments (IP), minus the concentration index for income (IY).
K = IP-IY
IP is twice the area between the payment line and the 45 degree line
IY is twice the area between the income line and the 45 degree line

Question 15

What options are there for equitable distribution of healthcare?

Answer 15

1. Equal expenditure per capita
2. Equality of health care according to need
3. Equality of access
4. Equality of health
5. Utility

Question 16

Draw and describe the ill-health concentration curve.

Answer 16

The majority of ill-health is burdened by the poorest in society.

Question 17

Describe the horizontal equity index and show how it can be derived graphically.

Answer 17

The Need concentration curve (pink) shows the proportional need for healthcare according to income.
The area between NC and the 45 degree line x2 is the concentration index for need (IN).

The Healthcare concentration curve (blue) shows the proportional use of healthcare according to income.
The area between HC and the 45 degree line x2 is the concentration index for healthcare use (IC).

The horizontal equity index is IC-IN

Question 18

How does NICE manage equity considerations in terms of severity of illness?

Answer 18

Severity of illness is applied to QALYs using severity weights. QALYs are weighted higher for conditions that have a greater associated QALY loss.

Question 19

Describe the concept of a ‘fair innings’.

Answer 19

Described by Williams (1997). It is an argument that health gains in older people should be weighted less than in younger people. It is based on the notion that everyone is entitled to a ‘normal’ life span.
Pinho and Borges (2018) found most people surveyed in a 3-country survey (Bulgaria, Portugal and Croatia) thought priority of healthcare should be given to children, bu Anand and Wailoo (2000) found most people preferring an egalitarian approach.

Question 20

Describe the notion of social responsibility to equity concerns.

Answer 20

This notion argues that those who were (at least arguably) responsible for their ill-health should be weighted differently in terms of health gain.

Question 21

What are the challenges of incorporating equity concerns into cost effectiveness analyses?

Answer 21

Equity is a value judgement, and different people will have different ideas of what is equitable.
Anand and Wailoo (2000) demonstrates that while a population may gravitate towards a particular choice in who should get healthcare, there is rarely a unanimous decision.

Question 22

Discuss the idea of rarity in terms of equity concerns.

Answer 22

There are arguments that suggest that giving special consideration for ‘orphan drugs’ based on the idea that it costs far more to develop and then purchase a drug for rare disease due to the small market. Other would argue that giving additional consideration to these drugs is inequitable as rarity does not mean that individual’s health should be worth more, and the issue is actually surrounding severity of disease and whether rare drug development should be subsidised (McCabe et al. 2015).

NICE does have a higher cost per QALY threshold for rare diseases (up to £300,000).

Question 23

What does Olsen (2000) say about distribution of benefits in healthcare.

Answer 23

Olsen (2000) argues there is a ‘threshold benefit level’. When the health gains are small, people would rather give them to a smaller group to maximise that groups health benefits - rather than see a large group of people obtain a somewhat inconsequential health gain. When gains are larger, people would rather give them to a larger group to maximise the overall health benefits.

Question 24

What factors may be relevant to someone deciding how to distribute health care?

Answer 24

• Health gain from treatment
• Severity of the disease
• The contribution of the individual to society
• Age (or past QALYs enjoyed)
• Past health care consumption
• Healthcare contribution
• Socioeconomic status
• Degree of responsibility
• Fairness
• Rarity

Question 25

How are social value weights estimated?

Answer 25

Surveys (Anand and Wailoo (2000), Pinho and Borges (2018))
NICE Citizens Council
Focus groups
Person trade-off and discrete choice experiments.

Baker et al. (2010) did a ‘person trade-off’ exercise with partcipants and found that individuals tended to give more weight to treating younger or sicker patients - but not the very young or the very sick.

Brazier et al. (2013) also found using discrete choice experiments that individuals did weight QALYs differently for a larger health gain, burden of illness and end of life.