Resource allocation and health financing

Paolo Belli, Research Fellow, Department of Population and International Health Harvard School of Public Health - August 2001, Professor at Pavia University, Pavia Italy, and Lecturer at Bocconi University. This paper introduces a conceptual framework to investigate into the equity consequences of resource allocation, strategic purchasing and payment system reforms in health. It also presents a selective survey of the evidence available on the distribution of health, on utilization of public health services across socio-economic groups, and on the equity impact of RAP reforms in a number of developing countries.

Health care report cards - public disclosure of patient health outcomes at the level of the individual physician and/or hospital - may address important informational asymmetries in markets for health care, but they may also give doctors and hospitals incentives to decline to treat more difficult, severely ill patients. Whether report cards are good for patients and for society depends on whether their financial and health benefits outweigh their costs in terms of the quantity, quality, and appropriateness of medical treatment that they induce. Using national data on Medicare patients at risk for cardiac surgery, we find that cardiac surgery report cards in New York and Pennsylvania led both to selection behavior by providers and to improved matching of patients with hospitals. On net, this led to higher levels of resource use and to worse health outcomes, particularly for sicker patients. We conclude that, at least in the short run, these report cards decreased patient and social welfare.

WHO, UNICEF, UNAIDS, World Bank, UNESCO, and UNFPA, 2/1/02.
In December 2001, the Commission on Macroeconomics and Health presented the results of its two-year work to the World Health Organization in a publication titled Macroeconomics and Health: Investing in Health for Economic Development. The Commissioners present a new global blueprint for health that is both compassionate and cost-effective. Millions of deaths occur each year in the developing world due to conditions which can be prevented or treated. The Commissioner's outline a plan of action to save millions of these lives every year at a small cost relative to the vast improvements in health and increased prosperity. The Report shows that just a few conditions are responsible for a high proportion of the avoidable deaths in poor countries - and that well-targeted measures, using existing technologies, could save around 8 million lives per year and generate economic benefits of more than $360 billion per year, by 2015­2020. The aggregate cost of scaling up essential health interventions in low-income countries would be around $66 billion per year, with the costs roughly divided between high-income donor countries and low-income countries. Thus, the economic benefits would vastly outstrip the cost. Scaling Up the Response to Infectious Diseases: A way Out of Poverty takes up the Commission's challenge. It outlines how increased investment in health can be well spent, stressing how interventions, health system strengthening and behaviour change together can help achieve the goals we are setting ourselves. This report takes forward the Commission's action agenda. It will help decision makers see how we can turn increased investment in health into concrete results.

The purpose of this report is to consider the legitimacy of the assumption that communities or societies with more unequal income distributions have poorer health outcomes. The report presents a critical review of the existing international literature on the relationship between income, income inequality and health, in terms of conceptual approaches, research methods and the policy implications drawn from it. The report also offers some guidance for judging between policy priorities based on the relative importance of income inequality versus other potential causal factors in determining population levels of health. An overview of the potential relationship between income, income inequality and health is set out, followed by a discussion of the methodological and technical issues required to explore these links.