Authors' objectives:

The aims of this report are: - to review the methodological solutions proposed for addressing equity concerns through economic evaluation and to determine whether these are consistent with the theoretical foundations of economic evaluation, whether they are practically viable, and whether their adoption would be sufficient to confer normative strength to the results of economic analyses - to assess whether and how the potential distributional effects of resource allocation decisions have been taken into consideration in existing economic evaluations - to examine the cost-effectiveness and the distributional implications of selected healthcare policies currently in use in the UK, with the aim of identifying possible equityefficiency trade-offs and determining how these have been dealt with in the absence of appropriate analyses.

Authors' results and conclusions: The methodological solution for addressing distributional concerns in economic evaluation that has attracted the interest of health economists more than any other involves weighting health outcomes for specific equity dimensions (e.g. age, socio-economic condition). Other solutions that were explored include the use of willingness-to-pay measures, the person trade-off technique (all belonging to the normative category following a general distinction between 'normative' or 'positive' made by Mishan about allocation economics as well as equity weighting) and a positive solution based on the tabulation of the effects of health interventions in different subpopulations. The conclusion of this systematic review of the methodological literature is that the normative route to addressing equity concerns through economic evaluation poses significant, if not insurmountable, theoretical and practical problems. Normative solutions can be based on the measurement of interdependent utilities, on the definition of a social welfare function, or both. The former alone is not consistent with cost-effectiveness techniques based on measures of health gain that do not necessarily reflect utilities for own consumption of healthcare and would lead to allocations that are arguably undesirable; whereas defining a social welfare function would involve extremely complex measurements that are far beyond the reach of existing studies of individual and collective values. A positive solution to addressing equity concerns seems a more appropriate way forward for economic evaluation. This would entail presenting essential information on the effects of health interventions in different population groups to decision-makers who would ultimately apply their own values and trade-offs and make decisions accordingly. The picture resulting from the review of empirical studies was extremely disappointing. None of the economic evaluations examined in the review provided enough information to allow decision-makers to judge the distributional consequences of alternative resource allocations. The studies examined were unsuitable for assessing any of three key distributional effects: - the effects of switching between the (mutually exclusive) interventions compared in an evaluation - the effects of providing an intervention selectively to a subset of the overall population that may potentially benefit from that intervention - the effects of prioritising between interventions competing for a given pool of resources. Only half of the economic evaluations reviewed measure outcomes that can be meaningfully used in comparisons of cost-effectiveness ratios across interventions. Only about one in eight of these studies report some information on the characteristics of the population that may benefit from the interventions appraised. A larger number of studies report information on the effects and cost-effectiveness of interventions in specific patient subgroups defined in terms of age, gender, risk profile or ethnic group. This information may help in assessing distributional effects of the second type mentioned above. However, these cost-effectiveness ratios should be calculated through direct comparisons between patient groups rather than indirectly, through comparisons of alternative interventions in different groups, as in all the evaluations reviewed. The three case studies show that a different emphasis on the equity dimension has been placed in different policy choices, and the equity principles that seem to have guided such policies vary significantly. The policies examined do not always reflect the social values elicited by the empirical studies reviewed in the first part of this report. This appears to be the case even when the process through which a policy is developed is more explicit and the evidence base is relatively strong (as in the renal transplantation case study), although it is probably fair to say that a wider availability of information on the likely distributional consequences of alternative policy options would, in many cases, have led to different policy choices.

Authors' recommendations: The main conclusion of this project is that existing economic evaluations do not represent an adequate guide to resource allocation decisions when the distributional effects of such decisions may be relevant. Not only do they not address explicitly the equity dimension, but they do not even provide the information that decision-makers would need to make a judgement on the desirability of alternative allocations.

Authors' methods: Systematic review, case study

Project Status: Completed

URL for project: http://www.hta.ac.uk/1054

Year Published: 2001

English language abstract: An English language summary is available

Publication Type: Not Assigned

Country: England, United Kingdom

Organisation Name: NIHR Health Technology Assessment programme

Contact Address: NIHR Journals Library, National Institute for Health and Care Research, Evaluation, Trials and Studies Coordinating Centre, Alpha House, University of Southampton Science Park, Southampton SO16 7NS, UK

Contact Name: journals.library@nihr.ac.uk

Contact Email: journals.library@nihr.ac.uk

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