Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Abstract: Choice has become a popular buzzword in health policy of late. Hillary Clinton's proposed expansion US health coverage is called 'America's Health Choices Plan'; Prime Minister Tony Blair's second term NHS reforms largely revolved around increasing user choice and provider competition; and The Netherlands recently revamped its health system and introduced choice and competition between private insurers. While traditional logic has held that more user choice would prompt an equity/efficiency tradeoff, a new breed of left leaning policy makers have begun to argue that greater choice and competition could be a vehicle to simultaneously promote equity AND efficiency.

This article and presentation will examine the equity implications of various types of extensions of user choice (choice of provider, choice of treatment, choice of insurer, choice of having insurance coverage), and discuss how in certain circumstances, contrary to traditional thinking, increased user choice may create incentives to increase the quality of care delivered to traditionally underserved communities. We argue that left-leaning policy-makers have traditionally focused more on process than quality and this has resulted in the creation of collectivist public services which stress the importance of equity, but still marginalize the care delivered to less advantaged users.

While by no means a panacea, drawing on international evidence from health care and education, we argue that public service schemes with increased choice and competition stand to maximize quality and efficiency and ameliorate many of the traditional sources of inequity of access which exist in collectivist health systems. Looking, in particular, at the current batch of choice reforms, we examine how policy-makers should employ market forces to promote equity, and discuss the policy steps which need to be taken to thwart any threats which market forces may pose for less advantaged users.