A cost-based equity weight for use in the economic evaluation of primary health care interventions: Case study of the Australian Indigenous population

Abstract

Background: Efficiency and equity are both important policy objectives in resource allocation. The discipline of health economics has traditionally focused on maximising efficiency, however addressing inequities in health also requires consideration. Methods to incorporate equity within economic evaluation techniques range from qualitative judgements to quantitative outcomes-based equity weights. Yet, due to definitional uncertainties and other inherent limitations, no method has been universally adopted to date. This paper proposes an alternative cost-based equity weight for use in the economic evaluation of interventions delivered from primary health care services. Methods. Equity is defined in terms of 'access' to health services, with the vertical equity objective to achieve 'equitable access for unequal need'. Using the Australian Indigenous population as an illustrative case study, the magnitude of the equity weight is constructed using the ratio of the costs of providing specific interventions via Indigenous primary health care services compared with the costs of the same interventions delivered via mainstream services. Applying this weight to the costs of subsequent interventions deflates the costs of provision via Indigenous health services, and thus makes comparisons with mainstream more equitable when applied during economic evaluation. Results: Based on achieving 'equitable access', existing measures of health inequity are suitable for establishing 'need', however the magnitude of health inequity is not necessarily proportional to the magnitude of resources required to redress it. Rather, equitable access may be better measured using appropriate methods of health service delivery for the target group. 'Equity of access' also suggests a focus on the processes of providing equitable health care rather than on outcomes, and therefore supports application of equity weights to the cost side rather than the outcomes side of the economic equation. Conclusion: Cost-based weights have the potential to provide a pragmatic method of equity weight construction which is both understandable to policy makers and sensitive to the needs of target groups. It could improve the evidence base for resource allocation decisions, and be generalised to other disadvantaged groups who share similar concepts of equity. Development of this decision-making tool represents a potentially important avenue for further health economics research. © 2009 Ong et al; licensee BioMed Central Ltd.