Tools of the trade: a comparative analysis of approaches to priority setting in healthcare

In many countries, local managers and clinicians have been given responsibility to set health priorities and allocate resources accordingly. Although tools have been suggested for use in aiding this process, knowledge of these tools within health regions is lacking and comparative analysis in the literature is limited. Several approaches to priority setting are critiqued from both practical and theoretical perspectives, and a tangible way forward for such activity is provided. The approaches analysed include: needs assessment, core services, economic evaluation including quality-adjusted life year league tables, and programme budgeting and marginal analysis (PBMA). Needs assessment fails to recognize underlying economic principles of opportunity cost and the margin, while core services ignores the margin and has had limited impact in practice. Economic evaluations can consider marginal costs and benefits, but cannot always be used to inform decisions in a timely manner. PBMA is based on underlying economic principles and can pragmatically respond to objectives related to both efficiency and equity. Although PBMA is not without challenges, from an economic perspective, it does seem to "get the thinking right", and, importantly, as a process, can incorporate some of the other approaches to priority setting discussed in this paper.