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Published on: February 16, 2011
Health care resource allocation: is the threshold rule good enough?
Joanne Lord1, George Laking, Alastair Fischer
1Tanaka Business School, Imperial College London, South Kensington campus, London SW7 2AZ, UK.
Journal of Health Services Research & Policy
|October 29, 2004
Summary
Resource allocation rules in healthcare are complex. A reallocation rule, where new programs replace less effective ones, can improve efficiency, but requires further research for practical application.
Area of Science:
- Health Economics
- Resource Allocation
- Decision Science
Background:
- Healthcare resource allocation relies on cost-effectiveness information.
- Comprehensive budget allocation is often impractical.
- Individual program assessment against a cost-effectiveness threshold is a common alternative.
Purpose of the Study:
- To review the foundations of resource allocation rules.
- To evaluate the efficiency and feasibility of different allocation approaches.
- To propose refinements for existing resource allocation rules.
Main Methods:
- Review of cost-effectiveness analysis principles.
- Discussion of assumptions in threshold-based allocation (calibration, returns to scale).
- Analysis of a proposed reallocation rule and its potential refinements.
Main Results:
- Threshold-based allocation is efficient under specific conditions (well-calibrated threshold, constant returns to scale).
- Programme indivisibility is generally not a major issue nationally.
- Threshold miscalibration and non-constant returns to scale can pose significant problems.
- A reallocation rule can prevent efficiency loss but may miss some improvements.
- Refinement of the reallocation rule requires estimating partial implementation costs and effects.
Conclusions:
- Existing resource allocation rules have limitations.
- A refined reallocation rule, considering partial implementation, shows promise.
- Further research is needed to assess the practicality of the proposed refined rule.
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