Resource Allocation in Health Care Shelley McGee PCMA WITS B.Pharm IV 8th August 2011

Recap of previous work

What is Resource Allocation? Distribution of resources – usually financial among competing groups of people or programmes 3 distinct levels of decision-making: Level 1: Allocating resources to healthcare versus other social needs Level 2: Allocating resources within the healthcare sector Level 3: Allocating resources among individual patients

Why is Resource Allocation needed? Increasing demand for healthcare services Rising costs of healthcare Demand outstrips the resources available Requires: Rationing Priority setting Difficult decisions have to be taken

Economic Principles in Priority Setting Opportunity Cost By investing resources in one way, some opportunity to invest in another way is lost. The Margin Shifting or changing the resource mix How best to invest additional funds How most efficiently to use existing resources

Ethical issues Should we invest more resources into healthcare versus other areas? Distribution of resources will benefit some and not others – how should choices be made? What values should influence? Is the current distribution of resources fair and equitable? Is the current distribution of resources efficient?

Priorities Priorities are not lexicographic It is not possible for us to order our expenditure in such a way as to take care of our total want from Priority 1 and then move on to Priority 2 Priorities are also a function of benefits and costs – which may be highly subjective and valued differently.

Multiple criteria for resource allocation Very uncommon for one aspect considered to override a resource allocation decision. Decisions are complex and priorities differ. Ad-hoc priority setting often results in inefficient and emotive distribution of resources Decisions may be inconsistent Multi-Criteria decision analysis (MCDA) has been suggested as a possible solution to assist decision-makers

Multi-Criteria Decision Analysis Examples of factors which might be included: Cost effectiveness Budget Impact Severity of the disease area in question Also sometimes called burden of disease Equity Analysis Vulnerable populations Availability of alternative options

Workshop exercise Resource allocation in a hospital setting