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

2. Recap of previous work

3. 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

4. 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

5. 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

6. 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?

7. 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.

8. 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

9. 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

10. Workshop exercise
Resource allocation in a hospital setting