EQUITY AND EFFICIENCY: CLARIFYING CONFUSION FOR ENGLISH ACUTE HOSPITALS

Effective management of health care resources includes containing total costs and improving equity and efficiency. It has been argued that the only way to contain costs is by determining future finance by the principle of capitation. That principle underlies English health authorities' revenue targets which are intended to set the direction for future equitable cash allocations. A case study of an inner-city authority illustrates how its target for acute services confuses equity and efficiency. It is argued that equity is most effectively promoted not by devolving responsibility for equity to such authorities by financial targets, but by higher-level, service-based strategies. Indicators are suggested which enable distinctions to be made between equity and efficiency.