Economics in Health

A Study of Equity, Efficiency and Effectiveness

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Abstract

According to an article by Plos Medicine (Irwin A, 2006), despite the unequalled amount of

global assets and technological advancements in today’s world, health inequity is increasing,

making the poor section of society more underprivileged (lack of access to health services,

low life expectancy rates, high mortality rates and so on ).

Arah says in his paper (Arah, Klazinga, Delnoij, Asbroek, & Custers, 2003) that Australia has

a distinguished and invariable national health care regime which is maintained jointly by the

governments at the national and state level. Its health performance framework based on

determinants of health, has three tiers. They are as follows:

1) ‘Health status and outcomes’: includes dimensions like state of health, human functions,

expected years to be lived, well-being and mortality rates.

2) ‘Determinants of health’: includes factors related to the society, economy, environment,

community, health and the individuals.

3) ‘Health system performance’: includes dimensions like effectiveness, efficiency, safety

and so on.

Equity being the common factor, binds all of the above together.

Burgess (Burgess, 2012) states in his paper, that a crucial obstacle to the developments of the

above factors is the confusion in understanding these terminologies.

The objective of this paper is to define and discus three approaches to three concepts, namely,

‘equity’, ‘efficiency’ and ‘effectiveness’ and bring out the interrelationships between them.