Education and debate

Marginal analysis in practice: an alternative to needs assessment for contracting health care

University of Glamorgan, Pontypridd, Mid Glamorgan CF37 1DL.

Prioritising health care services on the basis of total needs can lead to inefficient use of resources. A better option is to determine priorities by marginal analysis, which examines the effects of altering the existing balance of expenditure between health care programmes. Resources to support investment are released from disinvestments - that is, the strategy is resource neutral. Thus an increase in total health benefits is achieved independent of any gains that may result from increased spending on health. In 1989 the Welsh Health Planning Forum identified 10 health gain areas, outlining within each one where further investment was likely to produce health gains and where disinvestment might be considered. All Welsh districts then attempted, with varying degrees of success, to produce a resource neutral strategy. Mid Glamorgan further explored the possibility of using marginal analysis in producing its strategy and influencing its policy for contracting. Working groups for . . . [Full text of this article]

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