Efficiency and equity

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The term "efficiency" is defined as "maximizing well-being at the least cost to society.''26 The concept of efficiency embraces inputs (costs) and outputs and/or outcomes (benefits) and the relationship between them, with a society being judged in efficiency terms by the extent to which it maximizes the benefits for its population, given the resources at its disposal. However, a move towards efficiency may well result in a redistribution of resources in favor of the well-off, which may not be acceptable on grounds of fairness and equity. "Equity" is inextricably linked with notions of fairness and justice, with a healthcare intervention regarded as equitable if "similar outcomes were achieved for people with similar needs,'' but inequitable and unjust if "similar services were provided for people with different needs.''28,29

In setting the economic objectives of healthcare systems, both efficiency and equity considerations are vital components and must be given serious consideration. However, it is inevitable that in seeking to achieve a more equitable allocation of resources, a level of efficiency will have to be sacrificed, or, in attempting to move to a more efficient healthcare system, inequalities in provision or access to services may have to be compromised.

Health economics or the economics of health?

The two concepts of efficiency and equity lie at the heart of the discipline of health economics, described as the discipline of economics applied to the topic of health,30 or as "a logical and explicit framework to aid healthcare workers, decision-makers, governments, or society at large, to make choices on how best to use resources.''31 It may be argued that health systems have been victims of their own success. Contrary to what might have been expected, as the health of communities has improved, the demands placed on healthcare services have also increased. However, as the nature of healthcare problems experienced has changed, the costs of developing treatment and care programs to deal with such problems have also followed an upward trend. The level of resources available to fund such services has not increased to the same extent, and we are therefore left with the dilemma of how to allocate limited resources to meet the demands placed on the health services and maximize the healthcare benefit to society.

Obviously, additional resources would help, but the gap between demand and supply would still remain. In addition, the question has to be asked as to which area(s) of health care additional funds should be allocated. Similarly, decisions on where additional resources should be located need to be made with information relating to the effectiveness of interventions, the competence of healthcare professionals and the safety of healthcare facilities.

Healthcare professionals are increasingly being exposed to extremely powerful and emotive choices, and while health economics is unable to provide the solution to such complex and difficult issues, it does offer a mode of thinking which can assist in arriving at possible solutions (notice the use of the term "assist" here - health economics cannot by itself offer the solutions, it has to be part of a wide-ranging approach to decision-making) to these often contentious problems. It aims to identify which package or bundle of services would provide the maximum healthcare benefit for society within the envelope of resources available.


The extent of chronic pain poses a significant economic burden for patients, their families, health services, and societies. Cost of illness studies in pain tend to distinguish between direct costs and productivity or indirect costs, where direct costs represent the costs to the health services of patients suffering chronic pain (direct medical costs) and costs to the patients themselves in terms of travel costs and out-of-pocket expenses. Productivity costs are those which occur outside the healthcare sector and relate to losses of production, due to absenteeism and reduced productivity, plus those incurred through the informal care process - either as a result of a carer giving up paid employment or sacrificing leisure time to provide care, which would otherwise have been provided by formal care agencies.

These studies are useful as reference points for subsequent economic analyses,32 but rely heavily on estimates and underlying assumptions and should be treated with caution.33 In addition, there are theoretical debates about the most appropriate method for estimating productivity and indirect costs.33 The human capital approach considers the value of potentially lost production resulting from a disease in terms of absenteeism, reduced productivity, and disability or premature death at a specific age until the age of retirement. The alternative, friction cost method, assumes that production losses are confined to the period needed to replace the "sick" worker.34 The differences in results can be highly significant. For example, the indirect nonmedical costs of neck pain in the Netherlands in 1996 were estimated at US$ 530 million, using the human capital approach and US$ 96 million using the friction cost method.35 Similarly, the indirect cost of back pain in the UK in 1998 was estimated at £11 billion (US$ 20 billion) using the human capital approach and £5 billion (US$ 9 billion) using the friction cost method.36

Direct costs of pain management

In assessing the direct costs of pain management, it is conventional to categorize the components. For example, a German study estimated that the cost of back pain amounted to 10 billion DM (US$ 5 billion) each year, with 35 percent due to physician visits, 22 percent of costs accounted for by medication, 21 percent by rehabilitation,

17 percent physiotherapy, and 5 percent hospital costs.37 However, it is also worth noting that differences in estimates can occur due to what is included in the cost profile. For example, one US study estimated that total healthcare expenditure on back pain patients amounted to US$ 17.7 billion,38 whereas another study suggested that expenditure was US$ 105.4 billion.39 The difference was mainly due to the inclusion of all healthcare costs in patients with back pain in the latter study compared to the inclusion of only back care related expenditure in the former.

It is also possible to glean an indication by accessing published statistics. For example, in England during 2005, there were over 66 million prescriptions for analgesics (British National Formulary categories 4.7 - analgesics -and 10.1.1 - nonsteroidal anti-inflammatory drugs (NSAIDs)) aside from over-the-counter purchases, at a net ingredient cost of £510 million (US$ 940 million).

The vast majority of these were for nonopioids (34 million prescriptions and cost of £120 million (US$ 220 million)) and NSAIDs (18 million prescriptions and cost of £150 million (US$ 280 million)).40 However, a significant number of people with chronic pain may not actually consult anyone about their condition or choose to self-medicate. A survey of nearly 6000 people across Europe found that up to 27 percent of respondents had never sought medical help for their pain, and at least 38 percent of this group were in constant or daily pain.41 The extent to which people took nonprescription drugs varied between 23 and 59 percent,41 while a conservative estimate of over-the-counter medication relating to back pain amounted to £24 million (US$ 44 million).42

It has been estimated that primary care management of patients with chronic pain accounts for 4.6 million appointments per year in the UK, equivalent to 793 whole-time GPs, at a total cost of around £69 million (US$ 128 million).43 The study examined the treatment regimens used in patient management and found that poor efficacy was the trigger for almost as many consultations as poor tolerability. A study conducted in Denmark highlighted that considerably higher resource utilization use was observed in the pain population in both primary and secondary healthcare sectors, compared with a no-pain control group.44,45 An Australian study showed that chronic pain results in increased use of healthcare services, with a direct relationship between levels of pain disability and resource utilization.19

The economic impact associated with chronic pain is also evident in younger age groups. A study of 52 adolescents and their families, who had been suffering from pain for nearly five years, completed a modified version of the client service receipt inventory to generate the costs associated with chronic pain.46 The direct costs, which also included additional educational services (such as home tutoring and educational social workers) amounted to £4400 (US$ 8100) on average per adolescent/year, but with considerable variation across the sample group and conditions, with those in the pain management group having a mean direct cost of £7900 (US$ 14 600), while those in the rheumatology group had a mean of £2400 (US$ 4400). While the authors rightly argue that care should be exercised in the interpretation of their findings, and highlight that the costs recorded for their patient group are different from adult and general populations, they also advocated that effective treatments are needed in adolescence "to slow down the escalation of costs over time''.46

What is also apparent is that despite these high levels of resource utilization there remains what has been called the "crisis of inadequately treated pain'',47 with many misconceptions and ignorance among professionals regarding pain and its treatment18 and many patients either not being treated or receiving suboptimal care.10 One of the disturbing features is the discrepancy between professional and patient perspectives, as evidenced in a telephone survey of nearly 6000 patients with chronic pain and 1500 primary care physicians. The survey, conducted in eight European countries, showed that physicians generally believed that patients were well managed. However, it was also shown that up to 27 percent of people with pain did not seek medical help and of those who did, there were major flaws in their treatment and overall management.41 Another study showed that 40 percent of chronic pain patients were not satisfied with the treatment offered,48 similar to the percentage of patients across Europe who were not satisfied with their treatment.10

Productivity and indirect costs associated with pain

While costly, the direct costs of pain management are minor in comparison with the impact of pain on the economy,49 with a Danish study estimating that 1 million working days were lost annually as a result of chronic pain.50 As well as its impact on absenteeism, pain has a major impact on worker productivity, accounting for 85 percent of the total lower back pain costs per patient.51 It has been estimated that common pain conditions in the USA result in lost productivity amounting to US$ 61 billion per year, of which 77 percent was explained by reduced performance - presenteeism - and not work absence.52 An Australian study estimated that while the number of absent workdays was 9.9 million annually, reduced effectiveness workdays was estimated at 36.5 million per year, which elevated the productivity costs from AU$ 1.4 billion (US$ 1.1 billion), resulting from absenteeism, to AU$ 5.1 (US$ 3.8 billion) when both absenteeism and presenteeism were included.53 As well as the impact on absenteeism and presenteeism, the odds of leaving one's job because of ill health have been shown to be seven times higher among people with chronic pain problems than "normals".48

However, while the economic impact of chronic pain is substantial and imposes a greater economic burden than many other diseases,36 decision-makers and policymakers have tended to concentrate attention on a very minor component of the cost burden, namely prescription costs, because they are easy to measure and therefore an obvious target for restrictions.54 The acquisition costs of medication are but one very small and insignificant part of a complex and expensive jigsaw, and attempts to focus attention and energies on restricting expenditure in this one area fail to recognize the wide-reaching implications of pain management. Patients who can be safely transferred from intensive care settings to normal ward settings, patients who can be safely discharged home from hospital, and patients who do not place demands on doctors' time can release scarce resources for the use of other patients and return to normal functioning sooner. People whose pain can be effectively managed are less likely to be on long-term sickness absence and incapacity benefit. They are likely to be more productive and have fewer absences from school and further education. Investment in effective interventions and programs which deliver relief from pain and suffering and reductions in disability levels will generate economic and social returns that more than repay the original investment.55 In order to develop such a mode of thinking it is essential that "policy-makers are fully aware of all aspects associated with the costs of pain and its management.''5

One such example of this limited economic perspective in pain management is the iatrogenic costs associated with NSAIDs, which often result in costly side effects. These iatrogenic costs have been estimated at between £32 and £70 (US$ 58 and US$ 127) for each patient prescribed an NSAID in the UK, and the total effect on the National Health Service in the UK was estimated to be between £166 million (US$ 305 million) and £367 million (US$ 675 million) per year.56 In Sweden, for example, estimates of NSAID-induced gastric side effects range from SEK320 million to SEK589 million (US$ 35 million to US$ 64 million);57 in the Netherlands, they range between €39 million and €98 million (US$ 39 million to US$ 97 million);58 and in Quebec (Canada), approximately one Canadian dollar (US$ 0.66) would be added to patient costs for every day a patient was on NSAID therapy.59

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