Resource Allocation

 Resource allocation- is the distribution of resources – usually financial - among

competing groups of people or programs.
 Health care resources are defined as all materials, personnel, facilities, funds, and
anything else that can be used for providing health care services. Health care has long
been a limited resource for which there has been an unlimited demand; everyone needs
health care.
The potential problems associated with decisions surrounding the point-of-care allocation of
resources are that providers’ personal preferences and biases, as well as existing resources, may
influence decisions made on behalf of patients. Without a framework based on moral or ethical
structures, these decisions may result in marked patient-to-patient variability. Therefore, the
challenge is to make those decisions consistently in a way that is ethically and morally correct.
When we talk about allocation of funds for healthcare, we need to consider three 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.
Why is Resource Allocation needed?
Because of increasing demand for healthcare services and rising costs to provide those services,
Americans must choose how to allocate healthcare dollars.
Rising cost of healthcare
Resources spent on healthcare have increased over the last century. Americans are spending far
more resources on healthcare than do citizens of any other industrialized nation. Why?
• Continued medical advances have led to more accurate diagnoses and better treatments, but
also have increased the cost of healthcare.
• The aging population is growing. Nearly 36 million Americans (more than the entire population
of Canada) are age 65 or older and account for a majority of healthcare expenditures.
• More people are living with chronic disease and disabilities, including AIDS.
Healthcare rationing

 Rationing refers to the conscious decision to exclude certain people from a service or
treatment that they need. Rationing takes many forms. Rationing occurs when a state
determines who is eligible for Medical Assistance insurance. It also occurs when
deciding which patient on the waiting list gets an organ transplant. Rationing is also
utilized when prices are set for health insurance and health services that some people
cannot afford.
In many other countries throughout the world, including those with universal health insurance,
health care is still a scarce resource, and, therefore, strategies to allocate health care resources are
challenging and ever present. Whether or not we like the term, we are compelled to “ration”
health care resources worldwide. The real question becomes how best to accomplish it.
Allocation strategies to ration health care occur at 3 levels:
1. Macro allocation or Policy level - societies determine allocation strategies through legislation,
health insurance plans, and government funding mandates. These macro allocation strategies are
about “directly and openly controlling the allocation of resources”.
2. Meso allocation or Organizational level - allocation decisions are made by using policies,
clinical practice guidelines, and protocols by the hospitals and other organizations providing
health care services.
3. Micro allocation level – made in the case of individual patients, primarily by physicians.
Focuses on decisions regarding particular persons. It often involves “patient selection”:
determining which patient among those who need a particular scarce resource, such as a heart
transplant, should receive treatment.
Resource allocation in health should satisfy two main ethical criteria:
1. Cost-effective - limited resources for health should be allocated to maximize the health
benefits for the population served.
2. Equitable or just - equity is concerned with the distribution of benefits and costs to distinct
individuals or groups.
Although there are many methods proposed to justly allocate health care resources,
including some based on cost-effectiveness and age, these methods have been found to have both
philosophical and practical problems. In response to these difficulties, Emanuel proposed 4
principles for decisions involving equitable allocation of health care resources. These
principles are intended to provide moral guidance for health care resource allocation decisions,
not to provide specifics on how such resources should be allocated.
1. The first principle is that the allocation of health care resources should improve people’s
health.
2. The second principle is that patients and members or prospective members of health care
organizations should be informed about how health care resources are allocated and the
rationale for the allocation.
3. The third principle carries the second a step further; once provided with information,
patients, members, and prospective members of a health care organization should have
the opportunity to consent to or deny that organization’s allocation of health care
resources.
4. The fourth principle states that conflicts of interest should be minimized by individuals
making decisions regarding the allocation of health care resources.