Prioritising Health Services
A background paper for the
National Health Committee
OCTOBER 2004
The National Advisory Committee on Health and Disability (the National Health Committee
or the NHC) is an independent committee appointed by, and reporting directly to, the New
Zealand Minister of Health.
Members of the National Health Committee
Robert Logan (Chair)
Geoff Fougere
Kevin Hague
Riripeti Haretuku
Linda Holloway
Andrew Moore
Althea Page-Carruth
Neil Pearce
Lynette Stewart
Lorna Sullivan (until August 2004)
Api Talemaitoga
Gwen Tepania-Palmer
The National Health Committee would like to thank those who provided comments on earlier
drafts of this paper, including Grace Campbell-MacDonald, Judy Kavanagh, and Jackie
Cumming. This paper represents the work of the NHC, however, and does not necessarily
reflect the views of these commentators.
This paper is available on the NHC’s website: http://www.nhc.govt.nz
INTRODUCTION.................................................................................................................... 1
EXECUTIVE SUMMARY ..................................................................................................... 2
SECTION ONE: INTERNATIONAL EXPERIENCES ...................................................... 4
INTRODUCTION.................................................................................................................... 4
WHY PRIORITISE?.................................................................................................................... 4
IMPLICIT VS EXPLICIT PRIORITISATION .................................................................................... 5
LEVELS OF PRIORITISATION .................................................................................................... 6
Macro Layer....................................................................................................................... 6
Meso Layer......................................................................................................................... 7
Micro Layer ....................................................................................................................... 7
COMMON INTERNATIONAL THEMES........................................................................... 8
1. THE IMPORTANCE OF VALUES AND PRINCIPLES................................................................... 8
1.1 The Netherlands .......................................................................................................... 8
1.2 Sweden ........................................................................................................................ 9
2. TECHNICAL AND INSTITUTIONAL APPROACHES................................................................. 10
2.1 Technical approaches ............................................................................................... 11
2.2 Critiques of technical approaches ............................................................................ 12
2.3 Institutional approaches ........................................................................................... 14
2.4 “Accountability for Reasonableness”....................................................................... 15
2.5 Shifting approaches: the Norwegian experience ...................................................... 16
3. DEFINING CORE SERVICES AND THE EXCLUSION OF HEALTH SERVICES ............................. 17
3.1 Rationing by exclusion: the Oregon experience ....................................................... 18
3.2 The absence of exclusion .......................................................................................... 19
4. EVIDENCE BASED MEDICINE .............................................................................................. 20
4.1 Clinical Guidelines ................................................................................................... 21
4.2 Technology Assessment ............................................................................................. 22
4.3 EBM in practice: the UK experience ........................................................................ 22
4.4 EBM in practice: the Dutch experience .................................................................... 23
5. INCORPORATING CLINICIANS, PATIENTS AND THE PUBLIC ................................................. 24
5.1 Why involve stakeholders? ........................................................................................ 24
5.2 How to involve stakeholders ..................................................................................... 26
5.3 The NICE approach to stakeholder involvement ...................................................... 28
SUMMARY ............................................................................................................................ 29
SECTION TWO: THE NEW ZEALAND EXPERIENCE................................................ 30
INTRODUCTION.................................................................................................................. 30
THE PURCHASER-PROVIDER SPLIT AND THE ORIGINS OF PRIORITISATION DEBATES ............... 30
OPENING THE DISCUSSION: THE CORE SERVICES COMMITTEE ..................... 31
THE NATIONAL HEALTH COMMITTEE ................................................................................... 32
MACRO LAYER PRIORITISATION ................................................................................ 33
PHARMAC: AN INTERNATIONAL ANOMALY ........................................................................... 33
MICRO LAYER PRIORITISATION AND EVIDENCE BASED MEDICINE ............. 35
CLINICAL GUIDELINES AND THE NEW ZEALAND GUIDELINES GROUP ................................... 35
CLINICAL PRIORITY ACCESS CRITERIA ................................................................................. 36
MESO-LAYER PRIORITISATION ................................................................................... 37
THE REGIONAL HEALTH AUTHORITIES (1997 – 1998) .......................................................... 38
THE HEALTH FUNDING AUTHORITY (1998 – 2000) .............................................................. 38
THE PRESENT PICTURE: DISTRICT HEALTH BOARDS AND DEVOLUTION ................................ 39
ONGOING ISSUES AT THE MESO-LAYER ................................................................................. 42
Staff capacity.................................................................................................................... 42
Political factors................................................................................................................ 42
Macro-layer constraints................................................................................................... 43
Availability of information ............................................................................................... 43
Consistency of approaches .............................................................................................. 44
SUMMARY ............................................................................................................................ 44
APPENDIX: DEVELOPMENT AND ASSESSMENT PROCESSES OF THE
NATIONAL INSTITUTE FOR CLINICAL EFFECTIVENESS ..................................... 46
GUIDELINE DEVELOPMENT ................................................................................................... 46
TECHNOLOGY ASSESSMENT .................................................................................................. 47
INTRODUCTION
Almost all decisions made in the health sector are, to some extent, prioritisation decisions.
We live in an environment of limited resources; not only money, but also time, space, and
available staff all constrain the ability of both the system to provide, and people to access,
health care services and health promotion programs. Consequently, these resources need to
be allocated in some fashion, and unless we allocate them completely randomly – and
arguably even then – we are engaging in prioritisation.
However, while the role played by politicians, public servants, and administrators in resource
allocation might be relatively clear, the full spectrum of those who play a part in prioritisation
includes all those with any sort of decision-making power. In particular, health professionals
prescribe interventions that require resources and, while the type and features of the
intervention may be constrained by other decision-makers, clinicians are therefore the ones
who mainly control (in consultation with the people concerned) the demand for resources.
Even if a professional ignores all other considerations and prescribes interventions whenever
they feel a person will benefit, they are still choosing to allocate resources in a particular
way; in this case purely on the basis of effectiveness.
Prioritisation is therefore an issue of relevance to all in the health sector, and the question of
how we should prioritise underlies almost every policy issue in health and many issues of
professional practice. The National Health Committee (NHC) firmly believes that the issue
of prioritisation is one that should be discussed as openly and widely as possible both inside
the health sector and amongst the general public. This is both an ethical principle – the
public has a right to have input into how public resources are allocated – and a practical one.
If practitioners and the public do not accept and engage with the need to prioritise, then the
prioritisation decisions that are made will likely lead to dissatisfaction and the subversion of
processes for doing so.
This paper has been produced by the committee to inform its future work programme on
prioritisation. It was originally intended as an internal working paper, but the committee
believes that this work will also be of interest to others involved, in the widest sense, in the
health and disability sector. The paper is structured in two sections, the first of which
provides a basic introduction to key concepts in prioritisation, and an overview of themes that
have emerged in the international development of explicit prioritisation systems. The second
section looks at the development of explicit prioritisation in New Zealand, from the work of
the Core Services Committee in the early 1990s through to the current way in which
prioritisation is approached at each layer of the New Zealand health sector.
1
EXECUTIVE SUMMARY
Internationally, there exists some debate over what precisely constitutes rationing of health
interventions. However, the key element all constructions of prioritisation have in common
is the notion of scarcity: when need for interventions cannot be met by the supply, some form
of priority setting must occur. This can be done either explicitly or implicitly.
Traditionally, implicit approaches have dominated health sector decision-making. In these
models, decision-makers act without reference to a set of publicly defined criteria. This has
the advantage of allowing significant flexibility in the setting of priorities and allocation of
resources, but has also been criticised for leading to inefficient and ineffective decisions, as
well as being fundamentally at odds with principles of democratic accountability. It may
also lead to prioritisation decision-makers at different levels making decisions according to
conflicting criteria.
Explicit prioritisation, conversely, involves setting priorities through a clear, transparent
process and according to publicly defined criteria. Advocates of explicit processes argue that
they improve the quality of decision-making and accountability, while opponents claim that
they are politically and practically difficult, and cannot account for the variety of contexts in
which health interventions can potentially be offered.
Whether explicit or implicit, prioritisation decisions can be seen as occurring at three broad
layers in publicly funded health systems.1 The first of these is the macro- or political layer, at
which decisions are made regarding the determination of the overall health budget and what
health interventions will be able to access this public funding. The second is that of the
meso- or administrative layer, at which the resources to support the provision of interventions
are allocated. Finally, there exists the micro- or clinical layer, at which individual health
practitioners, in conjunction with patients, determine who will actually receive access to
interventions.
Internationally, the development of explicit prioritisation processes has been a difficult and
controversial process. However, while the specifics of implementing such systems have
varied considerably, there are certain key themes running through the experiences of all
jurisdictions. The first of these is the importance of identifying values and principles; there is
a common recognition that the concepts that underlie decisions must be clear and publicly
discussed. Without this, the results of prioritisation processes can be out-of-step with public
opinion and the legitimacy of both the resulting decisions and the process as a whole, can be
critically impaired.
A second common theme relates to what should be the prime concern in the development of
prioritisation processes – a theme that has developed over two phases. In the first of these,
“technical” approaches dominated that emphasised the central importance of identifying
information and developing fixed rules for its use. These were intended to lead to clear and
unambiguous rationales for making decisions. Such approaches have been subject to
significant critique, however, leading to a second phase of “institutional” approaches to
explicit prioritisation. In these approaches, information in and of itself is seen as of lesser
importance than the development of appropriate institutions for using this information.
The third major theme relates to the exclusion of specific interventions from the receipt of
public funding. While several jurisdictions have attempted to use explicit prioritisation to
2
exclude specific interventions from funding, the State of Oregon in the United States of
America is the only one generally considered to have achieved substantial success in this
regard. Elsewhere, the strength of professional and practical arguments against such attempts
has led to exclusions being implemented to only a very limited extent.
The fourth international theme consists of the growth of evidence based medicine (EBM) as
an aid to prioritisation decisions. Consisting of two main branches – clinical guidelines and
technology assessment – the goal of EBM is to ensure that decisions made in the health
system are supported by sound evidence. There remain important questions surrounding
EBM, such as the tension between clinical and research settings and the types of knowledge
gained from each, and a lack of clarity regarding the actual benefits of implementing
evidence based practice. However, there is a clear international trend towards enhancing the
use of such techniques – at worst there is no evidence they have a detrimental effect on health
outcomes, and their potential positive impact for both individuals and the health system is
significant.
The final major theme is the need to involve stakeholders in prioritisation decisions. While
debate exists over who should be involved, how they should be involved, and the extent to
which they should be involved, there is a clear trend toward involving patient groups, health
professionals, and other interested groups – including the general public – in decisions over
the allocation of health resources. Not only is this trend due to the information stakeholders
can provide to higher-level decision-makers, but also on the potential for information to flow
in the opposite direction. Involving stakeholders in decisions can enhance awareness of the
issues and constraints that surround decision-making, and thus make them more accepting of
prioritisation outcomes, or more willing to address the factors that create these constraints.
Running through all these major themes is one more common issue: the difficult and
controversial nature of prioritisation in general, and establishing explicit prioritisation
systems in particular. It is possible to link the previous themes together and thereby talk
about a dominant international approach to prioritisation involving the explicit identification
of principles, a concentration on processes over technical solutions, placing emphasis on
clinical flexibility, promoting evidence based approaches to decision-making, and enhancing
the involvement of stakeholders. The translation of this general approach into practice,
however, is far from straightforward.
3
SECTION ONE: INTERNATIONAL EXPERIENCES
Introduction
This section presents a thematic overview of the experiences of countries other than New
Zealand in establishing explicit priority setting processes for the publicly funded element of
their health sector.i In terms of analysing these experiences, five major themes can be
identified:
1. the centrality of discussions over values and principles
2. the contrast between technical and institutional approaches
3. the problematic nature of excluding specific health services from receiving
funds
4. the widespread growth of evidence-based medicine
5. the involvement of clinicians, patients and the public in prioritisation.
Strung through all these five themes is a further common thread of the tension between the
establishment of explicit processes and the place of clinical autonomy and freedom.
Before discussing these themes, however, this paper will examine some of the basic questions
underlying the development of prioritisation processes: reasons for prioritising, implicit and
explicit forms of priority setting, and the different layers at which prioritisation decisions are
made.
Why prioritise?
At heart, discussions about prioritisation are discussions about access to healthcare: who has
access to health interventions,ii what health interventions are available to access, and when
people are able to access those interventions. The dominant view of prioritisation, often
couched in terms drawing on economic market theory, is that priority setting in the health
sector is inevitable, as access to healthcare exists in an environment of “scarcity”. Resources
that support health interventions are always restricted, relative to the potential demand for
them.2 There exists a limited number of health professionals to perform interventions, a
limited amount of time in which interventions can be performed, a limited number of areas in
which an intervention can take place, and a limited amount of funding to support these
interventions. All these factors place limits on the ability of individuals to access health
services to some extent – although those limits will be greater or lesser depending on the
specific level of resources available. The range of valuable interventions that could
potentially be offered, in contrast, is virtually limitless and ever-expanding due to new
research, refinement, and technological development.
It is worth noting that this paper uses the terms “priority setting”, “prioritisation”, and “rationing”
interchangeably. While some have argued that the term “rationing” should be preserved for use only in
reference to micro-level prioritisation decisions, this paper follows Ham and Coulter in finding that this
terminological distinction adds little.2 Similarly, while the terms “priority setting” and “prioritisation” can be
used to refer to different phenomena, both involve the same issues and trends.
ii
In this paper, the term “health intervention” is used to refer to the entirety of the wide variety of measures and
tools used within the health sector to maintain or improve health status. However, while prioritising measures
aimed at supporting the lives of people with disabilities involves many of the same issues as other interventions,
this paper has been written primarily from the perspective of prioritising health, rather than disability support,
services.
i
4
This particular construction of rationing is not universally accepted. Light and Hughes, for
example, have argued that this definition is so wide that the idea becomes an essentially
meaningless concept, and other theorists contend that the term “rationing” should be reserved
only for situations in which a person is denied access to interventions that they would
otherwise have chosen to receive.2 What all conceptions of prioritisation have in common,
however, is the notion that priority setting must occur when there is greater demand for a
health intervention than can be met by available resources.
Scarcity then, is the key reason for prioritising, and the reason why discussions of
prioritisation often go in hand-in-hand with those of health sector funding. Even if
prioritisation is essentially an inevitable activity in all modern economic and political
systems, the fewer resources available to allocate the more important, yet often more difficult
and controversial, such decisions will become. To quote the World Health Organization, “it
is difficult to think about priorities at all [in the former Soviet Union] when the national
health budget has declined from US$150 to just US¢40 per capita.”3 While prioritisation
policy concerns how to allocate available resources, funding policy determines what
resources are available to allocate, and thus the two areas are closely linked. Indeed, in some
cases discussion of prioritisation processes has actually led to increases in health funding, as
it has highlighted the need for further resources if the goals of the health system are to be
effectively achieved.4
Implicit vs explicit prioritisation
Irrespective of basic assumptions regarding the nature and inevitability of rationing, there is
agreement that prioritisation can occur in two ways: implicitly and explicitly. In the first of
these, prioritisation decisions are made but the reasoning behind them is not made clear, and
access to interventions is rationed without reference to a publicly defined set of criteria. iii
Explicit prioritisation in contrast, as the name suggests, involves the establishment of clear,
publicly available criteria and processes specifically designed to set priorities.
Traditionally, the implicit approach has dominated priority setting in publicly funded health
systems. Since the late 1980s, however, there has been increasing international interest in the
development of explicit prioritisation processes. Driven by a combination of new health
interventions and limited health budgets,4 a desire on the part of some theorists to develop a
more “rational” approach to decision-making in health systems,5 and high-profile cases of
individuals being denied possible treatment due to a shortage of public resources,6 many
jurisdictions have attempted to engage with the question of how to prioritise access to health
interventions. As well as New Zealand, the American State of Oregon, Scandinavian
countries, the United Kingdom, the Netherlands, the Council of Europe, Israel, and Canada
have undertaken major projects on prioritisation, while other jurisdictions such as Australia
and Iceland are at least examining which ideas should underlie the prioritisation of access to
health interventions.
The aims of these jurisdictions have been to consider both how prioritisation decisions should
be made and how the quality of these decisions can be improved. However, the development
and implementation of explicit approaches to prioritisation has been a difficult and
iii
Implicit decision-making can involve a shared informal set of criteria collectively used by a group of decisionmakers, or decision-making involving no openly acknowledged criteria whatsoever. In either case, however, the
key feature is that the criteria are not made clear to the public at large, nor formally defined in any manner.
5
controversial activity wherever it has been attempted. Not only have specific elements of
explicit priority setting processes been criticised, but several theorists have defended implicit
prioritisation on the grounds that explicit prioritisation is both politically impractical and
incapable of accounting for the diverse contexts in which access to health interventions must
be allocated.2
It should also be noted that the development of explicit prioritisation processes has
concentrated largely on the funding and allocation of health interventions – rationing
expenditure on pharmaceuticals, medical devices, particular procedures and so forth. This
focus can be seen as a significant failure, as access to health interventions is dependent on
more than the simple availability of funding. Expenditure on physical resources (such as
hospital beds) and professional resources (health professionals) are also vital factors that
influence access to the health system, but they have been largely absent from discussions of
priority setting, and rationing in this area is often left implicit.iv
It has been the longstanding position of the National Health Committee, from its origin as the
Core Services Committee, that implicit prioritisation is fundamentally less desirable than
explicit forms. As the committee argued in 1997:
We must stop making decisions about which services are available and who has
first call on them behind the scenes and in response to immediate circumstances,
rather than in the open and in the wider context … The National Health
Committee considers the policy environment of our health and disability support
system should be based on conscious and explicit principles.7
Levels of Prioritisation
Prioritisation decision-making in the health sector occurs at several different levels. Klein,
for example, has identified five different levels of priority setting:1
1.
2.
3.
4.
5.
The overall level of funding to be allocated to health services.
The distribution of the budget between geographical areas and services.
The allocation of resources to particular forms of treatment.
The choice of which patients should receive access to treatment.
Decisions on how much to spend on individual patients.
These levels can be grouped into “macro” (political), “meso” (institutional) and “micro”
(individual) layers. In general, levels one and two are macro-layer, level three is institutional,
and levels four and five are micro-layer.
Macro Layer
The most fundamental point at which prioritisation decisions are made is that of central
government in its determination of the overall health budget. As governments do not have
unlimited resources, and few if any governments are likely to have the required capital to
iv
To some extent this may reflect the ability of the supply of these resources to be affected by health decisionmakers, as ongoing debates over workforce planning in the health sector suggest.
6
satisfy every possible demand for funding, the government must set the priority of
expenditure on the health sector in relation to such areas as education, defence or culture and
heritage programs. Of course, the holistic nature of policy means that expenditure on an area
nominally outside the health sector (such as housing) may actually have significant health
benefits. Prioritisation at this level does not therefore represent prioritisation of “health” per
se, so much as prioritisation of funding for those services that receive funding through the
health vote.v
Below this level is the large-scale allocation of the overall health budget to different elements
of the health system. Included in this level is the decision whether or not to exclude
particular interventions from receiving public funding, thus restricting their availability to
those able to obtain them outside the publicly funded health system.
Meso Layer
After these two fundamental prioritisation levels comes a third level of prioritisation, where
the funding determined at the macro-level is allocated to specific interventions. Prioritisation
of capital and staffing investment can also be considered to occur at this level. This level of
priority setting usually occurs either within specific institutions such as individual hospitals,
or within regional authorities that have responsibility for overseeing the provision of health
services within a given district. It is, however, possible for this level to occur at a
combination of central government and devolved points if, for example, a government
devolves the allocation of most health funding but continues to directly oversee the provision
of certain treatments.
Micro Layer
The final layer of prioritisation is that of clinical decision-making made by individual health
practitioners and patients. This involves determining who exactly receives a particular
intervention, and for how long. While health professionals are the dominant decision-makers
at this point, those requiring health interventions also play a role at this level by agreeing to
receive those interventions.
The micro-layer may not initially seem like a point where prioritisation occurs. However, as
noted earlier, “prioritisation” is essentially about determining access to health interventions,
and this micro-layer – although constrained by decisions at higher levels – is the point at
which theoretical access to interventions is translated into practice. If the macro- and mesolayers involve prioritising the supply of interventions, micro-layer prioritisation involves
decisions relating to their demand.
This particular prioritisation layer can be one of the most difficult at which to set priorities, as
it involves direct contact with individuals in need of health interventions. Whereas macroand meso-layer prioritisation deal with setting priorities in the abstract, at the micro-layer
decisions become far more personal. Health professionals must relate decisions made at
higher layers to the specific context in which people present themselves, and given the nearly
v
It is worth noting that, while most apparent at the macro-layer, this same point can apply to priority-setting at
lower points as well.
7
endless variety of factors that can impact on an individual’s need for interventions this can be
a highly complex – and often emotionally draining – task.
These three layers are best viewed not as neatly-separated stages, but rather portions of a
decision-making continuum that involves significant interaction between levels. For
example, waiting lists and booking systems, as vehicles whereby health systems and
providers organise the provision of health interventions,8 are meso-level prioritisation tools.
However, exactly where a given person is placed on a list usually involves a significant level
of micro-layer decision-making in, for example, interpreting access guidelines in terms of an
individual case. Similarly, the end results of micro-layer prioritisation decisions – most
clearly publicity over denial of treatments – can have significant impacts on priority-setting at
higher layers.
COMMON INTERNATIONAL THEMES
1. The importance of values and principles
The most fundamental theme in the development of prioritisation processes is the central role
of principles and values in prioritisation. If access to health interventions is to be rationed,
then this clearly requires a basis on which such rationing decisions can be made. This does
not mean, however, that prioritisation requires active discussion of these principles and
values. A key criticism of implicit approaches to priority setting, for example, is precisely
that the underlying principles that drive decision-making are hidden.2 Furthermore,
identifying values and principles as at the heart of prioritisation immediately begs the
question of whose values and principles should be considered in the development of
prioritisation processes – an issue that will be returned to in section five of this paper.
While there is consensus that values and principles lie at the heart of priority setting,
however, the actual principles used to guide prioritisation decisions vary considerably
between jurisdictions. Although there are common themes, such as some manner of
reflecting the impact of a condition on a person’s quality of life and the cost of providing
treatment, the specific values advocated vary widely. The State of Oregon, for example,
identified thirteen principles – although it divided these into three main groups – while other
jurisdictions have confined themselves to three or four.6 The divergent experiences of
Sweden and the Netherlands provide interesting contrasts in terms of the principles used to
drive prioritisation.
1.1 The Netherlands
Discussions over priority setting first made an appearance in the Netherlands in the 1980s,
when the Dutch Health Insurance Council (Zeikenfondsraad) began promoting increased
investment in Technology Assessment (discussed below in section four) and subjecting new
medical technologies to cost-effectiveness analysis before permitting their use to be publicly
funded.9
Prioritisation became a major public issue in 1988, however, with the
commencement of a concerted effort to reform expenditure in the Dutch healthcare sector.
The primary result of this was the 1991 report by the Committee on Choices in Health Care
(the Dunning Committee), which advocated four major strategies for reform:9
8




promoting investment in health technology assessment
promoting the use of standardised guidelines and protocols in clinical decisionmaking
developing criteria for access to waiting lists and relative priorities within waiting lists
establishing a group of core services that should receive public funding, determined
through the application of a framework of values and principles.
With regard to the last of these strategies, the Dunning Committee proposed four principles
that should guide the delineation of core services. These were: is the particular treatment
necessary? Is it effective? Is it efficient? And finally, could its payment be left to individual
responsibility? Together, these principles were referred to as “Dunning’s Funnel”, due to
their hierarchical nature. Priority setting should first involve determining if a service was
necessary. If the answer was yes, then decision-makers should proceed to asking whether or
not it was effective and so forth.
These principles were not simply intended to guide the delineation of core services, however,
but were also intended to guide priority setting at all levels of the Dutch healthcare system.
Importantly, however, the Dunning Committee also argued that the first principle – that of
necessity – should be formulated in different ways depending on the level at which a
prioritisation decision was being made. At the macro level this decision should be made from
the point of view of the community as a whole, at the meso level from a professional
perspective, and at the micro level from the viewpoint of the individual patient.6
The Funnel principles immediately resulted in significant controversy – much of this deriving
from the intention that these would be used to exclude services from funding at the macro
level. The principle of necessity at this level in particular attracted criticism, as it placed the
needs of the community above the needs of the individual patient – the ultimate determinant
of whether or not a given treatment would be available through the publicly funded health
system would not be the benefit that would accrue to the person receiving it, but rather the
benefit that would accrue to society as a whole.6,9 The adverse public reaction to these
principles severely hamstrung the Dunning report’s recommendations.
1.2 Sweden
In contrast to the Netherlands, Sweden has never attempted to exclude specific services from
public funding. The Swedish experience with prioritisation began in 1992 with the
appointment of a Parliamentary Priorities Commission (PPC) to advise on the issue. From its
inception, this Commission recognised the importance of incorporating widespread input into
the establishment of priorities, and made an effort to include viewpoints explicitly
representing a range of approaches to healthcare. The Commission also made the ethical,
rather than economic, aspect of prioritisation their key concern.10 In other words, the PPC
did not see its role as ensuring that the resources of the health system were distributed in an
economically efficient manner, but rather as ensuring that the beliefs of the public regarding
access to health interventions were reflected in practice.
The PPC produced a discussion document to stimulate public input in 1993, and a final report
in 1995. In this report, the Commission explicitly rejected the definition of services that
should or should not be funded, choosing instead to develop a list of principles that should
guide prioritisation decision-making. These principles were:6
9
1. The principle of human dignity: all people are equal in dignity, regardless of personal
characteristics and functions in society.
2. The principle of need and solidarity: resources should be committed to the person or
activity most in need of them.
3. The principle of cost-efficiency: when choosing between different fields of activity or
measures, a reasonable relation between cost and effect, measured in improved health
and improved quality of life, should be aimed for.
The Commission then used these principles to develop a series of priority categories to aid in
priority setting decisions at both the political/administrative (ie; macro and meso) and clinical
(ie; micro) layers.
Of particular interest in the Swedish case is the relative emphasis placed on the principle of
cost-efficiency. Given that prioritisation processes concern the allocation of scarce resources,
it is unsurprising that a major element in most prioritisation systems has been ensuring that
such resources – primarily financial resources – are spent in an efficient manner. Although
the PPC did include this among its principles, it was somewhat unusual in ascribing far less
value to it than other jurisdictions.
In the first place, the principles promulgated by the Commission were hierarchal, so that
principles one and two – both of which focussed primarily on questions of social justice and
the qualities of patients rather than services – trumped the economic utility of a particular
intervention in determining access to health services. In addition to this, the Commission
explicitly rejected the possibility of using principle three to prioritise between treatments for
different conditions. The rationale behind this lack of emphasis may stem in large part from
cultural attitudes towards healthcare and the health system in Sweden. As Rehnberg points
out, belief in ensuring fair and equitable access to health services is a principle that is
strongly ingrained in the Swedish health system.11
Consequently, both Swedish
policymakers and the public may be more tolerant of a health system that appears
economically inefficient if such a system still embodies these principles. Conversely, a
system seen to be placing too much emphasis on efficiency at the expense of fairness and
equity may be less acceptable than in other jurisdictions.
Determining the values and principles that should underlie the rationing of access to health
interventions is, however, only the first step in developing explicit prioritisation systems.
The real challenge occurs when the attempt is made to translate these principles into practice.
2. Technical and institutional approaches
Once principles and values have been defined, the next step in developing an explicit
prioritisation process is determining the nature of the process that will be used to make
prioritisation decisions. In this respect, there are two main theoretical approaches to
developing priority setting systems. It should be emphasised that both of these perspectives
still presuppose an explicit process – they both involve clearly articulating the foundation on
which prioritisation decisions are made, and, most importantly, a formal recognition that
there is a need to ration available health resources.
It should also be noted that in practice the distinction between these two schools of thought is
often less clear-cut than has been presented here – this discussion emphasises the differences
10
between the two in order to better illustrate their underlying philosophical distinctions. In
practice, few of those who adopt a technical view of prioritisation would ignore the need to
develop effective institutions, while most institutionalists would admit that there is a need to
ensure decisions are based on some form of “good” information. The difference between the
two approaches is essentially based on the relative emphasis each gives to the two elements
of the prioritisation process.
2.1 Technical approaches
Firstly, there exists the technical perspective on making prioritisation decisions. Grounded
strongly in rationalist theories of knowledge, policy and decision-making, this model
emphasises the importance of having the right information available on which to base such
decisions, and the development of an appropriate set of rules to apply when making priority
decisions. The aim of this approach is to develop a comparatively objective system of
prioritisation: standardised techniques are used to quantify the benefits of providing a
particular health service, and from this relative priorities can be determined in a manner that
provides a clear, unambiguous rationale for the decisions that have been made. 12 The
theoretical ideal of this approach would be a formula that could accurately measure and
account for all relevant aspects of health sector decision-making, including the relative
importance each should have in such decisions. This, in turn, would minimise the “squeaky
wheel” problem – the ability of particular interest groups to illegitimately influence
prioritisation decisions – which the technical perspective sees as a particular area of concern.
Successful technical approaches depend on three main requirements:12



Clarity about objectives. Technical approaches are fundamentally “problemsolving” approaches. As a result, they require precise identification of what is to be
achieved through the process, and relevant parameters and context. So a prioritisation
system should, for example, be as specific as possible about the purpose(s) of the
health system.
Information about costs and outcomes. For technical approaches to work they
require information on how effective interventions are, and the costs of providing
these interventions. This is required so that the relative value of interventions can be
determined.
Performance measurement. Finally, it is vital for there to exist an effective measure
of determining how well the prioritisation process is achieving its goals. This
involves determining both how the objectives should be measured, and the specific
processes for actually measuring them.
The defining feature of technical approaches is the central role they give to the second of the
above requirements: information, and the development of appropriate tools to obtain it. The
clearest examples of such tools are those drawing on techniques used in health economics,
with other main tools being based on needs assessment.13 For example, Cost-Utility Analysis
(CUA), probably the most well-developed technical prioritisation tool, is an economic
methodology in which the value of a given health intervention is quantified in terms of the
number of Quality-Adjusted Life Years (QALYs)vi gained as a result of this intervention, and
vi
QALYs (and other comparable measurements) attempt to measure the benefits of health interventions by
determining an individual’s estimated life expectancy and adjusting it based on the negative impacts of a
condition they suffer. So, for example, a person who would normally be expected to live for 50 more years
11
this number compared to the expense of delivering the intervention. In a CUA-based
approach the greater the ratio of QALYs to the cost of delivery, the higher the priority for
providing access to an intervention.
Essentially, technical approaches are primarily concerned with the inputs to decision-making
processes – identifying the information that should be used in decision-making, developing a
tool for accurately capturing this information, and then ensuring that this tool is used
appropriately. In practice, of course, tools will operate within a political environment that
makes a fully technical approach at least very difficult to implement.14 However, advocates
of technical approaches argue that the key driver of decision-making should be the results of
this technical analysis, and a “good” set of prioritisation decisions is one that matches up as
closely as possible with that argued for by this measurement.
2.2 Critiques of technical approaches
Although technical approaches are attractive to prioritisation decision-makers, they have been
the subject of many critiques grounded in both theoretical and more practical methodological
issues. While many of these critiques relate to particular aspects of specific technical
approaches, a recurrent theme is a questioning of the underlying assumption of technical
approaches: that it is possible to develop a tool that can accurately capture and quantify the
factors involved in making prioritisation decisions.
The first of these critiques centres on the position of values and principles in setting priorities.
As noted earlier, all prioritisation decisions, whether explicit or implicit, will be based on
certain core beliefs as to the relative value of particular clinical outcomes. For example,
prioritising intensive care for those with life-threatening conditions over palliative care for
the terminally ill involves an assumption that increasing the length of life is more important
than increasing the quality of life.10 Beyond this, prioritisation processes must also include
consideration of wider ethical and moral considerations – for example, what role notions of
social equity and human rights should play in determining health funding. This is one of the
reasons why explicitly identifying the values and principles underlying prioritisation should
be the first step in developing an explicit method of priority-setting.
For many, however, technical analytical tools – particularly those based on QALYs or its
cousins the Disability Adjusted Life-Year (DALY) and Healthy Year Equivalent (HYE) – are
ill-suited for capturing these values. Questions of whether age should play a role in
determining access to healthcare, whether lives lived with an impairment are truly of less
“value”, or if more priority should be given to those less able to afford healthcare, represent
fundamental ethical and moral issues that are very hard to analyse within any technical
model. In Klein’s words, “the debate about priorities will never be finally resolved. Nor
should we expect any final resolution. As medical technology, the economic and
from the point of measurement would have a QALY-based life expectancy of only 25 years if they experienced
a condition deemed to reduce their quality of life by one half (0.5 x 50 years = 25 QALYs). Measuring the
benefit of an intervention in terms of QALYs involves determining how many additional QALYs a person can
expect to receive from that intervention. In the previous example, an intervention that raised this person’s
quality of life value from 0.5 to 0.75 would have a QALY value of 12.5 (0.75 x 50 years = 37.5 QALYs, – 25
QALYs = 12.5 QALYs). Conversely, one that raised the quality of life value to only 0.6 but increased overall
life expectancy to 60 years would have a QALY value of 11 (0.6 x 60 years = 36 QALYs, – 25 QALYs = 11
QALYs). It should be noted that this example is a simplified abstraction and debate continues over precisely
how to determine QALYs.
12
demographic environment, and social attitudes change, so almost certainly will our
priorities.”1 It is difficult for technical approaches, which by their very nature require the
definition of relatively fixed understandings of values and principles, to reflect this fluidity.
Consequently, over-reliance on technical tools in making prioritisation decisions can lead to
results that are out of step with wider public opinion. Oregon’s first attempt at prioritisation,
for example, followed a strongly technocratic model and resulted in such anomalous results
as tooth-capping being ranked as of greater value, in terms of offering greater benefit relative
to cost, than appendectomies.4
Furthermore, there exists a significant current of opinion that the attempt to develop a
“rational”/technical approach to prioritisation is an inherently doomed project. There are two
forms of this particular critique. The first of these relates to deep and fundamental theoretical
debates about the nature of both knowledge and policy-making, and discussion of these issues
are beyond the scope of this paper. A more moderate form, however, argues that technical
approaches require information that in practice cannot be gathered, and in many cases is
inherently subjective and contestable.1,5 For example, Holm has identified an example of this
inherently uncertain and subjective nature of medical practice in the concept of severity – a
characteristic most would agree should be an element of any priority setting decision-making:
The severity of a disease is open to different interpretations. Whether a disease
is lethal or likely to lead to permanent handicap or disability is an aspect of its
severity, but severity also includes current state of health (for example, whether
there is severe pain or current disability), urgency of treatment, and also the
possibility of treating the disease. The severity of the disease thus turns out to be
a multifaceted concept…15
As this quote illustrates, what may initially seem to be straightforward qualities often, once
they are “unpacked”, turn out to be complex and not amenable to a single definition. While
one can attempt to develop general guidelines as to what constitutes concepts such as
“severity”, these multiple aspects make definitions and measurements of such variable from
case to case and sometimes practitioner to practitioner. From the perspective of this critique,
one of the fundamental requirements for a technical approach to work – that of relatively
standardised, objective information – often does not exist in the health sector.
This is particularly the case when one considers the distinction between “vertical” and
“horizontal” priority-setting. The first of these relates to setting priorities between
interventions for the same condition or similar methods of attaining one goal – different
treatments for chronic heart disease, for example, or two different anti-smoking programmes.
In these cases, the interventions being compared are similar enough in approach and desired
outcomes that measuring their comparative value may be relatively straightforward and
uncontroversial.
Horizontal prioritisation, on the other hand, refers to setting priorities for interventions
between conditions or with radically different aims – such as prioritising treatments for bowel
cancer against hip replacements, or increased expenditure on disability support services
against resourcing an anti-obesity campaign. The divergent outcomes here make it difficult
to compare the benefit of providing an intervention, as there is no pre-existing “common
currency” through which outcomes can be compared.6
13
This is, in fact, the goal driving attempts to construct QALY-style systems: the development
of a single metric for determining value between interventions. However, these systems
encounter the same stumbling blocks described earlier. Arnesen and Kapiriri, for example,
have demonstrated the sensitivity of DALY measurements to value choices that may not be
immediately obvious – and the consequent importance of this for health policy: “The creators
of DALYs may be well aware of how to disentangle DALYs and of the effect of the value
choices but the problem is that the users of the information are probably not.”16
Those who advocate technical approaches to prioritisation certainly acknowledge these
issues. However, they also believe that these are surmountable problems. For some,
resolving them is essentially a matter of refining the method of information collection and
analysis until it accounts for all these intricacies. With regard to the Oregon anomaly noted
above, for example, it can be argued that this was simply the result of an imbalance in the
quality of the data available for each intervention. Others claim that, while the above
critiques are partially justified, focussing on information will still improve decision-making;
other problems may remain, but the better information that is available the less of an issue
they become.17 For many, however, the issues raised above make concentrating primarily on
improving information a case of missing the point at best, and actually dangerous at worst.
2.3 Institutional approaches
Scepticism at the ability of technical approaches to “solve” the prioritisation issue does not,
however, necessarily entail advocating a retreat from explicit prioritisation as a whole.
Recent years have seen the emergence of the institutional or “pluralistic bargaining” approach
to priority setting; what Ham and Coulter refer to as the “new synthesis” between implicit
rationing and technical approaches.4
The central difference between institutionalism and the technical approach lies in their
conception of what the establishment of priority setting processes should be concerned with.
As noted earlier, technical approaches to priority setting are based on improving information
so that there appears a clear, single answer to the question of “how should we prioritise?”
The type of information required and method of obtaining it may vary depending on
associated issues (for example, how we define the purpose of the health system), but in
essence such approaches posit the existence of a problem – “we are not prioritising
effectively” – and advocate a solution – “use tool X to measure value.” In this context, the
value of a given intervention is seen as relatively fixed, and something that can be determined
through the use of a sophisticated enough technical tool: “the use of QALYs, and other forms
of utility assessment, is dependent on … reflecting “reality”, or at least modelling “reality” in
an acceptable fashion.”18
For advocates of an institutional approach to prioritisation, however, priority setting is not a
puzzle requiring a solution, but rather an ongoing process without a single correct answer.19
From this point of view, rationing access to health interventions is fundamentally a political
and social exercise that involves bargaining between those with different interests.
This leads to a fundamentally different locus for prioritisation debates. Technical approaches
concentrate on identifying appropriate types of information and methods for measuring it.
For institutionalists, however, focusing primarily on information fails to account for the
context in which prioritisation decisions are made. The clinical setting is too uncertain, and
constructions of value are too divergent, for a single method to accurately capture all relevant
14
aspects of health sector decision-making and satisfy all parties. All such methods will be
open to challenge and critique, and attempting to impose a single, definitive prioritisation
formula will simply lead to anger and frustration amongst all parties.
Consequently, instead of positioning information as the centrepiece of priority-setting,
institutionalists focus mainly on what is done with information once it is collected. It is the
method whereby different values and types of information are mediated that is the prime
concern of institutional approaches – their defining feature is a concentration on the process
whereby priority-setting decisions are made, rather than the tools used to make them.
Of course, technical approaches do not neglect the question of process. However, in such
paradigms the process is essentially a means to an end – the aim is to produce a process that
supports using information to provide the “right” answer. Institutional approaches,
conversely, focus on the process as an end in itself, and accept that the “right” answer in a
given situation may not always be the same as that indicated by technical analysis. Correct
prioritisation decisions are not those that accord with maximising particular measurements,
but rather those that are reached through a process that the majority of stakeholders, even if
they disagree with the outcome of that process, can agree has been an acceptable one.
Whether the process meets particular ideas of rational decision-making, or the resulting
decisions line up with the results of technical analysis, is less important than the fact that all
those with an interest in the setting of priorities accept the process and feel that it provides for
adequate consideration of their views.
2.4 “Accountability for Reasonableness”
Moving away from purely technical approaches does, however, beg the question of how we
can determine that an institutional approach is “working”.12 Technical approaches provide a
clear basis for this, in terms of how closely decisions match up with the results of analysis.
Institutional approaches, however, do not have a similar comparator “built-in” to their design,
and instead require one to be developed. In this respect, the “Accountability for
Reasonableness” approach advocated by Daniels and Sabin has been influential in theorising
how explicit prioritisation processes should operate. Although initially developed to apply to
managed care plans in the United States, the general concepts of this approach are applicable
to decision-making in all health systems – and arguably to policy-making decisions in
general.
The notion of “Accountability for Reasonableness” is:
the idea that the rationales for [health care] … decisions should not only be
publicly available, but should also be those that “fair-minded” people can agree
are relevant to pursuing appropriate patient care under necessary resource
constraints.20
“Fair-minded people” in this context are those who are committed to making a process work
– people who accept that there will be constraints on access to health interventions, and are
willing to participate in discussions that will require mediating and accounting for the
interests of multiple stakeholders. Daniels and Sabin argue that for this form of
accountability to be apparent, that is, for a given decision-making process to be regarded as
fair, four conditions should be met:20
15




Publicity Condition: the rationale for decisions (and, indeed, the decisions
themselves) must be made freely available to the public. This satisfies the basic
ethical principle that people are entitled to know why decisions that affect them have
been made.
Relevance Condition: the evidence, principles and ideas that underlie the rationale
for decisions must be acceptable to all “fair-minded” parties.
Appeals Condition: there should exist a system whereby decisions can be challenged
and/or revised in the light of further evidence.
Enforcement Condition: there exists some system of ensuring that the above three
conditions are met.
The approach of Daniels and Sabin represents a meta-approach to the question of how
prioritisation decisions should be made: a process for thinking about processes. The extent to
which these criteria are fulfilled in practice varies considerably between both individual
criteria and particular jurisdictions.21 However, this in itself demonstrates that the idea of
accountability for reasonableness provides a useful way of evaluating the operation of
institutional approaches to priority setting.
2.5 Shifting approaches: the Norwegian experience
Initially, technical approaches dominated attempts to develop prioritisation systems. The
best-known example of such a technically-dominated system is that developed, and still used,
in Oregon.vii Although initial reliance solely on theoretical models led to unworkable results,
such as the previously cited example of teeth-capping being ranked as more valuable than
appendectomies, refinements to the tool involving the incorporation of public input and
ethico-moral principles resulted in a more acceptable priority list – albeit one which has
consistently expanded to cover more and more interventions.
In more recent years, however, the balance has shifted and internationally institutional
approaches now dominate prioritisation systems. Holm, for, example, has identified two
phases of priority setting in Scandinavia: an initial period dominated by technical approaches,
followed by the identification of major problems with resulting processes and a consequent
shift towards institutional perspectives.15
The Norwegian experience provides a good example of Holm’s shift between phases.
Norway was the first country to attempt to implement an explicit priority setting system in
1987, with the report of the Lønning Commission. The system implemented as a result of the
Commission’s report, unlike Oregon’s, did not create a prioritised list of individual
conditions and treatments, but rather created a series of five hierarchical groups based on
severity, with clinicians assigning their patients to these groups based on the consequences of
not undertaking treatment.22,viii In practice, however, this system proved less than
satisfactory, with its vulnerability to pressure from particular patient groups and the actions of
individual clinicians particularly important failings.15
As a result of these failings, a new Commission (referred to as “Lønning II”) was appointed
in 1996 to recommend changes to the prioritisation system. The report of the Commission
vii
The approach adopted by Oregon is discussed below in section three.
This represents an example of a technical approach based on needs assessment, as opposed to Oregon’s
emphasis of economic models.
viii
16
proposed a new three-step approach to prioritisation with stronger links between the political
and clinical levels of priority setting.22 The Lønning II process begins with specialty-specific
working groups, who define the concepts of severity, efficiency and benefit of intervention
within this clinical area and then use these to prioritise the conditions found within the
specialty. This advice is then passed up to political and administrative decision-makers to
use in funding decisions, and also informs the development of clinical guidelines for
individual practitioners.
The focus of the Lønning II model is not on “correctly” prioritising treatments, but rather on
producing prioritisation decisions that enjoy legitimacy and support from the public, patients
and health professionals.22 The requirement that the working groups define severity,
efficiency and benefit is intended to make transparent the underlying bases on which
prioritisation decisions are made, while the involvement of practitioners as an integral
element of the process enhances the likelihood that health professionals will not attempt to
subvert prioritisation decisions.
However, although Norway’s shift in approach is a good example of how attitudes to
prioritisation have changed, from the accountability for reasonableness perspective there still
exist important flaws in the process. In particular both the publicity and relevance conditions
referenced above are met only occasionally,22 and while a well-developed process has been
established to appeal prioritisation decisions, Norway follows most other jurisdictions in
having no form of enforcement of the type envisaged by Daniels and Sabin.21
3. Defining core services and the exclusion of health services
As noted in this paper’s introduction, a central driver of recent increased interest in
prioritisation has been a dramatic increase in the number and availability of new health
interventions. As a result of this, and consequent pressures on health budgets, one of the key
issues facing decision-makers has been the definition of core services. This issue has two
linked elements: firstly, the question of “core services” proper – identifying interventions (or
groups of interventions) that macro-layer decision-makers should explicitly commit to
ensuring will always be available to the public through the publicly-supported health
system.ix Secondly, there exists the question of exclusions – should there be interventions,
and if so which ones, that macro-layer decision-makers deem should not be supported by
public resources or receive such support only in limited circumstances?
At heart, however, the core services and exclusion debates are not simply about excluding or
including interventions – rather they concern issues of power and authority: where exactly the
cut-off point should exist between macro- and meso-layer decision-makers in prioritising the
allocation of funding, or even whether all interventions should theoretically be available and
micro-layer decisions be the only determinant of whether or not a given person receives an
intervention. At one extreme the macro-layer simply allocates an overall quantum of funding
to meso-layer decision-makers, who then have complete freedom to spend this in whatever
manner they wish. At the other, the macro-layer tightly defines exactly how its funding
should be allocated, and the role of the meso-layer becomes essentially one purely of
implementation rather than decision-making. Within these two extremes, a variety of
ix
Whether through a directly publicly-operated health sector, or through providing support for accessing
interventions through the private health sector.
17
possible arrangements exist – longer lists of core or excluded services provide greater
constraints on meso-layer decision-makers, while shorter lists diminish the power of macrolayer decision-makers.
3.1 Rationing by exclusion: the Oregon experience
Of the two “ends” of the core services debate, attention has largely focussed on the issue of
excluding treatments. Consequently, one of the explicit prioritisation processes to attract the
greatest international attention has been that of Oregon in the United States of America
(USA). Although Norway was the first jurisdiction to attempt to explicitly set priorities to
guide healthcare funding,23 Oregon attracted international attention not only for its attempt to
develop priorities for the allocation of funding but also because the process was developed
with the explicit intention of excluding some interventions from public support.
The development of explicit rationing processes in Oregon began at the end of the 1980s.
Although individual States in the USA had previously established some general health
service priorities to cover possible reductions in state budgets, Oregon was the first to attempt
to formulate priorities for specific conditions and treatments.24 Oregon’s decision to do so
was the result of widespread public discontent at the State’s decision to withdraw Medicaid
coverage for certain organ transplants in favour of extended prenatal care services – a policy
which led to the death of a child with leukaemia.x,25 Consequently, in 1989 the State
legislature established a Health Services Commission that proposed Medicaid coverage be
extended to cover all people with incomes falling under the Federal Poverty Line. In order to
contain the costs of this expansion, however, it was proposed that access to primary and acute
health care services – in other words, the specific conditions for which Medicaid would
subsidise appropriate interventions – be restricted.xi
For all Medicaid residents subject to the program, the benefit package would
be determined by a prioritized list of health services in which health conditions
and their treatments are listed by importance from highest to lowest. The State
legislature would then determine its budget for the program, and a line would
be drawn where projected program costs equal the budgeted amount. All
conditions and treatments at and above the line would then be covered;
conditions and treatments below the line would not be covered.24
The cut-off point for funding of a given treatment-condition pair in this system could rise or
descend biennially with the overall level of Medicaid funding in the State budget, while the
rankings on the prioritised list itself would be reviewed every three years.
The process of establishing the prioritised list itself was controversial and problematic – as
noted earlier, the initial list of services resulted in some anomalous rankings. In general,
however, the Oregon list has been accepted as a qualified success. While important flaws
x
Medicaid is a national insurance program that provides funds intended to ensure that specific groups of lowincome individuals and families are able to access necessary medical care within the USA’s private healthcare
system. Although established by federal statute and part-funded by the federal government, individual states are
responsible for the actual administration and implementation of Medicaid. This includes: establishing specific
eligibility criteria for Medicaid support; determining the type, amount, duration and scope of health services
Medicaid will fund; and the level of funding provided by the program.
xi
Long-term healthcare services were to be excluded from this restriction.
18
remain, the Oregon plan has been responsible for significant increases in the number of
people with access to Medicaid services.25
3.2 The absence of exclusion
Although the Oregon experience has attracted significant attention and is generally
considered a success, the actual influence of this approach to prioritisation has been relatively
minor. In the wake of Oregon’s moves, several other jurisdictions attempted to develop a
core/non-core distinction. However, such proposals have generally either failed to be
implemented or been introduced at only a minor level. The Netherlands, for example, has
implemented a very limited form of exclusion-based prioritisation in which a few specific
treatments (such as in vitro fertilisation) are not totally excluded from receiving public
funding, but have limits placed on the circumstances in which they are so funded.26
This general dearth of exclusion-based approaches to prioritisation is based on a variety of
factors. Firstly, excluding services from coverage can face significant resistance from both
health professionals and the wider public. One of the advantages enjoyed by decision-makers
in Oregon was that the prioritisation process was framed within the context of increasing
access to the State’s Medicaid program. Consequently, reductions in medical coverage were
balanced by correlating increases in population coverage. This situation is significantly
different, however, in jurisdictions with an extensive public healthcare system.
Making tradeoffs between the comprehensiveness of service provision and the
extent of population coverage is more difficult in [systems other than
Oregon’s] … because in these systems there is already a commitment to
universal coverage. Setting priorities by excluding services therefore poses
political problems because no compensating benefits are on offer.6
Thus, while there may be strong arguments in favour of decisions to withdraw funding for
particular health interventions, the loss of previous benefits without any corresponding gain
may be unpopular amongst the public. This is less of an issue with regard to the introduction
of new interventions. However, such interventions are often both available overseas and in
other jurisdictions, and this can lead to significant public discontent regarding decisions not
to fund particular interventions.
The undoubted position of political pressure (or, to be charitable, the responsiveness of
administrations to the wishes of the public) as one factor in the reluctance of governments to
exclude specific treatments from public funding has led to criticisms that this is a case of
central government avoiding responsibility for making difficult decisions. From this
perspective, focusing on processes that should guide prioritisation decisions made at the
meso- and micro-levels is seen as an easy out whereby governments can avoid making
politically unpopular decisions themselves, and instead require bodies such as local health
authorities or health practitioners to bear the brunt of discontent with prioritisation decisions.
The renewed … focus on the micro level of rationing can be seen as an
example of blame avoidance as decision makers respond to the political costs
of being explicit about priorities… One of the effects of such an approach is
to direct attention away from relatively visible and accountable decisionmakers to a much more diffuse group.27
19
To characterise lack of political will as the sole motivation for the unwillingness of
jurisdictions to take an exclusion-based approach to prioritisation is, however, both unfair and
inaccurate. Whether or not political palatability has played a role, there exist other important
reasons why governments may be reluctant to exclude treatments from public funding –
primarily the restrictive nature of prioritised lists of interventions.
By their very nature, such lists are based on a constant measurement of value – they assume
that a given condition will always have a given equal “negative” value and, correspondingly,
that treatment of this condition will therefore have a consistent level of health benefit.
However this value is determined, prioritised lists are based on the assumption that it is both
possible and desirable to denote service B as always delivering more benefits than service C,
and less value than service A. Even more sophisticated versions of this approach, which
attempt to allow for the characteristics of specific cases, still rely on an assumption that it is
possible to define the value of an intervention to members of a particular group.
In practice, however, this assumption is difficult to support. People experience need for
health interventions within an almost endless diversity of contexts and characteristics that can
all affect each other, and the benefit to an individual (and others, such as family members)
from a particular intervention can therefore vary immensely. As the UK Department of
Health argued in 1995:
To attempt to draw up national lists of treatments which will and will not be
provided would be an exercise fraught with danger. No one list could ever
hope to accommodate the range and complexity of the different cases which
individual clinicians face all the time.28
In essence, defining core services rests on the construction of a typical context in which
decisions regarding health interventions can be made. This ignores the fact, however, that
specific contexts – and therefore specific benefits – can vary greatly from this norm. While
there exist interventions that may commonly provide only low benefits, there is always the
possibility of a case where undertaking the intervention will result in significant gains.
Preventing an intervention from being accessed through the public health system removes the
system’s ability to account for such situations.
4. Evidence based medicine
Exclusion approaches are an example of decision-making processes at the macro-layer. With
their general failure, attention has increasingly moved to prioritisation at the meso- and
micro-layers. Central to this has been the recent growth of evidence based medicine (EBM).
The founding principle of the evidence based medicine movement is the claim that much of,
or even most, existing clinical practice is not supported by sound scientific evidence and
hence does not constitute the most effective use of limited healthcare resources.6 As a result,
advocates of EBM argue for increased research into the efficacy of both new and existing
treatments, improved information flows between researchers, clinicians and policy-makers,
and a willingness to discard established practices when evidence does not support their use.
Although EBM may have begun purely as an attempt to improve clinical practice, its value in
terms of prioritisation is obvious. If the movement’s position is accurate, then pursuing
20
evidence-based medicine not only has the potential to improve the clinical care of patients,
but may also ensure that resources are not used when their value is questionable.
Importantly, however, an increase in evidence based approaches does not inevitably lead to
reductions in costs. A corollary of willingness to discard established practices is the
willingness to maintain existing expenditure and provide new interventions when evidence
supports this.
Several important critiques have been made of the evidence based movement. For example,
the particular form of “evidence” advocated as the gold standard by the evidence-based
movement – usually double-blind randomised clinical trials – is more suitable for assessing
some interventions than others.13 This has particularly important implications for horizontal
priority setting. The most influential opposition has come from clinicians who argue that the
health environment is an inherently uncertain one that bears little resemblance to that of a
clinical trial, and for which the standardised practices that are the goal of EBM are unsuitable
and no replacement for individual clinical judgement – a viewpoint that has resulted in health
practitioners continuing to rely on experience and precedent even when it conflicts with
dominant scientific opinion.6,29
Despite these critiques, however, the evidence-based approach has become highly influential
in thinking about health practice and policy. In terms of prioritisation, EBM has progressed in
two linked streams: the development of clinical guidelines, and promotion of technology
assessment.
4.1 Clinical Guidelines
If excluding interventions is a “top-down” approach to prioritisation in which the potential to
offer an intervention is eliminated at the macro-layer, clinical guidelines constitute the polar
opposite. The guidelines approach instead focuses on the opposite end of the health system
and the micro-layer of priority setting in which the decision is made to offer an intervention.
Rather than determining the parameters within which practitioners make prioritisation
decisions (ie; the availability or otherwise of specific health interventions), clinical guidelines
attempt to influence the actual making of those decisions. They do this by establishing “best
practice” advice on when, how long, and in conjunction with what other interventions a given
health intervention should be prescribed by a health professional. This is seen to both
maximise the potential efficacy of an intervention, and ensure that interventions are not
offered when they will be ineffective or unnecessary.
One of the key advantages in the development of clinical guidelines is their flexibility. As
examples of best practice, their role is to provide general advice on the use of health
interventions and promote a coherent approach to treatment between health professionals. At
the same time, however, their status as guidelines rather than rigid protocols preserves the
autonomy necessary for health practitioners to exercise their own clinical experience and
judgement in addressing the specific needs of individual patients.
While clinical guidelines are generally seen in a positive light, however, their actual impact
remains unclear. On an implementation level, many health professionals are cautious of
using guidelines – mainly due to the general objections raised against EBM noted earlier –
and internationally their use by practitioners remains low.30 Furthermore, and somewhat
ironically, evidence as to the actual impact of guidelines on health outcomes is unclear.
21
While there is no evidence that clinical guidelines worsen health outcomes, the benefits, if
any, stemming from their use appear to be relatively small and highly variable between
cases.30
4.2 Technology Assessment
In many ways, technology assessment (TA)xii forms the core of the evidence-based medicine
movement. The purpose of technology assessment is to develop a measure of the
effectiveness of a given medical procedure, appliance, pharmaceutical, and, in at least some
formulations, new systems and structures as well – including evaluation of the technology’s
medical efficacy, questions of safety, and possibly the ethical, social and financial
implications of introducing it.31
Technology assessment is of significant value in prioritisation. Firstly, for those who
advocate technical approaches to priority setting the information provided by health
intervention assessment is vital in ensuring that such approaches are workable. Technical
approaches require detailed and specific information, and health intervention assessment is a
key vehicle for obtaining this information.
Furthermore, unlike clinical guidelines, which are focussed on the micro-level of
prioritisation, TA is usable at all three prioritisation layers. At the macro and meso layers,
TA provides information to guide overall resource allocation.xiii At the micro-level,
technology assessment both provides advice to individual practitioners and supports the
development of clinical guidelines.
4.3 EBM in practice: the UK experience
Internationally, one of the most well-developed examples of EBM-based priority setting is
that of the National Institute for Clinical Excellence (NICE) in the United Kingdom. The
Institute undertakes both technology assessment (technology appraisals) and the formulation
of guidance for the management of specific health conditions (clinical guidelines) for the
National Health Service (NHS) in England and Wales.xiv
Organised technology assessment in the UK began in the early 1990s, with the development
of a national health technology assessment program in 1993 and the creation of the NHS
Centre for Reviews and Dissemination (CRD) in 1994, both of which were intended to
improve the availability of information about the effectiveness of health technologies for
clinicians and other decision-makers. However, the effectiveness of these two institutions is
Although “technology assessment” constitutes standard terminology, the term “health intervention
assessment” is also used to refer to the same phenomenon. Using this second term has the advantage of
avoiding the connotations of physical devices possessed by the word “technology” and thus arguably more
accurately reflects the range of procedures, devices and pharmaceuticals that can be assessed under this overall
rubric. This paper uses the terms interchangeably (though only the abbreviation TA).
xiii
The introduction of some new technologies, such as pharmaceuticals, is one of the few areas in which
exclusion-based approaches to prioritisation have been relatively effective. Technology assessment can also be
used in financial planning, by predicting how often situations where a given intervention is useful are likely to
arise and thus likely demand for the technology.
xiv
For the NHS in Scotland two separate bodies, the Health Technology Board and the Scottish Intercollegiate
Guidelines Network, undertake technology assessment and the development of clinical guidelines respectively.
Both do, however, work closely with NICE in developing their advice. The Institute also now provides advice
on the safety of interventional procedures, and this advice covers the NHS in England, Wales and Scotland.
xii
22
questionable, and the assessment of health technologies was still largely undertaken in an ad
hoc and disorganised manner well into the late 1990s.32
As a result of dissatisfaction with these existing arrangements for health technology
assessment and several high-profile public debates over the use of particular
pharmaceuticals,33 1999 saw the establishment of NICE to promote a coherent approach to
promoting the effective use of health interventions. The Institute also acts as a vehicle for
involving the public and stakeholders in the formulation of guidelines and technology
assessment, so that the advice it provides includes an appreciation of factors beyond pure
clinical effectiveness.
NICE does not itself develop guidelines or undertake assessments – instead, it operates as a
co-ordinating and facilitating body for evidence based medicine. Once it has been
determined that a particular intervention should be examined or guideline formulated, it
brings together groups of practitioners and researchers to develop both the scope of the
activity and produce the guidelines or assessment. At the same time, NICE acts as a
guarantor for the process by setting out a specific oversight arrangement involving both the
Institute itself and groups of stakeholders. More detailed discussion of the Institute’s
processes for guideline development and technology assessment can be found in the attached
appendix.
However, while NICE’s processes may be well-developed, the exact impact of its guidelines
and assessments remains unclear. There exists some evidence that specific recommendations
are being routinely ignored, while conversely it has been claimed that the money saved by
recommendations for decreased use of some interventions has been overcompensated for by
other recommendations for increased use of other treatments by approximately 200 million
pounds.33 It has been argued that one reason for this is the Institute’s focus on the
examination of new treatments and relative neglect of older, existing technologies.
The NHS cannot afford NICE generosity, even with increased funding,
because of the resource demands of other access and national service
framework targets, many of which have yet to evaluated by NICE.34
4.4 EBM in practice: the Dutch experience
The difficulty NICE has experienced in having its advice adopted by practitioners and
decision-makers mirrors overall international experiences. The Netherlands, another
jurisdiction where extensive use of EBM has been promoted as a means of addressing priority
setting issues, has also experienced significant problems in translating this into practice.
As noted in section one of this paper, discussions over priority setting in the Netherlands
began in the 1980s with the Zeikenfondsraad’s recommendations that all new medical
technologies be analysed to determine their cost-effectiveness. The Dunning Committee’s
1991 report re-emphasised the importance of TA, and such assessment continued to be
enthusiastically promoted as the rest of the committee’s recommendations fell by the
wayside.9 At the same time, the Netherlands has followed other countries in promoting the
use of clinical guidelines. In contrast to the rhetoric, however, the practical impact of
technology assessment on the Dutch health system has been patchy.
23
At a structural level, both health intervention assessment and the development of clinical
guidelines occur haphazardly, with a large range of central and local bodies undertaking
technology assessment and guideline development in a haphazard and uncoordinated manner.
For example, both the Dutch Institute for Healthcare Improvement (CBO) and the Dutch
College of General Practitioners (NHG) have produced guidelines covering treatment of the
same conditions, and there is little linkage between the two branches of EBM.9
This situation is replicated in terms of translating these EBM measures into practice.
Research has also found that Dutch health professionals pay little attention to guidelines and
that many practitioners are unaware of their content, and that there is little evidence of
technology assessment having significant influence on policy-making.9
5. Incorporating clinicians, patients and the public
The final key theme in international experiences of prioritisation is the need to involve
stakeholders in the process of setting priorities. Indeed, one of the key reasons that
jurisdictions have shifted away from technical approaches is a perception that technical
approaches fail to engage with stakeholders and privilege the perspectives of a small group of
decision-makers. Before discussing this, it should be noted that health service administrators
and technical analysts constitute a group of stakeholders in their own right – administrators
and analysts have their own particular interests and positions regarding prioritisation, 35 and it
is important to recognise this fact. However, this group is, by their very nature, involved in
decision-making processes, and therefore “stakeholders” in the context of this paper will be
used to refer to decision-makers other than administrators.
5.1 Why involve stakeholders?
In the context of prioritisation, stakeholders can be divided into three core groups:
practitioners, patients and the general public. There are three major arguments for ensuring
that stakeholders play an important part in prioritisation processes. The first of these is an
ethical one: in situations where the public funds a health care system, the public has a right to
some input into how those resources are allocated.19 In the context of prioritisation, this is
particularly important given the previously noted importance of values and principles in the
setting of priorities, and the consequent need to identify these. These cannot be simply
assumed, as the actual preferences of individuals (in terms of the value they ascribe to
particular health states) can differ markedly from those predicted by theoretical models and,
critically, from those values held by policymakers and technical experts.19,35 Furthermore, it
has been argued that increasing the involvement of the public generally enhances
accountability by requiring bodies responsible for priority setting to be more explicit about
the reasons for the decisions they make.36
A second rationale for increasing stakeholder involvement in decision-making processes
stems from an appreciation for the varying perspectives, understandings, and forms of
knowledge that different stakeholders bring to the decision-making process. Health
practitioners, for example, have experience of the actual context in which health interventions
are provided, and the issues involved in micro-level priority setting. Patient groups, on the
other hand, understand what it is like to actually live with conditions on a personal level – a
perspective that may be overlooked when the prioritisation of conditions and treatments is
discussed in the abstract. Other groups have knowledge of other factors that should be
24
accounted for in decision-making, such as different cultural perspectives or a thorough
understanding of specific local issues.36
A final core rationale for increasing the involvement of stakeholders is based on legitimacy
and the implementation of prioritisation decisions. The controversy that greeted the
principles articulated by the Dutch Dunning Commission demonstrates the difficulty of
implementing measures that do not enjoy public legitimacy. In contrast, the involvement of a
wide cross-section of interested parties increases the likelihood that the decisions made by
priority setting bodies will be accepted as reasonable. While this will partly be due to the
ability of stakeholders to affect the decision-making process, involvement in decision-making
can also lead to a greater appreciation of the issues involved in priority setting and a
recognition of the need for compromises and making of difficult decisions.36
This legitimacy factor is particularly important in considering the involvement of health
practitioners in priority setting. This is due to the fact that, as noted in the introduction,
practitioners are themselves priority setting figures. Although their prioritisation capacity is
partially limited by decisions at higher levels – such as the decision to exclude a treatment
from funding – the role of health professionals in assessing conditions and prescribing
interventions is a final “gate-keeping” role whereby access to health interventions is actually
determined.
This characteristic makes the assent of health practitioners vital in the establishment of
effective prioritisation processes. Critical to this is the capacity of practitioners to subvert
processes if they do not perceive them as legitimate. There is strong evidence, for example,
that clinicians are willing to game waiting list systems they perceive as unfair, and assign
patients a higher need for intervention than would generally be accepted in order to ensure
earlier treatment.37 Similarly, the use of evidence-based medicine as an aid for prioritisation
relies on health practitioners accepting the findings of relevant research – and there exists
evidence that many health professionals place more trust in their own clinical experience and
established tradition than scientific evidence.29
The clinical legitimacy of prioritisation systems and processes is thus of critical concern.
Involving health practitioners in the development and operation of priority setting systems
will not necessarily eliminate subversion of prioritisation processes. However, increasing
their involvement does make it at least theoretically more likely that practitioners will see the
resultant decisions and mechanisms as acceptable – both through a sense that the clinical
viewpoint has been considered in their development, and via practitioners themselves
becoming more aware of the pressures and issues involved in making prioritisation decisions.
It is important to note, however, that while the involvement of stakeholders in priority setting
is generally seen as positive, there remains debate over the issue. This is particularly the case
with regard to the involvement of the public, with most objections to increasing involvement
centring on the representativeness (or rather, the lack thereof) of those consulted, lack of
specialised professional knowledge, and a potential descent into populist priority setting.38
Some theorists, particularly those who advocate a strongly technical and rationalist approach
to prioritisation, also decry what they see as the essentially illegitimate involvement of
sectional interest groups in decision-making processes.5 Perhaps the most interesting
opposition to increased public involvement has come from the public themselves, with
several studies of public preference returning findings that suggested public involvement in
priority setting should be limited in comparison to those of clinical and managerial health
25
professionals (although results have varied significantly depending on how questions were
phrased).36 In practice, however, these issues have been expressed in terms of the extent to
which stakeholders should be involved, rather than attempts to eliminate their input
completely.
5.2 How to involve stakeholders
In terms of actually involving stakeholders in prioritisation, there exist two main approaches.
The first of these is to use stakeholders to inform prioritisation decision-making. The
opportunity to make comment on policy formulation is a fundamental principle of modern
western democracy, and is commonly used to determine the values and principles that should
underlie priority setting and to provide feedback on proposed processes. This can occur not
only during the initial development of prioritisation processes, but also afterward in order to
monitor changes in community values and preferences and obtain feedback on the operation
of decision-making systems. Oregon provides an excellent example of this, with the Stateoperated Oregon Health Decisions undertaking biannual research to track the opinions of
Oregon citizens.
A wide variety of tools have been used for this form of consultation.38 Quantitative
approaches such as telephone-based and questionnaire surveys have been a popular form of
public consultation. Extensive use has also been made of more qualitative consultation
methods. Such approaches allow a comprehensive examination of responses, and often
provide a forum for two-way communication between decision-makers and stakeholders
rather than the pure information collection of survey methods. The series of community
meetings and hearings held by Oregon Health Decisions are a good example of this, as is the
Dutch government’s publicity campaign to promote feedback on the report of the Dunning
Committee. Focus groups have been used increasingly in this manner, as they avoid the selfselection biases of public meetings – although the limited number of people involved
hampers their effectiveness at transmitting information from decision-makers to the public.6
One interesting example of this focus-group style of community consultation is that of
Citizen Juries. Originating in the United States,xv and common both there and in Germany,
recently this model has been exported to both the United Kingdom and Australia.39,40,41 The
name of this approach stems from its similarity to that used in jury trials: a panel of usually
between 12 to 16 members is chosen at randomxvi – usually through the local electoral roll,
though other methods are sometimes used.41 This panel then sits for up to a week
considering a single question under conditions modelled on those of a court case; for
example, “witnesses” are called to give evidence and be cross-examined, and the jurors are
expected to come to a consensus regarding their answer to the question, which is then
presented to the body that has commissioned the jury.
Whether qualitative or quantitative approaches are used, each of these forms of consultation
provides important information that can be fed back to decision-makers and used in the
development and operation of prioritisation systems. Importantly, however, this approach
continues to position the public outside the actual process of setting priorities. Information is
The term “Citizens Jury” has been trademarked by the Jefferson Center in the United States.
Methodologically, Citizen Juries are not required to be statistically representative samples of a particular
population. However, attempts are usually made to ensure that their makeup roughly reflects that of the local
community.
xv
xvi
26
obtained from the public, patients, practitioners etc., but the responsibility for translating this
information into practice still rests with a comparatively select group.
The second form of stakeholder involvement differs from this in that it gives stakeholders an
active role in the making of priority setting decisions. This form of involvement is far more
controversial than the consultative role, as it involves stakeholders actively participating in
the allocation of resources. Those theorists noted earlier who see public involvement as
problematic, for example, may be willing to accept consultative involvement on the grounds
that it constitutes a form of basic information-gathering. However, allowing those with an
interest in the outcome of decisions a role in making those decisions is seen by such theorists
as an example of defective policy processes.5 It has also been noted that involving
stakeholders directly requires at least some transfer of authority and power to these groups,
and this can lead to significant opposition from some traditional authority figures such as
health professionals and administrators.42
Another point of view supports the active involvement of particular groups in priority setting,
but argues that the types of groups involved should be limited. It has been argued, for
example, that making effective prioritisation decisions requires significant clinical
knowledge, and that therefore while health professionals should be involved in such
processes other groups may legitimately be excluded on the grounds that they do not possess
this knowledge.43 Although little research has been conducted on the extent to which this
lack of knowledge is an issue in practice, at least one study has found that it does seem to
present a significant problem – though one that can be overcome.44 As noted earlier, some
research has indicated that this view may be shared by many members of the public itself,
who feel that while it is important to gauge public opinion, the public in general do not need
to be completely involved in the actual prioritisation process.
Conversely, others have argued for the direct involvement of public and patient
representatives in priority setting processes. Active public involvement in these decisions
makes it more likely that the values and preferences of the public are actually incorporated
into decision-making, and therefore enhances the legitimacy of the resulting priorities.42
This can include public representatives acting in a “watchdog” role, and ensuring that
appropriate processes are followed and not undermined by the interests of other stakeholders.
Similarly, involving patient groups directly in prioritisation decisions ensures that an
appreciation of the actual experiences of those requiring interventions are included in
decisions.44 Direct involvement is also the most effective way to promote understanding
amongst stakeholders of the pressures involved in making prioritisation decisions.
The implementation of this form of stakeholder involvement is significantly less common
than the first form. Clinical guidelines require the extensive involvement of relevant health
professionals if they are to possess any credibility, and therefore health professionals have
been critical components in their development. In some jurisdictions the public may elect
members of bodies responsible for meso-level decision-making (such as health boards), thus
ensuring a level of direct input into such processes. Directors of medicine and nursing may
play a similar role in representing the views of those health professionals in setting priorities
within particular institutions. Finally, initiatives such as the Expert Patients Programme in
27
the UK enhance the involvement of patients in micro-layer decision-making regarding their
own care.xvii
5.3 The NICE approach to stakeholder involvement
The processes of the National Institute for Clinical Excellence in the UK provide a welldeveloped example of this second form of stakeholder involvement. The procedure whereby
NICE formulates clinical guidelines and evaluates health interventions has been discussed
above. The groups it concentrates on involving are health professionals, patients (ie; those
whom the health intervention is intended to benefit) and their carers, and relevant commercial
interests – and, in the case of clinical guidelines, the NHS.45,46
In the development of clinical guidelines, representatives of these interests are invited to
register as formal stakeholders with NICE (in the case of health professionals, patients and
carers this representation is achieved through national organisations). These representatives
then provide comment on both the initial scope and two consultation drafts of the guideline.
The Guidelines Advisory Panel acts as a watchdog to ensure that the comments made by
stakeholders are given fair consideration by those developing the guideline.46 Furthermore,
the Collaborating Centres responsible for determining the scope and developing guidelines
consist of representatives of relevant health professions.xviii
In Technology Assessment, the involvement of stakeholders works slightly differently.
Initially, the procedure is the same as that for clinical guidelines, with representatives
registering with NICE and providing commentary on the draft scope for the assessment.
After this, however, the stakeholders, individuals from NICE co-ordinating the process, and
the group undertaking the assessment, meet with each other to discuss issues involved in the
assessment, and the stakeholders formally submit evidence to the Institute to support their
position. Furthermore, once the assessment group has passed their report to the Appraisal
Committee, not only is the report distributed for comment amongst stakeholders, but the
Appraisal Committee meets and is attended by experts nominated by professional
patient/carer organisations.
What is particularly noteworthy is the importance given to the perspectives of patients and
carers in both developing clinical guidelines and assessing technology – indeed, NICE has
explicitly stated the importance of such views.46 Furthermore the Institute has recently
appointed a Citizens’ Council (a form of permanent Citizens’ Jury meeting twice a year) in
order to obtain public feedback on its decisions and “provide a backdrop against which NICE
and the independent committees that advise it can develop their recommendations.”47
Although the Citizens’ Council is a purely consultative body, the bulk of NICE’s approach to
stakeholder involvement is an example of actively incorporating stakeholder views into
decision-making processes. With regard to clinical guidelines, as is usual practice these are
developed by clinicians. Furthermore, although representatives of patients, carers and health
professionals generally are technically only given a consultative role in both the assessment
and guideline development processes, the extensive involvement of these groups – including
xvii
The Expert Patients Programme is an initiative implemented from 2002 by the National Health Service to
promote people developing the skills to effectively self-manage their own chronic conditions.
xviii
In addition, the NCC for Mental Health also includes patient/carer representatives in the form MIND (the
largest mental health advocacy organisation in England in Wales), Rethink (the former National Schizophrenia
fellowship), and the Manic Depression Fellowship.
28
the aforementioned role of the Guidelines Advisory Panel in ensuring their comments are
included – effectively give these groups a significant role in the actual development of the
guidelines. Although it would be wrong to characterise this attempt to ensure patient
involvement as wholly successful, the Institute has demonstrated a clear commitment to
improving and enhancing the role of patients and carers.
SUMMARY
As the previous discussions indicate, there is perhaps one more dominant theme in
international experiences and discussion of prioritisation: the on-going difficulty of
implementing prioritisation systems in the health sector. Although there are certain dominant
features of modern prioritisation systems – such as a concern with institutional rather than
technical approaches in developing prioritisation processes, and an emphasis on evidencebased medicine and micro-level priority setting, no jurisdiction can claim to have
successfully resolved the prioritisation debate. Although many jurisdictions have identified
what values and principles should guide prioritisation, translating these into practice has
proven both controversial and difficult. Similarly, while clinical guidelines have been
promoted as an example of how clinical autonomy can be preserved within the development
of explicit prioritisation processes, there is evidence that these guidelines are ignored in
practice.
The establishment of explicit prioritisation systems is therefore something of a thankless task
for decision-makers. The National Institute for Clinical Excellence, for example, in many
ways represents the leading edge of approaches to prioritisation. As an institution devoted to
evidence based medicine, with extensive involvement of a range of stakeholders as an
integral element of the formulation of its advice, and willingness to reflect and reform its own
practices, NICE embodies the modern method of thinking about and approaching the
rationing of access to health interventions. And yet there remain important questions and
issues regarding its activities and decisions that make it impossible for the Institute to be
classified as anything more than a qualified success.33,34,48
In summary, there can be said to exist a common international approach to priority setting –
one emphasising the explicit identification of principles, the creation of robust processes
rather than technical solutions, the need for continued clinical flexibility, the pursuit of
evidence based medicine and increasing stakeholder involvement. The translation of this
approach into practice is, however, far from complete.
29
SECTION TWO: THE NEW ZEALAND EXPERIENCE
INTRODUCTION
This section of this paper traces the development of prioritisation systems in New Zealand.
It begins by discussing the pivotal role of the Core Services and National Health Committees
in setting the groundwork for prioritisation systems in New Zealand. Following this, the
different “layers” at which prioritisation decisions are made is used as a structure to explore
experiences of priority-setting in the New Zealand health sector.
It should be noted that although technology assessment is an important element of
prioritisation systems, this discussion only touches on such assessment as it relates to other
prioritisation processes. The National Health Committee is currently undertaking another
project specifically focusing on issues surrounding the assessment of new health
interventions in New Zealand, and substantive discussion of this area will be available in the
report of this project.
The purchaser-provider split and the origins of prioritisation debates
As with other jurisdictions, the establishment of priorities for access to health interventions in
New Zealand has historically been an implicit process. Although the fourth Labour
government pursued several reviews of the health sector during the 1980s, 49 none of these led
to significant alterations in how prioritisation decisions were made.
This changed in 1990 when the incoming National government appointed a taskforce to
undertake a major review of the sector, focussing on concrete proposals for restructuring the
provision of health and disability support services. The resultant Green and White papers put
forward six major recommendations,xix all but one of which were implemented to some
degree. Using what has been described as a “big bang” approach to health sector reform,50
the government instituted a comprehensive package of structural changes that fundamentally
altered the manner in which health services were offered in the New Zealand context.
One of the most significant elements underlying these reforms was the institution of the
“purchaser-provider split,” which involved the dramatic reconfiguration of meso-layer
decision-making about health and disability services. Prior to the National government
reforms, meso-layer decisions in New Zealand were made by fourteen Area Health Boards,
each of which was responsible for providing health and disability support services throughout
a particular geographic region.xx Area Health Boards received funding directly from the
government on a population basis, allocated this to particular interventions, and then provided
those interventions to people within their area.
xix
In addition to the establishment of Regional Health Authorities, Crown Health Enterprises and the Core
Services Committee discussed above, the taskforce recommended the establishment of a Public Health
Commission and accompanying Agency, transformation of the operationally-focussed Department of Health
into a Ministry with primarily strategic and monitoring functions , and the introduction of alternative Health
Care Plans to compete with RHAs for government funding. The last of these was the sole recommendation that
was not implemented in some form, although the Public Health Agency was never established and the Public
Health Commission was disbanded after less than two years of operation.
xx
These Boards were themselves the product of health sector restructuring by the fourth Labour government.
30
The reforms dramatically restructured this system. Firstly, administrative structures were
reorganised and the localised Boards were replaced by four Regional Health Authorities
(RHAs) responsible for far larger areas than the Health Boards.xxi The Authorities took over
responsibility for administering the funding allocated by the government to support health
and disability support services within their region.
More fundamentally, however, the reforms split the previously integrated funding and
provision role under which Area Health Boards had operated. Instead, the RHAs were
expected to identify health needs within their areas and contract other bodies to provide
interventions and services that would address those needs. Hospitals were commercialised
into “Crown Health Enterprises” (CHEs),xxii and expected to both return a profit to the
government and compete with private and not-for-profit providers of health services.51
OPENING THE DISCUSSION: THE CORE SERVICES COMMITTEE
It was in the context of this dramatic restructuring that the issue of prioritisation was first
publicly raised in New Zealand. One of the recommendations of the taskforce was the
establishment of the National Advisory Committee on Core Health and Disability Support
Services, also known as the Core Services Committee (CSC). The CSC was established in
1992 “to advise the Government on core health and disability support services to which the
public should have access on fair terms.”52,xxiii In other words, and in keeping with thendominant thinking, the committee was initially positioned to follow the lead of the State of
Oregon in the USA and determine what health services should be funded by the government.
One of the key reasons for establishing the Core Services Committee as an independent
committee, rather than giving this role to the Ministry of Health, was to fully engage the
public in the priority setting process.53 To this end, the CSC undertook extensive periods of
consultation using a wide variety of methods.54 Beyond this, however, the committee’s
position outside traditional health sector structures, the relatively wide membership of the
committee, and the approach taken to consulting with the public, represented an attempt not
only to ascertain what priorities stakeholders saw as important, but also to improve public
understanding of the pressures and issues that were facing decision-makers in the health
sector. For example, the committee’s Best of Health series of documents included several
example funding scenarios to illustrate the types of contexts in which prioritisation
documents are made.xxiv
The establishment of the committee in New Zealand was driven by many of the same
pressures driving the institution of explicit prioritisation processes elsewhere, with the key
xxi
The four RHAs were North Health (Northland and Auckland), Midland Health (the central North Island),
Central Health (the Lower North Island, the Chatham Islands, Nelson and Marlborough) and Southern Regional
Health (the South Island except Nelson and Marlborough, and Stewart Island).
xxii
CHEs were later renamed hospitals by the National-New Zealand First Coalition Government of the late
1990s.
xxiii
Importantly, the committee’s brief at this time covered only personal health and disability support. Public
health issues were the responsibility of the Public Health Commission.
xxiv
This series consists of The Best of Health: Deciding on the health services we value most (1992), The Best of
Health 2: How we decide on the health and disability support services we value most (1993), and, published by
the renamed National Health Committee, The Best of Health 3: Are we doing the right things and are we doing
those things right? (1997).
31
driver being a belief that without some process to limit the services that would be funded, an
inevitable expansion in needed and available services would lead to a major crisis in health
funding:
By defining core health services, we can get better value for scarce resources and seek to
limit the growth of medical expenditure. If we do not do this, new medical technology and
pressures arising from demographic change will overwhelm our health system.55
Initially, the committee considered three broad methods through which a “core services”
approach to prioritisation could be adopted, the first two of which were variants on the same
“general list” method and could theoretically have been combined for greater control over
meso-layer prioritisation:
1. Positive general listing: In this approach, the committee would define a core list of
specific groups of interventions that all meso-layer decision-makers (ie; the Regional
Health Authorities) would be required to fund.
2. Negative general listing: In this approach, the committee would define a list of
specific interventions that meso-layer decision-makers would be prevented from
funding through public resources.
3. Priority-listing: In this approach, the committee would adopt the same model as
Oregon and rank interventions on a priority basis. This list would be developed along
similar lines to those advocated by the Dunning Committee in the Netherlands, with
care being ranked according to its effectiveness, efficiency, necessity from a
community perspective, and ability to be left to individual responsibility. The level of
funding devoted to the health budget would then determine the particular
interventions that could receive public funding.
After fully considering these options and in light of consultation with health practitioners, the
public and other stakeholders, however, the CSC rejected all three of these methods –
primarily due to the inability of these approaches to take account of the specific clinical
contexts in which interventions may be required. Instead, the committee focussed its
attention on examining the principles that should guide prioritisation decisions made by
others in the sector. After further consultation, the CSC – by now renamed the National
Health Committee (NHC) – developed the following principles:56




Effectiveness – a funded intervention should show good evidence of benefit.
Equity – funding an intervention should constitute a fair use of public resources.
Acceptability – offering an intervention should be consistent with community values.
Efficiency – funding an intervention should offer good value for money.
These four principles, with some modification, have underpinned all subsequent work on
prioritisation in New Zealand.
The National Health Committee
In 1996 the Core Services Committee became the National Advisory Committee on Health
and Disability, usually referred to as the National Health Committee. This reflected a
widening in the role of the committee – most clearly in the expansion of its remit to cover
public health issues. This second role eventually led to the establishment of the Public Health
Advisory Committee (PHAC) as a permanent subcommittee of the NHC in 2001.
32
Around this time, the committee also refocused the scope of its attention on prioritisation. As
noted earlier, the principles to guide prioritisation decisions were published under the
auspices of the NHC rather than the CSC. Since then, however, the NHC’s work on
prioritisation has largely concentrated on the micro-layer of prioritisation decision-making.
This has primarily involved work on developing clinical guidelines and Clinical Priority
Access Criteria.57 The committee has also provided commentary on prioritisation work
undertaken by other organisations.
MACRO LAYER PRIORITISATION
Since the Core Service’s Committee rejection of exclusion processes, there has been little
attempt to develop explicit prioritisation processes at the macro-layer of the New Zealand
health sector. It is important to note that priorities are still set at this level – for example, the
Government-set Service Coverage Schedule (SCS) delineates the particular mix of services
that must be provided by District Health Boards (DHBs).xxv Similarly, strategic documents
such as the New Zealand Health Strategy and the Mäori Health Strategy: He Korowai
Oranga also set priorities to guide funding decisions.
These strategic documents also influence prioritisation decisions at the macro-layer by
influencing where funding is allocated within the overall health budget. It is therefore fair to
say that the first element of an explicit prioritisation system – identifying the values and
principles that should underlie decisions – does exist at this level. However, the process
whereby these priorities lead to the specific macro funding decisions that are made remains
implicit.
A few exclusions have been established at the macro-layer – most notably in screening for
particular conditions. In the main, however, these are comparatively minor and marginal in
nature and controversy continues to surround many of them. This is in line with international
experiences, where attempts to exclude services from funding have generally (the American
State of Oregon being the exception) proven very difficult to implement and have been
implemented only in very limited forms. The lack of explicit methods of priority setting at
the macro-layer is also in line with dominant international experience.
There is, however, one part of macro-layer decision-making where these general rules do not
hold true: Pharmac.
Pharmac: an international anomaly
Established in 1993, Pharmac is a national body that oversees the funding of pharmaceuticals
in New Zealand. Initially, the body was set up as a shared agency under the Regional Health
Authorities and later under the Health Funding Authority (see below), before being
established as a fully independent crown entity in 2000.
Pharmac was established to “secure for eligible people in need of pharmaceuticals the best
health outcomes that are reasonably achievable from pharmaceuticals treatment and from
xxv
To avoid confusion it should be noted that this does not constitute an exclusion-based approach to funding, as
it does not prevent resources being allocated to other interventions.
33
within the amount of funding provided,”58 and to this end it manages the funding allocated by
the government for community purchase of pharmaceuticals. The role of the agency is
therefore to determine what pharmaceuticals should receive public funding, the level of
subsidy they receive, and any guidelines or conditions relating to their prescription. xxvi These
details are recorded on the Pharmaceutical Schedule. Pharmac’s decisions are subject both to
internal appeal processes and judicial review. The agency also maintains a Pharmacology
and Therapeutics Advisory Committee (PTAC), consisting of (primarily medical) health
practitioners, to provide expert advice. Pharmac is not, however, bound to accept the
recommendations of this committee.
The Pharmac approach to prioritisation emphasises cost-effectiveness, primarily using CostUtility Analysis.xxvii The agency does include reference to wider principles in its decisionmaking processes, such as government-established priorities for health funding. However,
Pharmac has wide discretion in choosing how to apply these criteria, with the agency “giving
such weight to each criterion as Pharmac considers appropriate,”58 and providing little public
documentary evidence as to how it these factors influence its decision-making.53
In wider terms, Pharmac represents something of an anomaly both in New Zealand and
internationally with regard to prioritisation decisions. In particular, the agency appears to
have experienced few of the problems that have faced other institutions in setting priorities,
notably surrounding restricting investments in existing interventions. Indeed, the institution
is arguably the most successful prioritisation body in New Zealand – at least from a purely
“cost-containment” point of view. Between 1993 and 2001 the body listed 630 new or
enhanced products, widened the conditions for access for another 137, limited access to 36,
and de-listed 668.59 Similarly, where other countries have experienced rapid growth in public
expenditure on pharmaceuticals, New Zealand’s overall expenditure has actually declined
since 1998. Furthermore, Pharmac continues to make these decisions through a strongly
technical approach. The spread of institutional approaches to prioritisation has largely
bypassed the agency, with decisions continuing to be made primarily with reference to CostUtility Analysis.53
There has been little research, however, into possible reasons for Pharmac’s unusual success.
Some have suggested that it may be due to the availability of comprehensive data on costs
and benefits of pharmaceuticals compared to interventions in other parts of the health
sector.60 This is partly supported by the near-perfect record of Pharmac in defending its
decisions when they have been subjected to judicial review, which suggests that its decisionmaking processes are robust and defensible. However, the UK’s National Institute of
Clinical Excellence has had far less success in a similar area, suggesting that Pharmac’s
success is likely due to something more than simply the quality of information available.
xxvi
This situation, in which Pharmac acts as the sole purchaser of pharmaceuticals, is referred to as monopsony.
Just as in a monopoly, where there is only a single seller within a “normal” market, prices will theoretically be
higher than otherwise, a monopsonistic situation is intended to ensure that prices are lower than otherwise.
xxvii
As noted earlier, Cost Utility Analysis is a form of economic evaluation in which the likely benefit of
providing an intervention is measured in terms of the Quality-Adjusted Life Years gained as a result of that
intervention, and this benefit compared against the cost of providing that intervention. This is intended to give
an idea of the efficiency of an intervention: lower costs per QALY gained translates to greater efficiency
34
MICRO LAYER PRIORITISATION AND EVIDENCE BASED MEDICINE
In contrast to macro-layer prioritisation, extensive work has been undertaken in New Zealand
on developing processes to aid in prioritisation decisions at the micro-layer. This has
primarily involved the development of clinical guidelines and Clinical Priority Assessment
Criteria.
Clinical guidelines and the New Zealand Guidelines Group
Clinical guidelines are a well-established element of New Zealand’s health sector. The
production of these guidelines is undertaken by a wide variety of agencies and bodies; the
National Health Committee, the Accident Compensation Corporation, non-government
organisations and the Ministry of Health amongst others have developed guidelines
specifically for the New Zealand context.
Particular attention should be paid here to the position of the New Zealand Guidelines Group
(NZGG). The Group was originally established in 1996 under the auspices of the NHC, as a
network of experts interested in the development of such guidelines. The activities of this
network underpinned the NHC’s early work on guideline development.
In 1999, the NZGG left the National Health Committee and established itself as an
independent not-for-profit organisation. The Group now defines its role as being to lead “a
movement towards the delivery of high quality health and disability services throughout New
Zealand through a change in culture based on evidence and effectiveness.”61 This involves
two core activities. In the first instance, the NZGG develops clinical guidelines itself – for
example, the Group has recently produced guidelines for the management of Type 2
Diabetes, the assessment and management of people at risk of suicide, and the assessment
and management of cardiovascular risk.
Perhaps more important than this function, however, is the role of the NZGG in facilitating
the use of these guidelines. Firstly, the Group maintains a database of guidelines developed
in New Zealand. This allows guidelines to be easily accessed by health professionals.
Secondly, the NZGG undertakes activities to promote the visibility and use of guidelines
through, for example, co-sponsoring publication of the monthly Evidence Bulletin and
holding conferences on guideline use. Finally, the Group provides advice and training both
for the practitioners at whom guidelines are aimed, and for those involved in developing
guidelines.
The formulation and dissemination of clinical guidelines is a well-established feature of New
Zealand’s health sector. However, there has been comparatively little research into the actual
use of guidelines in New Zealand’s clinical settings. This is an important issue as guidelines
can clearly only have impact as prioritisation tools if they are actually used by practitioners.
Internationally, this is a significant problem – several studies have shown that even when
guidelines are viewed positively their actual use by health practitioners often remains low. 30
A recent review by the New Zealand Guidelines Group of a trial on adapting guidelines to
local conditions has identified the existence of some important barriers to the uptake of such
guidelines by clinicians.62 However, further research on issues surrounding the uptake of
guidelines is clearly justified.
35
Clinical Priority Access Criteria
The second main process that guides prioritisation at the micro-layer in New Zealand is the
use of Clinical Priority Access Criteria (CPAC). Whereas clinical guidelines relate to clinical
decisions to prescribe an intervention, CPAC influence when a given patient receives that
intervention – their position within the relevant booking system for elective services.xxviii
All providers of surgical services require some method of planning the allocation of resources
for providing those services. In this context, many theorists and decision-makers make a
distinction between “waiting lists” and “booking systems”. In this case, “waiting lists” refers
to situations in which the scheduling of interventions for patients occurs primarily on a “firstcome, first-served” basis, with the only difference between individuals being a differentiation
between “urgent”, “semi-urgent” and “routine” need for surgery. While such an approach
can be appropriate in some circumstances, such systems have been criticised as open to abuse
and being unacceptably vague about when and on what basis a patient will actually receive an
intervention.63
In contrast, booking systems of the type used in New Zealand are intended to provide a clear
guarantee about when a particular patient will receive surgery. As figure one below
illustrates, these systems incorporate the extensive use of guidelines to manage demand, with
the intention that surgery can then definitely occur within a specified period.
Figure One: Intended operation of New Zealand’s booking system for elective
surgeryxxix
Patient
assessed
need
Person develops
clinical
symptoms
and/or signs

Surgical
management
guidelines
GP referral
guidelines

Consult
GP
x
GP not
consulted
x
Referral not
indicated –
conservative
management

Refer to
surgeon
x
Surgery not
indicated –
return to GP
care for
conservative
management
Priority
system
threshold

Surgery
indicated
x
Above
threshold –
booked for
surgery within
6 months
Below threshold
– return to GP
care for
conservative
management
and review
The transition to a booking system was one of the initial recommendations of the Core
Services Committee. The key foundation of this process was the development of CPAC –
points-based systems in which the priority for offering a particular surgical intervention is
scored using a formula that weights a variety of biomedical and social factors such as the
severity of the condition, capacity to benefit from the intervention, and the effect of the
intervention on a person’s independence.49 As noted in the above figure, those who achieve a
It should be noted that in this specific context, the term “intervention” refers only to surgical intervention.
Derived from Figure 6.2 in Roake J, “Managing Waiting Lists”. In Gauld R, ed. Continuity amid chaos:
health care management and delivery in New Zealand. Dunedin: University of Otago Press; 2003:107-121.
xxviii
xxix
36
particular minimum score are guaranteed an intervention within six months, while those who
fail to meet this level are referred back to their general practitioner for ongoing management.
Since 1996, a wide variety of CPAC have been developed. Initial work in this area involved
bringing together specialist physicians in working parties that then developed specific
national Criteria for individual interventions that were both high-cost and constituted the
majority of interventions on waiting lists. These first CPAC have been recognised as
representing the leading edge of international criteria development.63
In 1998, however, the Health Funding Authority (see below) made the full introduction of
booking and scoring systems a requirement for the receipt of funding for elective surgery.64
As a result, hospitals were faced with the need for a far greater range of Criteria than the
intervention-specific forms that had been developed up to that point. This need in turn led to
the creation of locally developed generic systems, based on the general principles underlying
previous criteria, that prioritised across whole surgical specialties.
In contrast to the initial CPAC, these generic systems were the subject of harsh criticism.
The lack of piloting and pre-implementation assessment of the generic criteria was held to be
a particular weakness, as was the lack of consistency between regions in terms of both
scoring systems and thresholds for treatments – one regional ethics committee deemed the
entire process for developing Criteria in their area to be fundamentally flawed.49,64 As a
result of these issues, the National Waiting Times Project (and later the Elective Services
Group) began the development of standardised, national, generic criteria to bring a level of
consistency and ensure quality in the development of CPAC.
Ultimately, however, the overall effects (positive or negative) of establishing booking
systems and CPAC are unclear. In the first instance there exists little evidence that use of
scoring systems, even those New Zealand examples considered world leaders, accurately
translates into prioritising surgery for those with the most potential to benefit from it – the
principle which is intended to underlie New Zealand’s booking system.63,64,65 Furthermore,
while numbers waiting for surgery may have decreased since the introduction of CPAC, the
absence of a substantive audit of processes and procedures for waiting list management prior
to their introduction, and the concurrent implementation of other measures to reduce waiting
times, make it difficult to distinguish what contribution may have specifically been made by
scoring systems.64
MESO-LAYER PRIORITISATION
As noted earlier, the Core Services and National Health Committees both shied away from
placing tight restrictions on the authority of meso-layer decision-makers. While this has
given significant freedom to meso-layer decision-makers (at least in theory), it has also led to
significant problems. To a large extent this is because it is at the middle layer where the
pressures of prioritisation can become most apparent and controversial. It is the macro-layer
that controls the ability of these decision-makers to supply interventions, and the micro-layer
that controls demand for interventions. Decision-makers here can therefore become the
proverbial meat in the sandwich between restrictions from above and demands from below.
37
The Regional Health Authorities (1997 – 1998)
Once the NHC had developed its key principles, the question turned to how these should be
realised in practice. Responsibility for this was given to the Regional Health Authorities,
with the NHC intending to maintain a watching brief on prioritisation issues.
The majority of work on prioritisation by the Authorities was undertaken by the Midland
Health RHA, which had responsibility for the central North Island. Using the National
Health Committee’s work as a base, Midland Health developed five principles to underlie
priority setting decisions:66





Effectiveness: the ability of an intervention to provide benefit.
Equity: the need to ensure equality of opportunity for access to health interventions
for groups and/or individuals with similar levels of need.
Mäori Health: recognition of the Crown’s objectives for Mäori health and its
obligations under the Treaty of Waitangi.
Acceptability: consistency with the needs and values of communities.
Efficiency: value for money.
However, before this framework could be fully developed and implemented, the Regional
Health Authorities were dissolved in favour of the establishment of a single national Health
Funding Authority (HFA).
The Health Funding Authority (1998 – 2000)
The Health Funding Authority represented the centralisation of meso-layer decision-making
in New Zealand’s health sector. In contrast to both the previous Area Health Boards and
RHAs, the HFA brought responsibility for managing the funding of health interventions to a
national level – although the Authority did maintain four regional offices to administer
funding within those areas.xxx
As the body responsible for meso-layer decision-making, the HFA also took up responsibility
for developing a process for priority setting at this layer. Deciding not to reinvent the wheel,
the Authority took as its basis the work previously being undertaken by Midland Health. The
principles identified by that RHA were taken up, albeit with the renaming of the “efficiency”
principle as “cost”, and the Authority began development of a process whereby these
principles could be used to guide funding allocation.
The HFA’s approach was based on the use of Cost-Utility Analysis. The Authority
recognised that this approach would be both problematic and controversial as a method of
prioritising between interventions, and its emphasis on the principles of acceptability, Mäori
health, and equity, along with the particular process it adopted, was an attempt to deal with
this.60 In practice, however, the Authority was concerned primarily about methodological
issues associated with the use of CUA – exactly how these other principles would relate to
the measurement of QALYs was unclear.53
In 1999, the Ministry of Health invited the National Health Committee to review the HFA’s
proposed process. The committee in turn commissioned a formal evaluation of the process.
xxx
These regional offices were based on the previous RHA regions.
38
The resulting report, while supporting the underlying aim of the Authority, identified
significant concerns with the HFA’s approach.13 These included:






The manner in which the principles were to be interpreted in practice.
The tools used to quantify effectiveness.
The inability of CUA to take account of particular important health outcomes.
The unavailability of important relevant information for many services
The lack of clarity over how the HFA’s process would relate to decisions made at
other levels of the health sector.
The cost and impact of the prioritisation process itself.
Consequently, the NHC recommended that the HFA exercise caution in continuing its
prioritisation work and the Authority began a series of pilots to further refine the process.
Before significant further work could occur, however, the accession of a Labour-Alliance
government in late 1999 brought a further (and so far final) period of meso-layer
restructuring.
The present picture: District Health Boards and devolution
As part of a decision to largely eliminate the purchaser-provider split, the HFA was
incorporated into the Ministry of Health, and 21 District Health Boards (DHBs) established to
both administer Crown funding and actually provide most health services within a particular
region. The Ministry of Health gained responsibility for directly purchasing services in a
small number of specific areas where it was felt that a national focus on purchasing was
desirable, although some of these areas have since been devolved to DHBs.xxxi
Currently, meso-layer decision-making in New Zealand is largely the responsibility of the
DHBs, with the Ministry retaining capacity in some specific areas. As a result, prioritisation
at this layer is far from nationally consistent. Each DHB and relevant part of the Ministry has
developed their own process for making prioritisation decisions, and these vary notably from
each other. Although there are some common themes – most notably in the use of the
NHC/RHA/HFA principles in defining the core basis on which priority setting decisions
should be made – the specific processes and principles that are used vary widely.60
In the main, however, Boards appear to be taking a broadly institutional approach to setting
priorities inasmuch as their processes emphasise discussion, with tools such as Cost-Utility
Analysis being used as simply methods of measuring one aspect of decision-making:
It appears that many DHBs use consensual decision-making as a means of
deciding, on the basis of information provided on the principles, which
proposals go forward and which proposals do not.60
Importantly, however, meso-layer prioritisation decisions are influenced by prioritisation
decisions made at the macro-layer. Firstly, as noted earlier, there exist several national
strategic documents that outline priorities for the health sector as a whole. These include the
xxxi
Currently the two main areas in which the Ministry directly purchases services are public health, and
disability support services for people under 65.
39
New Zealand Health Strategy, the New Zealand Disability Strategy, xxxii the Mäori Health
Strategy: He Korowai Oranga, the Pacific Health and Disability Action Plan and the Primary
Health Care Strategy. These strategies set out particular concepts and areas that meso-layer
bodies must account for when prioritising. In effect, compliance with these documents acts
as another overarching principle that guides prioritisation processes at the meso-layer.
In addition to these documents, the macro-layer also exercises more focussed control over
meso-layer prioritisation decisions. In the first instance, the Ministry’s Service Coverage
Schedule (SCS) details the general types of services DHBs must ensure are available within
their region. The Schedule is, with a few exceptions, not a specific list of the particular
interventions that Boards are required to offer. Instead it lists general areas and types of
services, such as “hospital specialist medical and surgical services” within the area of renal
medicine.67 The existence of the schedule is intended to ensure that there exists a minimum
and consistent range of interventions offered to people throughout New Zealand.xxxiii
Outside these measures, a variety of macro-layer operational documents outline what sort of
characteristics must be displayed by the prioritisation processes used by meso-layer decisionmakers. For example, the Operational Policy Framework requires DHBs to use a principlebased framework, involve Mäori and the community at large, and maintain clear records of
the process that was followed in making prioritisation decisions.68 These documents do not
actually affect prioritisation by DHBs and the Ministry, but instead influence the systems
such decision-makers must use to make these decisions.
Finally, the government’s annual Budget regularly links funding within Vote: Health to
specific initiatives. These ring-fenced funds can be reserved for particular services (such as
hip operations), areas within the overall health sector (such as public health), or measures to
address the needs of particular populations. Such resources can only be accessed to provide
the specific services and initiatives for which such funding is made available.
Figure 2 overleaf demonstrates how the current different layers of prioritisation in New
Zealand’s health sector are intended to interact.xxxiv
xxxii
The New Zealand Disability Strategy does not focus only on health services. The Strategy sets out
objectives for all sectors, including aims relating to health, education, employment and human rights.
xxxiii
Ironically, it could be argued that this represents a form of the “positive listing” approach to prioritisation
originally discarded by the Core Services Committee.
xxxiv
Note that this diagram is focussed on structures for providing services. It does not include Pharmac – a
macro-layer body – or the New Zealand Guidelines Group which influences behaviour at the micro-layer.
40
Figure 2: Levels of priority setting in New Zealandxxxv
Government decides its investment priorities over all spending portfolios, and allocates
funding to Vote Health.
Minister of Health (Ministry of Health as Minister’s agent) decides priorities for the health
sector (for example, via the New Zealand Health Strategy) and sets the parameters for
decision making through, for example, the letter of Ministerial expectations, indicators of
DHB performance, the Service Coverage Schedule (SCS), the Crown Funding Agreement
(CFA) and determining how funding is to be split.
Funding held centrally by the Ministry to
contract provision of certain services.
Funding devolved to DHBs to contract
provision of most services
Ministry determines broad service priorities
that match coverage outlined in the SCS
through mix of government strategy
documents, assessments from service
directorates (including funder and provider
consultation) – e.g. ‘public health
programmes’.
DHB determines broad service priorities
that match coverage outlined in the SCS
and CFA through mix of government
strategy documents, health needs
assessment and community consultation
– e.g. ‘child health’, diabetes.
Ministry
determines
priorities
within
‘public
health
services’ –
e.g.
screening
services.
DHB
determines
priorities
within
‘child
health
services’ –
e.g.
bedwetting
alarms.
DHB
determines
priorities
within
‘diabetes
services.’
Ministry determines
high-need patients (e.g.
through access criteria)
for screening services.
DHB determines highneed patients (e.g.
through access criteria)
for bedwetting alarms.
Health practitioners make clinical
decisions and apply access criteria.
Health practitioners make clinical
decisions and apply access criteria.
xxxv
Derived from Figure 1 in Ministry of Health. Current prioritisation processes in New Zealand. Wellington:
Ministry of Health, 2003.
41
Ongoing issues at the meso-layer
Recent research by the Ministry of Health has identified the existence of several key
difficulties that DHBs feel are hindering their ability to make effective prioritisation
decisions.xxxvi The barriers identified by Boards can be grouped into four major factors.
Staff capacity
Firstly, many Boards feel that their ability to make effective prioritisation decisions is limited
by available staff capacity. In the first instance, this simply refers to the number of staff
available to undertake necessary analysis. Prioritisation is a time-consuming and complex
process even for larger DHBs, and this becomes even more of an issue for small Boards. The
planning and funding activities expected of each Board are the same regardless of size and
capacity, and consequently smaller Boards with comparatively smaller staff are required to
undertake the same functions as larger DHBs without the personnel to support this.
Furthermore, DHBs have identified a lack of individuals with a strong understanding of
prioritisation processes and methodologies as a key hindrance to effective decision-making.
This is the case not only with regard to analysts, but also in terms of Board members who are
charged with interpreting information provided by analysts and making decisions on that
basis. Once again, this may be less of an issue with larger Boards who may have the ability
to draw on a larger pool of staff and Board members with previous experience in the HFA or
with general priority setting expertise.
Political factors
A second major barrier to prioritisation relates to political factors surrounding such decisions.
DHBs have noted that the communities they serve often do not appreciate the pressures and
constraints under which they operate, and that stakeholders often do not accept the need for
prioritisation decisions to be made – especially around disinvestment in existing services.
This in turn makes priority setting difficult, as the financial realities of operating a DHB must
be balanced with the beliefs and desires of the local community, clinicians, and macro-layer
decision-makers.
It is unlikely, however, that this problem will be easily overcome – if, indeed, it can be. As
noted earlier in this paper, prioritisation is an innately contestable and controversial process
that many have argued can have no “correct” conclusion. In this context, it is likely that there
will always exist at least some dissatisfaction with decisions made by Boards. Increasing
involvement of clinicians, the general public and other stakeholders in the prioritisation
process may lessen this, but it is likely that setting priorities will always be subject to political
reality.
xxxvi
The information in this section is, unless other noted, drawn from Ministry of Health. Current prioritisation
processes in New Zealand. Wellington: Ministry of Health, 2003.
42
Macro-layer constraints
The third key barrier to prioritisation relates to constraints on prioritisation decisions
introduced at the macro-layer. These constraints can be divided into two groups. Firstly,
there exist the overall levels of funding allocated to DHBs. Boards have argued that current
levels of funding – especially, under the population-based funding formula, funding for
smaller Boards – simply does not provide enough resources to effectively prioritise funding
on new interventions. At the same time this makes prioritisation in general more difficult and
pressured, as attempts to reduce deficits require disinvestment in services.
This budgetary constraint is seen as particularly critical given the second macro-layer factor:
ring-fencing and tagging of funding, and the rigidity of documents such as the Service
Coverage Schedule and Operational Services Framework. It has been argued that not only
does this reduce the ability of DHBs to be flexible and reallocate funding in an effective
manner, but when new funding is allocated it is often linked to specific services that may not
be related to areas of particular concern for a specific Board.
Although not often explicitly framed as such, this discontent is effectively a restatement of
the core services debate. This debate is essentially over how control over access to
interventions should be distributed between macro-, meso-, and micro-layers. Critics of
current arrangements claim that, while DHBs may ostensibly have significant decisionmaking power – and therefore have commensurately high levels of accountability regarding
the outcomes of allocating their resources – in practice, the macro-layer exercises significant
constraints over their ability to make decisions. The net result of this is the majority of DHB
expenditure is tied up in providing a large de facto “core”, and practical Board autonomy is
confined to a far smaller group of marginal services. This, it has been argued, leads to a
perverse situation in which Boards are held publicly and legally accountable for achieving
particular health outcomes, and yet are constrained in their ability to achieve those outcomes
by macro-layer decisions regarding required outputs.
Availability of information
The final key factor inhibiting Boards’ ability to prioritise effectively relates to the
information that underpins prioritisation decisions. At a fundamental level, this relates to the
identification of candidates for disinvestment or investment. Beyond this, however, some
Boards have identified a perceived lack of information relating to the costs and benefits of
particular services. This relates both to the availability of the information itself and also
exactly how these costs and benefits should be assessed. This, in turn, feeds into the
previously identified barrier of staff capacity, as analysts and Boards face significant
obstacles in carrying out analysis and making decisions on the basis of such analyses.
As with political barriers, however, this is a complex issue and one that may not be amenable
to easy answers. For example, arguments over how the “benefit” of an intervention can and
should be measured have been conducted amongst and between theorists, advocacy groups
and policy-makers for decades – the “QALY” debate being perhaps the most visible of these.
43
Consistency of approaches
In addition to these factors, there also exists a general level of dissatisfaction amongst some
with regard to the overall picture of approaches to prioritisation. There currently exists no
unified approach to prioritisation. As noted earlier in this paper, each DHB has developed a
different process for making prioritisation decisions, and although the principles developed
by the NHC and refined through the RHAs and HFA usually provide the core to these
processes, the full range of decision-making criteria and the precise processes for making
prioritisation decisions varies significantly. On top of this, the Ministry of Health operates
several different prioritisation processes to guide its own funding decisions.
This highly differentiated situation is defensible on the grounds that prioritisation processes
need to take account of the particular contexts within which they operate. Different DHBs
operate within different environments and serve different populations, while different
Directorates in the Ministry of Health deal with different forms of “health”. A rigid “onesize-fits-all” approach would likely fail to reflect these variations. However, this does not
mean that the current level of difference is appropriate, and there exists a clear desire for an
increase in consistency between prioritisation decision-makers.
Consequently, work has begun on developing a unified approach to making prioritisation
decisions that could be used by all meso-layer decision-makers. A joint project of several
DHBs and the Ministry, with input from both policy-makers and the wider health sector, has
been looking at this issues and led to the development of a framework to apply in making
prioritisation decisions. This framework attempts to balance the previously noted desire for
increased coherency with the need for processes to be adaptable to local conditions. At the
time of writing, the National Health Committee is evaluating the experience of those
decision-makers involved in piloting the framework.
SUMMARY
The state of prioritisation in the New Zealand health system differs significantly at all three
layers of decision-making. Although there exists a strong theoretical commitment to making
prioritisation decisions explicit, the extent to which this has been translated into practice
varies markedly between layers.
At the macro-layer, prioritisation remains essentially an implicit process. The health system
does clearly define priorities at this layer, both through strategic documents such as the New
Zealand Health Strategy and He Korowai Oranga, and the operational requirements placed on
meso-layer decision-makers. These documents do influence central government funding of
the health system – if they do not affect the overall allocation of funding to Vote Health they
certainly underlie the allocation of resources within that Vote. However, the process
whereby these principles are translated into practice is not clear. Although funding may be
allocated on the basis of these principles, there is no clearly-defined process that sets out how
this is undertaken.
At the micro-layer, in contrast, considerable attention has been paid to prioritisation in the
form of the development of clinical guidelines and access criteria. New Zealand has been
recognised as a world leader in these areas, and as a country is arguably one of the leaders in
implementing evidence-based approaches to clinical decision-making. Important issues still
44
exist at this level regarding the effectiveness of these processes. However, these questions
and difficulties are less a product of New Zealand’s specific implementation than underlying
dilemmas surrounding decision-making at the clinical level.
Finally, meso-layer prioritisation occupies an uncertain middle ground. Although discussion
of priority setting at this level has been near-constant since the early 1990s, it has also been a
victim of the continual restructuring that plagued the New Zealand health sector throughout
the decade. Neither the RHAs nor the HFA remained in existence long enough to progress
far beyond their initial work, and DHBs have spent the years since their establishment
primarily building their own capability and capacity to maintain existing service
arrangements. As a result, while meso-layer priority setting is largely explicit there exist a
plethora of different systems and processes throughout the country, and DHBs at least believe
that there exist significant barriers to making effective prioritisation decisions. In this
context, the previously mentioned work of a joint Ministry-DHB working group to develop a
unified, yet flexible and locally-adaptable, framework for making prioritisation decisions has
significant potential benefit.
45
APPENDIX: DEVELOPMENT AND ASSESSMENT PROCESSES OF THE
NATIONAL INSTITUTE FOR CLINICAL EFFECTIVENESS
Guideline Development
The process for establishing clinical guidelines begins with the Department of Health (DoH)
and the National Assembly for Wales (NAW), with these two bodies jointly deciding to refer
a particular topic to the Institute. In making this decision, the DoH and NAW are required to
have regard to whether or not developing such guidelines could:46
-
improve health;
reduce costs to the NHS;
link with a technology appraisal (see below) being carried out by NICE;
link with Government priorities for health; and
help to reduce variations in clinical practice or care.
The guidelines themselves are developed through one of six National Collaborating Centres
(NCCs), each of which specialises in a particular area of health services: Acute Care, Chronic
Conditions, Mental Health, Nursing and Supportive Care, Primary Care, and Women and
Children’s Health. These are organisational, rather than geographic, centres and include a
variety of professional, academic, and other relevant bodies.xxxvii Once approached to
develop a guideline, the members of a particular NCC establish a Guidelines Development
Group (GDG) which has responsibility for actually formulating the guidelines on behalf of
the Centre.
In addition, NICE establishes a Guidelines Advisory Committee Panel (GAC Panel) for each
individual guideline. This panel includes a variety of members, including an adviser on
patient and carer issues and an economic adviser, and is responsible for overseeing and
formally approving the guidelines developed by the GDG.
Although there is no set method for actually formulating the guidelines, the overall process
entails a series of phases through which the Centre must proceed. xxxviii Firstly, the Centre
develops a scope which covers the patient groups to whom the guideline will apply, the
particular healthcare setting that the guideline will focus on (for example, general practice or
a hospital setting), the use of which treatments and/or approaches will be considered under
the guideline, and the manner in which the Centre will assess the clinical and cost
effectiveness of these treatments and/or approaches.46
After consultation on this scope the NCC develops a workplan for developing the guideline
and, once NICE agrees to this plan, proceeds with developing the guideline. This
development proceeds through two phases in which the NCC circulates draft guidelines for
xxxvii
The NCC for Acute Conditions, for example, includes the Royal College of Surgeons, the Faculty of Dental
Surgery, the Royal College of Anaesthetists, and the Royal College of Ophthalmologists. The NCC for Primary
Care, on the other hand, consists of the Royal College of General Practitioners, Leicester University’s Clinical
Governance Research and Development Unit, the Community Practitioners and Health Visitors Association,
Sheffield University’s School of Health and Related Research, and the Royal Pharmaceutical Society of Great
Britain.
xxxviii
Full descriptions of this process can be found in the NICE publications The Guideline Development
Process – Information for the Public and the NHS, The Guideline Development Process – Information for
Stakeholders and The Guideline Development Process – Information for National Collaborating Centres and
Guideline Development Groups.
46
comment from both stakeholders and the GAC Panel before the presentation of the final
guidelines for approval by the GAC Panel and NICE itself.
Although there is no set process (apart from the aforementioned phases) that the Centre must
follow in determining guidelines, certain principles are expected to underlie their
formulation. They should:46
-
aim to improve the quality of clinical care;
address the clinical effectiveness of treatments or management approaches;
address the cost effectiveness of treatments or management approaches;
be advisory;
be developed through a process that considers all who might be affected by the
guideline;
be based on the best possible research evidence and professional consensus;
be developed using methods that command the respect of patients, the NHS and NHS
stakeholders;
be developed with the involvement of patients and healthcare professionals;
set out the clinical care that might reasonably be expected throughout the NHS in
England and Wales.
As can be seen, the majority of these principles relate to how such guidelines should be
formulated. In terms of guiding decision-making, the only principles underlying the
guidelines themselves are those of clinical effectiveness and cost effectiveness.
Technology Assessment
NICE’s method of assessing new health interventions is similar to that used to develop
guidelines. In the first instance, the DoH and the NAW request that a given health
technology be appraised. “Technology” is defined broadly, and includes pharmaceuticals,
medical devices, diagnostic techniques, surgical procedures, “other therapeutic
interventions”, and methods of health promotion.45 In making this decision, the DoH and
NAW are assisted by the National Horizon Scanning Centre and National Prescribing Centre,
both of whom provide advice on new or emerging technologies that should be evaluated.xxxix
In contrast to the development of clinical guidelines, the Institute itself, in consultation with
relevant stakeholders referred to as “consultees”, is responsible for the initial scoping of a
given technology appraisal. This scope identifies the patient population for a given
technology, the particular interventions being examined, what interventions these
technologies will be compared with, and how “effectiveness” will be defined for the purpose
of the appraisal.
After the scope has been developed, NICE commissions another body – usually an academic
unit – to undertake an evaluation on its behalf.xl This body, referred to as the assessment
group, prepares an assessment report detailing the clinical and cost effectiveness of the
technology in the manner defined in the scope. This initial report is released to consultees for
xxxix
The National Prescribing Centre provides this advice in relation to pharmaceuticals, while the National
Horizon Scanning Centre provides advice on other health interventions.
xl
For example, the recent assessment of drug eluting stents for coronary disease (Appraisal number 71) was
conducted by the Liverpool Reviews and Implementation Group at the University of Liverpool, while that on
the removal of wisdom teeth was conducted by the NHS Centre for Reviews and Dissemination.
47
commentary, and then proceeds to an Appraisal Committee,xli who use this report and other
evidence submitted to it by the consultees to determine the final appraisal of the technology.
This phase consists of developing a draft appraisal that is distributed to consultees for
commentary, followed by the production of the final appraisal incorporating, where
appropriate, the views of the consultees. Consultees then have fifteen working days in which
to appeal the results of the appraisal.
The results of an appraisal can take the form of four possible recommendations.
 Routine use in all patients for whom the technology is appropriate.
 Restricted use of the technology amongst particular patient groups. This may be
accompanied by a recommendation that further research on clinical and cost
effectiveness be conducted.
 Use of the technology only within the context of clinical trials.
 That the technology should not be used.
The Appraisal Committee also usually sets a point at which its recommendations are subject
to review, although it has the capacity to define an assessment as “static” in which case any
further review must specifically be requested by the Department of Health or Welsh National
Assembly.
xli
This appraisal committee is appointed by NICE, and consists of health professionals, patient groups, health
economists and health sector managers. The committee consists of both a core membership, and up to five
additional co-opted members with expertise relevant to the technology being appraised.
48
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