Economics, public health and health care purchasing: reinventing the wheel?

In this paper, a framework for using economics in health care priority setting is outlined. This framework is known as programme budgeting and marginal analysis (PBMA). Programme budgeting involves an assessment of how health care resources are currently distributed amongst programmes and within programmes. Such data can be used along with other information on local needs to decide on the main areas of change in service delivery. As resources are fixed, areas of change requiring more resources will be funded from service reductions within the same programme or within another programme. Candidates for more resources should be compared with each other and with candidates for service reduction to determine whether and what changes should go ahead. This involves 'marginal analysis' of costs and benefits of the candidates. In the paper, the problems with implementing this approach are outlined and the contribution of the other papers in the volume described.