Public spending on health care: how are different criteria related? A second opinion.

A natural response to difficult questions is to increase the number of objectives one pursues in the hope that each of them separately will be easy to satisfy. This note critically evaluates this strategy as employed in a recent paper in this journal [Musgrove, Health Policy 1999;47:207-223], especially its evaluation of the role of cost-effectiveness in priority setting in the health sector. It is suggested that cost-effectiveness measures provide information of limited use, and that the tools of applied welfare economics are sufficient to guide the policy choices addressed in the paper. Students of health economics and health policy makers would do well to be exposed to these tools.