Elsevier

Social Science & Medicine

Volume 67, Issue 7, October 2008, Pages 1190-1198
Social Science & Medicine

Welfarism, extra-welfarism and capability: The spread of ideas in health economics

https://doi.org/10.1016/j.socscimed.2008.06.027Get rights and content

Abstract

This paper explores the spread of ideas within health economics, in relation to the impact of the capability approach to date and the extent to which it might impact in the future. The paper uses UK decision making to illustrate this spread of ideas. Within health economics, Culyer used the capability approach in developing the extra-welfarist perspective (where health status directly influences which social state is preferred). It is not a direct application of capability as the evaluation's focus remains narrow; the concern is with functioning, and maximisation is retained. Culyer's work provided a theoretical basis for using quality-adjusted life-years in decision making and this perspective is accepted as the basis for evaluation by the UK National Institute of Health and Clinical Excellence (NICE). To the extent that extra-welfarism represents a capability approach, capabilities influence NICE's decision making and hence UK health care provision. This paper explores the extent to which extra-welfarism draws on the capability approach; the spread of extra-welfarist ideas; and recent interest in more direct applications of the capability approach.

Introduction

It is standard to consider health economics as the application of the discipline of economics to questions of health. Its primary concern is the allocation of scarce resources within the health sector, and in both philosophy and methodology it draws upon the theories, both normative and positive, developed within its parent discipline of economics. Health economists work in a variety of areas. Much work is of an explanatory nature examining issues relating to the nature of health care systems as well as health more generally. The vast majority of this explanatory work is conducted within the neoclassical framework. With respect to normative assessments, however, health economics has frequently moved in its own distinct directions, at times rejecting aspects of the standard economics approaches yet managing to retain a foot in the mainstream economist camp.

This paper focuses on the development and spread of ideas in health economics and health care decision making. The paper explores three themes in greater detail. First, it explores welfarist economics and the capability approach and how they combine in so-called ‘extra-welfarism’ within health economics. This provides a basis for considering how the idea of capabilities moved initially into the field of health economics. Second, it describes how these ideas have spread, and have influenced both academic thought and health policy and practice. The context of UK decision making is used to illustrate these issues. Third, the recent interest in a more direct application of the capability approach is explored in the context of the limitations of extra-welfarism, but also acknowledging the influence of extra-welfarism on the acceptability of non-welfarist approaches amongst health economists. The paper concludes by evaluating the likelihood of the spread of a more direct application of the capability approach within health economics, in the context of other recent developments in the field such as the desire to directly measure experienced utility.

Section snippets

Welfarism

Normative health economics is focused on the economic evaluation of interventions, mainly clinical or organisational, to aid decision makers in allocating health care resources. Economic evaluation of health care stems initially from standard paretian welfarist views (Boadway & Bruce, 1993), following the basic principles that individuals are the best judges of their own welfare (well-being) and that, if one individual can be made better off without another being made worse off, there is a

The spread and influence of extra-welfarist ideas in health: An illustration in the UK context

As indicated above, the definition of extra-welfarism has been unclear and confused over the years. Recently it has been more clearly defined in the following terms: ‘(i) it permits the use of outcomes other than utility; (ii) it permits the use of sources of valuation other than the affected individuals; (iii) it permits the weighting of outcomes (whether utility or other) according to principles that need not be preference-based and (iv) it permits interpersonal comparisons of well-being in a

Changing ideas in health economics: does the capability approach offer promise for the future?

This apparent success of the extra-welfarist approach in influencing health economics, health care decision making and, ultimately, health itself in the UK, might lead to the view that there is general satisfaction with the theoretical approach in health economics, but there remain concerns that the emphasis on the maximisation of health as a sole goal for health care decision making, associated with the extra-welfarist approach, is inappropriate (Mooney et al., 2007). Indeed, there remain a

Conclusion

The partial use of the capability approach has already changed health economics, health care decision making and health in the UK, but its contribution could potentially be much greater over the coming years. A process of incremental change, at a level with which both economists and decision makers are comfortable, can be identified here. Health economics began as an off-shoot from economics, bringing with it standard mainstream economic theory, of which welfarism is clearly a part. In the

Acknowledgements

We would like to thank participants at the Health Economists' Study Group meeting, January 2007 and at the Human Capability and Development Association annual conference 2007 for comments on earlier versions of this paper. We would also like to thank two anonymous reviewers for their comments.

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