The fallacy of the equity-efficiency trade off: rethinking the efficient health system

Abstract

In the health systems literature one can see discussions about the trade off between the equity achievable by the system and its efficiency. Essentially it is argued that as greater health equity is achieved, so the level of efficiency will diminish. This argument is borrowed from economics literature on market efficiency. In the application of the economic argument to health, however, serious errors have been made, because it is quite reasonable to talk of both health equity being a desirable output of a health system, and the efficient production of that output. In this article we discuss notions of efficiency, and the equity-efficiency trade off, before considering the implications of this for health systems.