On the Possibility of a Positive-Sum Game in the Distribution of Health Care Resources

Abstract

Health care resource distribution is a subject of debate among health policy analysts, economists, and philosophers. In the United States, there is a widening gap between the more-and less-advantaged socioeconomic sub-populations in terms of both health care resource distribution and outcomes. Conventional wisdom suggests that there is a tradeoff, a zero-sum game, between efficiency and fairness in the distribution of health care resources. Promoting fairness in the distribution of health care resources and outcomes is not efficient in terms of maximization of a health outcome production function. On the other side of the coin, improving efficiency comes at the expense of fairness. Such conventional wisdom is supported in part by standard static Paretian welfare analysis. However, in this paper it is shown that in a dynamic setting in which there are efficiency gains in the health production function, fairness in distribution of health care resources can improve simultaneously.