This paper offers a critical appraisal of the various methods used to date to investigate inequity in the delivery of health care. It concludes that none of the methods used to date is particularly well equipped to provide unbiassed estimates of the extent of inequity. It also concludes that Le Grand's (1978) approach is likely to point towards inequity favouring the rich even when none exists. The paper offers an alternative approach, which builds on the approaches to date but seeks to overcome their deficiencies.
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*This paper derives from the European Community’s COMAC project on Distributive Aspects of Health Care Policies. We are grateful to the EC for financial support and to Frans Rutten - the project leader - for encouragement and advice. We are also grateful to the Centro Europa Ricerche (CER) in Rome - and in particular to Stefania Gabriele - for providing data from CER’s Health Care Consumption Survey; to Ugo Ercolani of the Italian Ministry of Health and George France of the Istituto di Studi sulle Regioni for help in obtaining data on Italian health care expenditures; and to Jan van Emmerick for help in analysing data from the Dutch Health Interview Survey. We are also grateful to Guido Citoni, Julian Le Grand and an anonymous referee for helpful comments on an earlier version; the usual disclaimer applies. ‘The issue of vertical equity in the delivery of health care - i.e. the issue of how those in unequal need should be treated - rarely gets discussed in the health economics literature. Cullis and West (1979, pp. 237-239) is a rare exception. Hurst (1985) claims to address the issue of vertical equity, but uses the definition of equity proposed by Aday et al. (1980). namely that equity requires that illness be the major determinant of the allocation of resources. This definition is really a definition of horizontal rather than vertical equity (cf. fn. 6).