Balancing Equity and Efficiency in the Allocation of Health Resources—Where Is the Middle Ground?

The notion of equity in health service delivery has been embodied in several of the Global Sustainable Development Goals (SDGs), especially the aspiration for universal health coverage (UHC). At the same time, escalating healthcare costs amidst dwindling resources continue to ignite discussions on the efficiency aspect of healthcare delivery at both operational and system levels. Therefore, health planners and managers have had to grapple with balancing the two, given limited resources and sophisticated population health needs. Undoubtedly, the concepts of equity and efficiency have overarching importance in healthcare. While efficiency dictates an ‘economical’ use of the limited healthcare resources, equity advocates their fair and ethical use. Some have leaned on this to argue that one has to be forgone in search of the other. In search of a ‘middle ground’, this paper explores the conceptual underpinnings of equity and efficiency in the context of healthcare resource allocation with some empirical examples from high-income and low- and middle-income settings. We conclude by arguing that equity and efficiency are, and ought to be, treated as complementary rather than conflicting considerations in distributing health resources. Each could be pursued without necessarily compromising the other—what matters is an explicit criterion of what will be ‘equitable’ in ensuring efficient allocation of resources, and on the other hand, what options will be considered more ‘efficient’ when equity objectives are pursued. Thus, equity can be achieved in an efficient way, while efficiency can drive the attainment of equity.