Health care deprivation profiles in the measurement of inequality and inequity: an application to GP fundholding in the English NHS

This paper proposes a new approach to the measurement of inequality and inequity in the delivery of health care based on recent contributions to the literature of poverty and deprivation. This approach has some appealing characteristics that enlarge the scope of inequity analysis: 1) the measure of inequity does not rely on socio-economic ranks; 2) inequity can be additively decomposed by population subgroups; 3) the approach provides some indirect control for unobserved need variables; 4) it provides a graphical representation of important aspects of the distribution of inequity; 5) it offers a wide range of indices that are consistent with dominance. The paper provides an empirical illustration investigating the effect of the GP fundholding reform on equity in the most deprived quartile of electoral wards of England in the years 1991 to 1996. Elective hip replacements are used as an indicator of inequity in secondary care. The results show that the most equitable GP practices self-selected into the fundholding scheme in 1991; evidence of an inequity-reducing treatment effect as well as a self-selection effect are found in 1992 and 1993; the self-selection process reduces and no evidence of a treatment effect is present from 1994 to 1996.