THE CAPABILITY APPROACH IS NOT USEFUL AS A WAY OF INFORMING RESOURCE ALLOCATION IN HEALTHCARE BECAUSE THERE IS NO DEFINITIVE LIST OF CAPABILITIES.DISCUSS.
Introduction
This essay explains the concept of capability approach and how it has been used to assess issues of equity and/or efficiency when resource allocation is to be made in healthcare. The first part of the essay will discuss the capability approach and compare this to the welfarist and non-welfarist approaches. The second part will look into how these approaches fit into health economics and their importance in informing policy makers when decision is to be taken on policy formulation and implementation.
This notion the capability approach was developed by the economist and philosopher named Sen Amartya who was dissatisfied with the welfare economics in making social policy decisions. His concern was the fact that the utilitarianism considered individual preferences only and does not include other non-utility information such as rights e.tc. Also there has been further development by another philosopher Martha Nussbaum. We will concentrate on Sen’s notion and discuss that of Nussbaum whenever there are conflicts.
The core concepts of the capability approach is that it is concerned with what individuals are effectively able to do and to be, which is based on their capabilities, and functionings – which is the individual’s being and doings e.g., being well nourished, well educated e.t.c. What the capability approach considers important is that individuals should have the freedom to be able to make choices on how to live their lives. This choice of freedom can lead to either low or high level of functionings depending on the individual’s choice. This is very important in that these levels are not imposed but based on choice. A health example, occurs when a patient A does not have contraception because she has no access to contraceptive services and a patient B does not have contraception despite having access, but objects based on religious grounds(being of the Catholic faith), patients A and B have the same functionings but B has a greater capability. It is very important to differentiate between functionings and capabilities as they play different roles in different analysis He also described a distinction between well-being and agency goals of an individual. The agency goals are when it includes some other person’s well-being.
So what capabilities?
There is no definitive list of capabilities. Thus Robeyns (2005, p 96) comments, “the capability approach thus covers all dimensions of human well-being”. Due to this extensive coverage of the capability approach it will therefore be very difficult to make a definitive list and Sen have explicitly refused from being forced into making a list. He has always argued that capabilities will depend on the context of its usage, though this has made other scholars see this as a limitation of the capability. Nussbaum has criticised Sen for his inability to give a list of relevant capabilities, and she goes further to address the issue by developing ten ‘central human capabilities’ which are (1) life, (2)bodily health,(3)bodily integrity,(4)senses, imagination and thought,(5) emotions,(6) practical reasoning,(7) affiliation,(8) other species (9) play, and (10) control over one’s environment, but quick to add that her list is not exhaustive, and open to revision. She also argued that a set of list will avoid the situation where any capability can be seen as valuable even if it is used to cause harm to others. In response to these criticisms Sen said that it was not an issue of listing important capabilities that is relevant but endorsing a predetermined list of capabilities.
An example of this is the human development index (HDI) which has been used by the United Nations (UN) since 1990 and adopted concepts from the capability approach. The selected functionings are life expectancy at birth, education (adult literacy and education enrolment rates), and standard of living. The gross domestic product (GDP) was found to be misleading as countries which ranked high in terms of their GDP were discovered to be lower in terms of HDI e.g. they may have poor educational performance, and Fukuda-Parr (2003, p304) commented, “the human development approach is unique in its emphasis on assessing development by how well it expands the capabilities of all people”. The human development has been criticised as being limited to three capabilities used in the HDI and Sen concluded that the selection of a list can be done by a democratic process according the purpose for which it is required as the list can be affected by many factors such as social, cultural and demographic settings. Both Sen and Nussbaum’s different views about the selection of capabilities can be plagued by using democratic decision making. Some work has been undertaken by some scholars on this but not without problems. Robeyns (2005) tried to make three distinct categories by which capabilities can be selected. She distinguished between small and large-scale projects where there can debate in small groups and deliberation at conferences respectively. And large-scale policy design, which is yet to happen.
Robeyns (2003) also gave four criteria that all list should meet, (1) explicit formulation, be made explicit, discussed and defended, (2) methodological justification, clarify and scrutinise the method that the list came from, (3) looking at different levels of generality by making 2 lists as constraints may change over time and (4) exhaustion and non-reduction, in which all important elements are included in the list. Robeyns further stated that these criteria should serve as check and balance so therefore anyone using them should consider the context so as to avoid bias that may result from their own background. So how do we value the set of capabilities chosen? The answer to this is the use of aggregation, which can be at the individual level where it will decided if there is a need to aggregate and what weight should be attached. This is referred to as intrapersonal aggregation, and the second type known as interpersonal is where the data is aggregated over the individuals. The question is then how will a trade-off be done against different capabilities, because this can lead to loss of vital information which is the reason Nussbaum argued that the government should be able to give its citizens a minimum threshold of her ten capabilities instead of trading them against each other. Similarly other scholars have argued against trade-offs as they view different capabilities as different entities that cannot be sacrificed for another.
It can seen that the literature of the capability approach remains largely conceptual and many scholars have attempted to put this theory into practice and one such is the study carried out by Anand et al(2005) developed a capability questionnaire which contained about 60 capability indicators from the British Household Panel Survey(BHPS). Alkire (2005) had argued that the vital and pertinent question was the probability of selecting a list of acceptable capabilities but Anand et al argued that it was probable but their results were incomplete. But Coast et al (2008) went further and developed another method known as Investigating Choice Experiments for the preferences of older people CAPability instrument (ICECAP) capability index for older people in which they used 5 attributes and 4 outcomes, the attributes were attachment, security, role, enjoyment and control. They used best-worst scaling method in which individuals were asked to make a choice between what they thought were the best or the worst and were not asked to make trade-offs so it can be concluded that it was their values and not preferences that was elicited. The process by which capabilities should be selected is still unclear, which will always be a strong limitation as Robeyns(2005 p 106) comments, “it is not clear how these processes of public reasoning and democracy are going to take place, and how we can make sure that minimal conditions of fair representation are guaranteed”.
A lot of other studies have been carried out; Stephan Klasen used the Southern African Labour and Development Research Unit (SALDRU) household survey to compare functionings-poor with the expenditure-poor. The ICECAP has made more advances than the others.
Traditional welfare economics
In the opening paragraph of this essay it was stated that Sen’s main argument against the welfare economics was the assumption on which it is formed, which states that social welfare function is about personal utilities, even if this is a sadistic preference it does not matter, In other words there is no ‘commitment’, which is one of the issue raised by Sen about agency goals which he described as well-being supplemented with commitments i.e. when the action is not beneficial to the individual. The welfarist object to this claim saying that any behaviour that falls short of utility maximisation even, if there is a commitment is a deviation from the welfarist approach.
An almost exclusive focus on outcomes in evaluating policies and neglecting rights, duties e.t.c was seen as a divergence from social norms by Sen, even Brouwer et al (2008, p327) argued that social policy focuses on characteristics such as health, skill, handicap e.t.c.,where the differences between people frequently raise issues of equity � which are issues not addressed by the welfarist approach and concluded that it was Sen that released economists from the bondage of the welfarist approach by introducing the capabilities.
Another key feature is individual sovereignty, which claims that individual are the best judges of their own welfare and as long as there can be an improvement with one individual without another being made worse there is improvement in societal welfare, but Coast et al (2008, p 1191) were quick to criticise this notion in policy terms saying that in any decision in health care where resources needs to be allocated to one group it has to be done at the expense of another. This notion rejects paternalism i.e. a third party may know what is better for the individuals which the reason the capability approach does not use the individual preferences in evaluation based on the grounds that individuals may have adapted to a particular situation and may not recognise their capabilities.
The final assumption of the welfarist approach is the separation of efficiency and equity. The Pareto optimal concept which claimed that the allocation of resources can be done through a perfect market process whereby economists can analyse the efficiency but leave the issue of equity to a political process � the welfarist are not concerned with the difference in equity, because it is the result of disparity in income which can only be corrected by government policies, and in response Sen( 1987,p 32), argued that how possible can a state be Pareto optimal where some people are in abject poverty and others in luxury, and those living in poverty cannot be made better off without affecting the wealthy.
Extra-welfarism
The failure of the welfarist approach in some of the contexts discussed above implies the need for an alternative approach for social welfare and this led to the term extra-welfarism which was first proposed by Culyer (1989), drawing conclusions from Sen’s capability approach. Sen proposed that the focus on utility should be looked at a broader perspective which took into account the quality of the utility i.e. individual’s capability. The extra-welfarists argued that the most important outcome is not utility but non-utility parameters such as focus on the equity weights, characteristics, capabilities e.t.c. In other words they argued that the health outcome was the most relevant for conducting normative analysis within the health care setting. This statement explicitly highlighted a key distinction between the welfarist approach and the extra-welfarist approach, but similar to Sen’s capability approach in focusing on non- utility measures.However, there is some limitations, and first is the focus only on health whereas capability approach advocates the use of different features of capability. This makes it one-dimensional when compared with the multidimensional aspects of the capability approach e.g. the Nussbaum list which is made up of ten ‘central human capabilities’. The second argument is that it discuss about the individual’s functionings e.g. being healthy? , not about the ability to be healthy – that is the ability to do other things through being healthy. The third concern is that extra-welfarism assumes consequentialism and admits limited concern for equity weights because the maximisation of health is seen as the end result, whereas the capability approach is more concerned about equity and distribution.
It can be seen that the extra-welfarist approach is heavily influenced by the capability approach in two aspects; the importance of functionings and the use of preferences other than that of the individual which allows equity to an extent.
Should the capability approach be applied in health economics?
There are different schools of thought about the application of the capability approach in health economics in decision making. Looking at articles by Robeyns(2003,2005,2006), Coast et al(2008), Anand (2003,2005),Berges(2005),Mooney(2005),Richardson and Mckie(2005), and a number of other researchers that have examined the implications of Sen’s capability approach within health economics – arguments of most scholars relate to the fundamental ethical deficiency in the welfare economics which Sen pointed out, indicating that there is need for consultations beyond the individual. He also indicated that health maximisation as the sole outcome for the extra-welfarist approach was also inappropriate, and Coast et al (2008) argued that the welfarist approach is becoming inappropriate as a number of health interventions result in other outcomes than health. From the above statements it can be seen that the difference is in the evaluative space provided by the capability approach. The nature of this indefinitive list is a problem which is seen differently in the capabilities literature as Robeyns (2003), commented that the method of developing a capability lists is based on philosophy and views of the researcher followed by public debate of the lists, hence selection of a set of list is prone to the danger of bias. When asked if the capability approach be applied in health economics the response of a group of economists, Coast et al (2008) was (cautious) ‘yes’, and they gave two reasons, the first being that it provides a richer evaluative space allowing better evaluation of interventions and the second reason being that there are theoretical and practical applications which will require adaptation into the health economics context. This adaptation will involve selecting a definitive list of capabilities to be used in all contexts within the health sector in all communities and not actually in the perspective of the community as this will always give varied results. The capability approach is multidisciplinary and a designed for the health sector will be appropriate.
Even with Sen’s inability to give a definitive list it can be seen that the capability approach attempts to move social choice by focusing on the real aspects of life one of which is health, for example the use of life expectancy in HDI.
Discussions so far indicate the choice of using the capability approach is based on normative judgement. As MucCulloch (1998) argued should we allow health choices to happen or debate the choices, which agrees with Sen’s stance about a democratic process but to able to reach a decision there is the need for an economic evaluation. The welfare economics use cost benefit analysis (CBA) which value interventions that affects the rich. The extra-welfarist (at times referred to as a version of the capability approach) use the cost-effective analysis. The capability approach is still new and much of the measurement is qualitative. Presently values are based on the average population value.
Policy implications
How do we know that resource allocation in health care is being allocated in terms of equity and/or efficiency? The World Bank report on World Bank Development Report indicated a number of inequities in health care systems worldwide where funds were allocated to interventions for low cost effectiveness procedures for wealthy individuals in urban areas compared to cost-effective interventions not made available in poor rural regions (World Bank, 1993).
So therefore the question is, whose responsibility is it to provide this package so that health care should be made available to everyone regardless of willingness-to-pay (WTP).In the literature particular attention has be made on issues relating to equity and ethics.
Many scholars choose the maximisation of health as the main objective in health policy reforms, but because of all the problems associated with this view in relation to ethics, this is seen as controversial. It has been noted that quality adjusted life year (QALY) and disability adjusted life year (DALY) methods which the maximisation approaches use in allocation of resources cannot take into equity issue into consideration as it relates to distribution. With the limitations of the welfare and extra-welfarist approach means there is need to develop another framework for resource allocation and for making health policy. The capability approach was developed to emphasise the need for assessing inequalities and evaluating health in a broader context, but its inability to provide a detailed list created a problem which brings about the need for procedural principles which will include a joint scientific and deliberative approach to create an acceptable list.
In making decisions some scholars have endorse Nussbaum list over Sen’s approach based on the reasoning, that since there is no list how can it be applied because policy makers will need to know which capabilities to use but if the ICECAP by Coast et al is anything to go by it can be seen that the approach can be applied, though more research is still required.
Conclusion
Policy makers make decisions and take actions that have a profound impact on the distribution of health within the society. In trying to achieve equity in the distribution of health there has been the adoption of different economic frameworks from the welfarists to extra-welfarists and finally the capability approach. However, it can be seen that all the models have their limitations and health economists are divided over which framework is best.
From our discussions it can be seen that even with its limitations the capability approach has been very successfully in capturing equity which has been a major problem with policy making.
Therefore more research is required in the area of defining and selecting a list of definite capabilities.
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