Most countries face high demands on their health care systems and have limited resources with which to meet them. Priority setting seeks to address these problems by proposing rules to decide which groups of patients or disease areas should secure favoured access to limited health care resources. The economic approach towards priority setting, particularly in the form of cost-effectiveness analysis, is commonly advocated. However, despite many decades of refinement of the technical and methodological issues arising from the use of economic evaluation in priority setting, decision makers continue to diverge frequently from the principles of economic evaluation. Our approach in this paper is to highlight the potential contribution of models of political economy to understanding what constitutes rational behaviour when agents operate within political and institutional constraints. We argue that there may be potentially greater benefits to be gained from exploration and analysis of priority setting using models based on concepts such as median voter and competing interest groups, than from further efforts to refine the techniques of economic evaluation.

Uniform, risk-independent insurance premiums are accepted as part of ‘managed competition’ in health care. However, they are not compatible with optimality of health insurance contracts in the presence of both ex ante and ex post moral hazard. They have adverse effects on insurer behaviour even if risk adjustment is taken into account. Risk-based premiums combined with means-tested, tax-financed transfers are advocated as an alternative.

This paper seeks to test 12 conjectures about the predicted use of deliberative processes by applying them to the technology assessment procedures used by the National Institute for Health and Clinical Excellence (NICE) in England and Wales. A deliberative process is one that elicits and combines evidence of different kinds and from different sources in order to develop guidance – in the present case, guidance for a health care system. A deliberative process entails the integration of three kinds of evidence: scientific context-free evidence about the general clinical potential of a technology, scientific context-sensitive evidence about particular evidence in realistic scenarios, and colloquial evidence to fit context-free scientific evidence into a context and to supply the best evidence short of scientific evidence to fill in any relevant gaps. It is shown that NICE's appraisals procedures and, in particular, its approach to cost effectiveness, entail both the weighing of each of these types of evidence and can be seen as rational responses to the 12 conjectures.

Over the past quarter century or so there has been, in Peter Hall’s formulation (Hall, 1993), a paradigm shift in macro-economic policy making: a movement from a Keynesian mode of policy making towards one based on monetary theory. The latter was open to a variety of interpretations and has been modified in practice. However, there was clearly a transformation in the way we think about economic policy making. Is the same true of social policy? Has there been an equivalent paradigm shift in the way we think about social policy? The two books under review provide an opportunity for addressing this question.

What Works in Tackling Health Inequalities? Pathways, Policies and Practice through the Lifecourse S. Asthana and J. Halliday Bristol: Policy, Press, 2006

Health Action Zones: Partnerships for Health Equity M. Barnes, L. Bauld, M. Benzeval, K. Judge, M. Mackenzie, H. Sullivan Abingdon: Routledge, 2005

Health Inequality: An Introduction to Theories, Concepts and Methods M. Bartley Cambridge: Polity, 2004

Status Syndrome: How your Social Standing Directly Affects your Health and Life Expectancy M. Marmot London: Bloomsbury, 2004

These four texts on health inequalities are all very different books written by leading commentators with different academic backgrounds. This review will concentrate on the policy perspective that may be of most interest to many readers of this journal. It is also arguably the Achilles heel of the health inequalities literature. According to policy makers, much current research on health inequalities was of little use to policy making, and public health researchers have been criticized for political naivety, for lacking understanding of how policy is made, and for having unrealistic expectations (Petticrew et al., 2004: 815–816). Similarly, Klein (2003) points to the problems of ‘making policy in a fog’. The first two texts under review focus on policy and are written by policy analysts.