Welfarism, extra-welfarism and capability: the spread of ideas in health economics

Abstract

This paper explores the spread of ideas within health economics, in relation to the impact of the capability approach to date and the extent to which it might impact in the future. The paper uses UK decision making to illustrate this spread of ideas. Within health economics, Culyer used the capability approach in developing the extra-welfarist perspective (where health status directly influences which social state is preferred). It is not a direct application of capability as the evaluation's focus remains narrow; the concern is with functioning, and maximisation is retained. Culyer's work provided a theoretical basis for using quality-adjusted life-years in decision making and this perspective is accepted as the basis for evaluation by the UK National Institute of Health and Clinical Excellence (NICE). To the extent that extra-welfarism represents a capability approach, capabilities influence NICE's decision making and hence UK health care provision. This paper explores the extent to which extra-welfarism draws on the capability approach; the spread of extra-welfarist ideas; and recent interest in more direct applications of the capability approach.