Search almost any hospital’s website, insurer’s annual report or health ministry’s strategy and you will find a commitment to health equity. It usually sits near the top, in confident language, next to a photograph of a diverse group of smiling staff.
Now ask a different question: which line of the budget would be smaller if that commitment disappeared tomorrow?
In many organisations, the honest answer is none. Equity is a value, a committee and perhaps a small team. It is not a claim on money that would otherwise go somewhere else. And an aim that costs nothing to hold tends to change nothing when it meets a budget meeting.
The thesis of this piece: health equity becomes real only when it forces a trade-off, a decision to spend more on one group than the ordinary rules of the system would, and therefore less on something else. Organisations that avoid naming that trade-off are not pursuing equity. They are describing it.
Why the default budget drifts away from equity
It is worth understanding why good intentions lose to budgets so reliably. Most health system money follows activity or history.
Activity-based payment pays for services delivered. Groups that already use services more, because they have time off work, transport, confidence with institutions or fewer language barriers, generate more activity and attract more money. Groups with the greatest unmet need often generate the least activity, precisely because the need is unmet.
Historical budgets have the same bias in a different form. A department’s allocation this year is usually last year’s plus inflation. Services that grew up where demand was loudest keep their share. Services that were never built in underserved areas have no baseline to grow from.
Neither mechanism is designed to be unfair. Both, left alone, move resources toward people who are already better served. That is why equity cannot just be an attitude layered on top of the ordinary budget. It has to be a deliberate correction to it.
One system’s attempt to make it concrete
NHS England’s Core20PLUS5 approach is an instructive example of turning a broad aim into something specific. It asks systems to focus on three things. The Core20 is the most deprived 20 percent of the national population, identified using the Index of Multiple Deprivation. The PLUS groups are populations defined locally by integrated care systems as facing particular inequalities. The 5 is a set of clinical areas chosen for accelerated improvement: maternity, severe mental illness, chronic respiratory disease, early cancer diagnosis and hypertension case-finding.
The strength of the approach is that it names who and what. A strategy that says “reduce inequalities” can be satisfied by almost anything. A strategy that says “improve early cancer diagnosis in the most deprived fifth of the population” can be measured and resourced.
The test, as with any framework, is whether it shapes the money. Independent evaluators, including the Strategy Unit, have been examining NHS England’s national approach to healthcare inequalities. For other systems looking on, the lesson is less about the framework itself and more about the discipline it models: a defined population, a short list of conditions, and a gap that can be tracked.
The uncomfortable arithmetic
Here is the part most equity strategies avoid. In a fixed budget, spending more per person on one group means spending relatively less on another. Extending clinic hours in a deprived area, paying for outreach workers, funding interpreters or longer appointments: every one of those costs money that the ordinary formula would have sent elsewhere.
Those elsewhere places have voices. Departments that lose relative share will argue, often correctly, that their own patients have needs too. Clinicians in well-served areas may experience equity spending as a cut. Politicians hear from the constituents who already use services most, because those constituents are also the ones who complain effectively.
This is why equity budgets are so often small, temporary and funded by special grants rather than core allocations. A grant avoids the fight. It also guarantees that the equity work ends when the grant does.
From statement to line item
Organisations that want equity to survive budget season can take a few practical steps.
- Weight the allocation formula. Adjust core budgets for deprivation and unmet need, not just population and past activity. This is where equity becomes structural rather than project-based.
- Create a named, protected line. A specific budget line for equity-targeted services, reported separately, is harder to trim quietly than a vague commitment spread across departments.
- Measure the gap, not the effort. Track outcome differences between the most and least deprived groups on a few conditions. Counting equity events or trainings shows activity, not progress.
- Tie it to leaders’ objectives. If no executive’s performance review mentions the gap, the gap will not be a priority.
- Say what you are not funding. A credible equity budget acknowledges what was deprioritised to pay for it. If nothing was, it probably is not changing anything.
A worked example: two neighbourhoods, one budget
Abstractions make this too easy to nod along to, so take a simplified case. The numbers are illustrative, not drawn from any real system.
A health board funds diabetes care for two neighbourhoods of equal size. Neighbourhood A is affluent. Neighbourhood B is among the most deprived in the region and has roughly twice the rate of type 2 diabetes. Under an activity-based model, money follows attended appointments. Residents of A attend their reviews reliably. Residents of B miss more of them: shift work, no car, a clinic two bus rides away, a letter written in a language the household does not read.
The result is predictable. A generates more appointments, so A’s clinic earns more, so A’s clinic can afford a specialist nurse and longer slots. B’s clinic, with the sicker population, earns less and runs thinner. Each year the formula faithfully rewards the neighbourhood that needed the service less. Nobody in the finance team made a decision to disadvantage B. The formula made it for them.
Now apply an equity correction. The board weights B’s allocation for prevalence and deprivation, and funds an outreach worker and evening clinics there. The total budget has not grown, so A’s clinic gets a smaller uplift than it expected. A’s clinicians will point out, fairly, that their patients have diabetes too and that their waiting list will lengthen. That complaint is not a sign the policy failed. It is the sign the policy exists.
The test of success is also different. The board should not judge the change by how many outreach contacts were made in B. It should judge it by whether the gap in outcomes that matter, such as blood glucose control, amputations or emergency admissions for diabetic complications, narrows between A and B over several years. If the gap does not move, the money was spent on activity rather than equity.
Why equity keeps losing the argument
It helps to be honest about the incentives of each person in the budget meeting.
Finance directors are rewarded for balancing the books this year. Equity investments often pay back slowly, in avoided admissions years from now, and sometimes in other organisations’ budgets. A finance director who funds them takes a certain cost today for an uncertain saving that may appear on someone else’s ledger.
Clinical leaders are rewarded for performance on the targets they are given, usually waiting times and activity. If none of those targets is measured by deprivation group, moving resources towards the hardest-to-reach patients can make a department’s headline numbers look worse, because harder cases take longer.
Boards and politicians respond to the people who contact them. Those people skew towards the already well served, who have the time, confidence and connections to complain. The communities with the greatest unmet need are, almost by definition, the ones least likely to show up at a public consultation.
None of these actors is acting in bad faith. That is the point. The system will drift away from equity when everyone behaves reasonably, so the correction has to be built into the rules rather than left to goodwill.
The strongest objections, taken seriously
A serious equity budget faces serious objections, and it is better to answer them than to pretend they do not exist.
The first is efficiency. Reaching underserved groups often costs more per person. An outreach programme that finds ten undiagnosed hypertensive patients in a deprived area may cost more per case than a pharmacy screening scheme in a busy town centre. If the goal were to maximise the number of cases found per pound, the equity programme might lose. The answer is that health systems do not, and should not, have a single goal. Most explicitly include fairness among their aims. But this is a genuine trade-off, and organisations should say so rather than claim equity spending is always the cheapest option.
The second is targeting. Area-based measures such as deprivation indices are blunt. Plenty of poor people live in affluent postcodes, and plenty of comfortable people live in deprived ones. Targeting by area will miss some people and include others. The practical response is to use area targeting for the bulk of allocation, because it is measurable and hard to game, and to layer on locally defined groups, which is what the PLUS element of Core20PLUS5 attempts.
The third is dependency on data that the underserved are least likely to appear in. If a group rarely uses services, its needs are underrecorded, and a needs-weighted formula built on recorded prevalence will underweight it. Equity budgets therefore need some investment in finding need, not only in treating it.
The fourth is political durability. Equity lines are easy to cut in a hard year because the people who benefit are least able to defend them. That is the strongest argument for writing the weighting into the core allocation formula rather than running it as a separate project fund.
What each actor can do on Monday
For a finance director, the useful first step is a simple analysis: how does spending per head, and per unit of need, vary across your most and least deprived populations today? Many organisations have never run it, and the answer is often uncomfortable enough to start the conversation.
For a medical director, it is choosing two or three conditions where outcome gaps by deprivation can be measured, and reporting them to the board alongside waiting times, with the same prominence.
For a board, it is asking one question at every budget round: what did we stop funding, or fund less, so that this equity work could happen? If the answer is always nothing, the work is decorative.
For commissioners and ministries, it is recognising that providers cannot correct a biased formula on their own. If the national tariff or allocation method pays for activity, local equity efforts will always be swimming against it.
What to watch
The most telling signal over the next few years will be whether equity measures move from separate reports into the core performance frameworks that determine funding and leaders’ careers. Frameworks such as Core20PLUS5 provide the vocabulary. Whether they carry weight depends on whether missing an equity target ever costs anyone as much as missing a waiting-time target does. Until it does, organisations will rationally prioritise what they are judged on.
The takeaway
Health equity is not measured by the strength of an organisation’s statement. It is measured by the size of the budget line that would vanish without it, and by the gap it is closing. If you cannot point to either, the commitment is still a sentence.
In your organisation, where does health equity show up in the budget, if anywhere? And what was traded away to pay for it? Share your experience below.
