Priority setting by itself (determination of priority areas) is a structured process to analyze in a standardized fashion all the important factors, alternatives, and problems in a given situation, and order them by preferences based on a set of criteria. The results are a priority list.

Why determine priority areas?
Most of us have desires that outstrip our available income, and we have to make choices between them, which sometimes isn't an easy process. Such a discrepancy between finite limited resources and varied needs is typical not just in personal life. Organizations and society need to address these areas since available resources are always finite and scarce in comparison to the uses an organization or society has for them. It is important to recognize that scarcity of resources isn't confined just to organizations experiencing financial difficulties or developing countries, but as a concept is equally applicable to wealthy countries and organizations. Even when resources are plentiful, they are often not enough to meet all needs and demands, and decisions as to which needs are most important and need to be met, and which will be left unmet are still necessary. This is known as prioritizing.

All of the above mentioned is true for the health sector in dealing with the mismatch between finite resources and infinite health care needs and demands. Moreover, due to changes taking place in the epidemiological profiles of populations, financing and organization of the health system, the new development of science and technology has increased the need for prioritizing. Indeed, a lot of countries in the world (and Armenia isn't an exception) are experiencing population aging, which is a serious factor increasing the burden on health services. Older people are sicker and the services they need are more numerous and expensive. Second, the increase in the level of education of the population leads to an increase in their perceived needs and health care demands. The development of science and fast adoption of new technologies increase the cost of health care (new drugs and techniques are often costly). At the same time resources are shrinking or not growing fast enough, and in many countries in the world government spending is under greater scrutiny than before. Most low and middle-income countries have reduced their public spending per-capita on health.

Hence, priority setting is one of the most serious questions that must be addressed by health system planners. (remember the definition of planning we have discussed in Class 1 describing it as "a continuous process which involves decisions, or choices, about alternative ways of using available limited resources with the aim of achieving particular goals and objectives at some time in the future in an efficient manner").

Now when we have an idea about what is priority setting and why it should be carried out by planners, let's discuss a very important issue related to how priorities should be set.

Approaches used in priority setting
As mentioned before, any realistic planning system must ensure that the priorities set are feasible within the context of available resources and the existing social and political climate. To achieve these needs, clear criteria for the selection of the priority problems are needed.

It is important to keep in mind that the way priorities are chosen in a health system highly depends on who is setting them (who determines the needs) as well as on how priority setting players define health, etc.

There are four main approaches used in priority setting:
A) Epidemiological approach
B) Economic approach
C) Community approach
D) Primary Health Care (PHC) approach

Let's discuss all these approaches in more detail.
A) Epidemiological approach
This approach is based on disease-emphasis - priorities are set according to which diseases are most prevalent and carry the greatest mortality/morbidity burden.

Advantages: Criteria are clearly set. Common framework is understood by many. Needed data are often available.

Disadvantages: This approach is based on the medical not holistic model of health; it puts priority setting in the hands of health professionals, and doesn't recognize community- perceived needs. Available morbidity and mortality data are not always accurate and are often biased.

B) Economic approach
This approach is based on cost-emphasis - priorities are set according to the cost-effectiveness of various interventions. Later in this class we will discuss questions related to cost-effectiveness in detail. For now let's say that cost-effectiveness analysis looks at the effectiveness of health-service output in terms of health status (so, looks at outcome) not just at monetary cost.

Advantages:
Allows choosing those interventions, which result in the most outcome for the input ("Get the most bang for your buck"). With the use of composite indicators it is possible now to compare cost- effectiveness of interventions with different outcome measures.

Disadvantages:
It is based on expert opinion, ignoring concerns of the community; tradeoff between cost-effectiveness and equity.

C) Community approach
It is based on the "community emphasis"- priorities are set according to the perceived needs of the community members.

Advantages:
Based on the perceived needs of the community it is more likely to receive the community support.

Disadvantages:
Information on perceived needs is difficult to obtain. As perceived needs may differ from actual needs.

D) Primary Health Care (PHC) approach
Priorities are set according to 5 main principles of PHC: equity, health promotion and disease prevention, community participation, appropriate technology, and multi-sectoral involvement.

Advantages:
This approach is based on a holistic view of health; it recognizes the role of other sectors in the health of a population, and involves the community.

Disadvantages:
Very difficult to do in real life.