This paper debates some of the issues involved in attempting to apply economic analysis to the health care sector when medical ethics plays such an important part in determining the allocation of resources in that sector. Two distinct ethical positions are highlighted as being fundamental to the understanding of resource allocation in this sector -- deontological and utilitarian theories of ethics. It is argued that medical ethics are often narrowly conceived in that there is a tendency for the individual, rather than society at large, to form the focal point of the production of the service "health care'. Thus medical ethics have been dominated by individualistic ethical coded which do not fully consider questions relating to resource allocation at a social level. It is further argued that the structure of the health care sector augments these "individualistic' ethics. It is also suggested that different actors in the health care sector address questions of resource allocation with respect to different time periods, and that this serves to further enhance the influence of "individualistic' ethical codes in this sector.
KIE: Central to McGuire's discussion of the role that medical ethics plays in the allocation of health care resources is the utilitarian ideal of economic efficiency, which is defined as the maximization of benefits to society. Medical ethics, on the other hand, is seen as deontological in character, based on duty and virtue and focused on the welfare of the individual. Moreover, the structure of the health care sector, which is dominated by multilateral relationships and short-run allocation decisions, reinforces these individualistic tendencies. McGuire suggests that greater efficiency could be achieved by shifting the emphasis of medical ethics toward more concern for social welfare, or by restricting its use to short-run allocation decisions after long-run decisions based on economic appraisal have been made by legislators and administrators.