HEALTH ECONOMICS Health Econ. 11: 537–549 (2002) Published online 9 August 2002 in Wiley InterScience (www.interscience.wiley.com). DOI:10.1002/hec.752 ECONOMETRICS AND HEALTH ECONOMICS Vertical and horizontal aspects of socio-economic inequity in general practitioner contacts in Scotland Matthew Sutton* Department of General Practice, University of Glasgow, UK Summary Health status varies across socio-economic groups and health status is generally assumed to predict health care needs. Therefore the need for health care varies across socio-economic groups, and studies of equity in the distribution of health care between socio-economic groups must compare levels of utilisation with levels of need. Economic studies of equity in health care generally assume that health care needs can be derived from the current health–health care relationship. They therefore do not consider whether the current health–health care relationship is (vertically) equitable and the focus is restricted to horizontal inequity. This paper proposes a framework for incorporating the implications of vertical inequity for the socio-economic distribution of health care. An alternative to the current health–health care relationship is proposed using a restriction on the health-elasticity of health care. The health-elasticity of general practitioner contacts in Scotland is found to be generally negative, but positive at low levels of health status. Pro-rich estimates of horizontal inequity and vertical inequity are obtained but neither is statistically significant. Further analysis demonstrates that the magnitude of vertical inequity in health care may be larger than horizontal inequity. Copyright # 2002 John Wiley & Sons, Ltd. Keywords socio-economic inequity; general practitioner contacts Introduction Equity in health care delivery is a fundamental principle of many health care systems. It must be a measurable construct if there is to be a meaningful debate about whether, for example, health care reforms have affected equity or whether structural factors can explain international differences in the equity of health care systems. There has been much debate about whether equity in health care refers to equity of use, access or the contribution of this intermediate good to equity in health [1,2]. Nevertheless, much of the empirical work on equity has concentrated on the use of health care, and equity across income groups has represented a particular focus because of its importance in determining ability to pay. The conceptual literature on equity in health care distinguishes between vertical and horizontal equity. Vertical equity is the unequal, but equi- table, treatment of individuals in unequal levels of need [3]. Horizontal equity is the equal treatment of individuals in equal levels of need. However, separation of these dimensions is difficult empiri- cally as the need for health care is a notoriously difficult concept to define [4–6], let alone measure. Because analysis of vertical inequity is problematic the economic literature, such as Wagstaff et al.’s [7] work and subsequent international [8] and tem- poral [9,10] comparisons of equity in health care systems, have concentrated on horizontal inequity. Copyright # 2002 John Wiley & Sons, Ltd. Received 15 October 2001 Accepted 5 June 2002 *Correspondence to: Department of General Practice, University of Glasgow, 4 Lancaster Crescent, Glasgow G12 0RR, Scotland, UK. Tel.: +44(0) 141 211 1666; fax: +44(0) 141 211 1667; e-mail: m.sutton@udcf.gla.ac.uk