Designing a Health Benefit Package

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IN THE NAME OF GOD
Flagship Course on Health Sector Reform and
Sustainable Financing Module 4
Designing a Health Benefit Package

How to construct
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Kambiz Monazzam M.D July 2005
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• A BASIC PACKAGE OF HEALTH SERVICES

• How
• to
• Construct

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Information needed for prioritization

1. Many different types of information will need to
   be combined in order to adequately define a
   package of services
2. All of the different information that is required
   may not be readily available, but it may be
   possible to simplify the data requirements in
   practice

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Historical Context (1)

• Most dev. countries have been reluctant to accept
  the notion of prioritization in the health
  sector.
• Instead, they have attempted to offer all
  services, ranging from the simplest to the most
  complex.
• This approach has resulted in de facto rationing,
  through queues, shortages of inputs, and simply
  an inefficient and inequitable use of resources.

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Historical Context (2)

• The focus of this session will be on how to make
  the admittedly difficult choices that can avoid
  this problem

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Principles for Making Difficult Decisions in
Difficult Times

1. The financial resources for health limited.
2. Consider the financial costs of the treatments.
3. Limitation make it necessary to set priorities.
4. It isnt possible to cover every treatment
5. The goal is to maximize the health of the
   population served, subject to the available
   resources.
6. The priority a treatment should not depend on the
   patient who would receive that related to us
7. Determining the priority needs magnitudes of its
   benefits, harms, and costs

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Principles for Making Difficult Decisions in
Difficult Times

• Estimates of benefits, harms, and costs should be
  based on empirical evidence. when empirical
  evidence contradicts subjective judgments,
  empirical evidence should take priority.
• Before its use, a treatment should satisfy three
  criteria
• 1- There is convincing evidence it is
  effective in improving health outcomes
• 2- Its beneficial effects should outweigh
  any harmful effects on health outcomes
• 3- Compared to the next best alternative
  treatment, the treatment should represent a good
  use of resources and satisfies Principle 5
  above.
• Judgments should reflect the preferences of the
  individuals who will actually receive the
  treatments.

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• Approaches
• to
• prioritizing

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Different Approaches to Prioritizing

• Defining categories of care
• Using explicit criteria
• Using guidelines or technology assessment
• Using formulas or models

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Defining categories of care

• Leaving more specific decisions to both
  politicians and health professionals
• Its advantages are
• Flexibility
• It can minimize political resistance
• There are no explicit exclusions which can serve
  as a focal point for opposition
• Its disadvantages are
• not be able to achieve an efficient allocation of
  resources
• health professional incentives may not closely
  match with those of society as a whole.

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Using explicit criteria

• 1) the identification of community needs and
  preferences for defining a priority list of
  services -Oregon, USA ,
• 2) the criteria of effectiveness, efficiency, and
  necessity, and a determination of whether the
  service can be left to individual responsibility-
  Netherlands
• 3) the criteria that a health problem involves a
  large number of people, services are available
  and effective, and quantified targets can be set
  - UK

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The disadvantages

• difficult for the population to agree on what
  criteria
• Difficulties in measurement

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Using guidelines or technology assessment

• informing both patients and practitioners
• distinct advantage of clearly defining when a
  service may be technically beneficial or not
• does not include an economic component, nor does
  it incorporate community values or seek public
  opinion about social preferences.

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Using formulas or models

• Select the best mix of services
• based on assessments of the burden of disease and
  cost-effectiveness analysis to determine the best
  way to meet health objectives

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The advantages Disadvantages

• It explicitly considers efficiency, and can
  incorporate social preferences through the
  valuation of distinct health states or outcomes
• need for detailed (and often unavailable) data
  (both technical and social)

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Combine methods

• It may be possible to combine certain aspects of
  each into a more comprehensive approach to
  defining priorities and constructing a basic
  package of health services

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Quantifying Burden of Disease

• Measuring Mortality
• not the only measure of health status
• Measuring Morbidity
• depend on what data are available, and the
  relative weights of death for sickness
• Combined Measures of Morbidity and Mortality

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Combined Measures of Morbidity and Mortality

• The Disability Adjusted Life Year Approach (DALY)
• DALY approach includes discounting over time

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Main Criticisms of DALY

• 1. The DALY imposes social preferences that have
  not been validated
• 2. The age weights do not reflect common
  preferences among health specialists, economists
  and general population
• 3. The disability weights ignore the handicap
  attached to some permanent disabilities in
  different societies
• 4. DALYs are not applicable in countries with
  scarce health information
• 5. The exclusion of late fetal deaths is
  unjustifiable

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Population Behavior and Preferences

• Focusing on current utilization of services
• People may not necessarily seek the type of care
  that they should. This may result from lack of
  information, or perhaps a lack of supply of the
  type of care they should be seeking.
• ignore the question of unmet demand

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Population Behavior and Preferences

• Potential result of ignoring population behavior
  A package may be rejected politically if it does
  not correspond to societys values

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Health Interventions and Outcomes

• How effective a given health intervention may be
  depends on at least three factors
• the coverage rate
• the efficacy rate
• the compliance rate
• 1- Use of expert judgment
• 2- Multiple impacts of an intervention

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Think it over...
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• Cost
• prioritizing

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Horizontal rationing
High priority
Basic package of health services
Floating line determined by available resources
intervention 12
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vertical rationing
High priority
Basic package of health services
intervention 12
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diagonal rationing
High priority
Basic package of health services
intervention 12
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combined rationing
High priority
Basic package of health services
intervention 12
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Thanks for your kind attention