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Balancing health and financial protection in health benefit package design

Katherine T. Lofgren, David A. Watkins, Solomon T. Memirie, Joshua A. Salomon and Stéphane Verguet

Health Economics, 2021, vol. 30, issue 12, 3236-3247

Abstract: Policymakers face difficult choices over which health interventions to publicly finance. We developed an approach to health benefits package design that accommodates explicit tradeoffs between improvements in health and provision of financial risk protection (FRP). We designed a mathematical optimization model to balance gains in health and FRP across candidate interventions when publicly financed. The optimal subset of interventions selected for inclusion was determined with bi‐criterion integer programming conditional on a budget constraint. The optimal set of interventions to publicly finance in a health benefits package varied according to whether the objective for optimization was population health benefits or FRP. When both objectives were considered jointly, the resulting optimal essential benefits package depended on the weights placed on the two objectives. In the Sustainable Development Goals era, smart spending toward universal health coverage is essential. Mathematical optimization provides a quantitative framework for policymakers to design health policies and select interventions that jointly prioritize multiple objectives with explicit financial constraints.

Date: 2021
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