A major policy focus in moving toward UHC (Universal Health Coverage) has been on the key policy question: what services should be made available and under what conditions? And health benefits packages (HBPs) are an answer to this question as they refer to explicitly defined services that can be feasibly financed and provided under the actual circumstances in which a given country finds itself.5
Costinghealth benefits packagesrarely awakens passions in thoseapplying,studyingorpromotingit.Nobody doubts it isimportant,but it is often seen as the work of accountants, not policy makers. The talkmostly focuses onhow to determine unit costs and frequencies and how to project these variablesin the future.
But costing is so much morethan knowing thetotalcostofaset ofprioritized services.When making the right questions it becomes a powerful tool on the road towardsuniversal health coverage (UHC)that is, in ensuring that all people can access the health services they need.One of these key questions is how muchmoreresources will we need to adopt theHBPand the advised costing expert will righteously say:“this will depend on where you arenowregarding the coverage level of the prioritized services and where youwant to goin the short, medium and long term”.
Indeed, policy makers are often not very keen in knowing thetotalcost of a HBP (unless there is a clear separation of the financing and delivery function) for two reasons. First, it is illusory to think that health systems will reallocate their total budgets to the HBP.Most LMICstruggle with tight budgetssodivertingresources by disinvestment in currently provided services will not be politically feasible. Second, no country starts from scratch and,more often than not, countries already do provide some coverage for most of the health services included in the newly designed HBPs and they already use part of their resources to that end.
Infinite needs, finite resources
The question then is not so much how much it would cost them to provide a certain HBP but ratherhow much moremoney they would have to mobilize to close the coveragegap. Now, when answeringthatquestion, the evidence of currently low coverage levels pops up and becomes itself an important political instrument to promote HBPs as a tool to providereal accessto the most important services needed by a population (as opposed to an aspirational wish list put on a paper).
The usefulness of costing the gap has become more evident to us in a recent IDB project by Criteria Network meant to design and cost a HBP for Honduras. Using cost-effectiveness, equity and financial protection criteria, we identified and ranked 74 priority health interventions. Then we calculated intervention unit costs “bottom-up” using normative assumptions about all required inputs (personnel, drugs, exams, etc.), and projected the population in need for each intervention using various sources, such as the Global Burden of Disease 2017. To answer how much more do we need we had to estimate current coverage levels for each intervention using utilization data reported by health centers and hospitals, and present policy scenarios on how to increase them. For example, only 35% of children under 5 with acute lower respiratory infections have coverage.
The 44 dollars gap
Theper capitacost ofthe HBPincluding the 74prioritizedhealth interventionsunder current coverage levels, was estimatedat$29 USDannually.If assuming effective100% coverage,the same package would cost approximately$73 USD. Hence,if the countrywants toguarantee to everyone the 74 most essential health interventions,theywillneedan additional spending ofroughly$44 USD per person,an amount that accounts to over 50% the currenthealth budgetMobilizing these additional resourcesin one or even twoyears’ timeisnot realistic.It is equally unlikely thatany country willstopprovidingmostnon-prioritized servicestore-allocate resources towardsthe designed HBP.A more realistic aspiration would be to allocate everyhealthbudgetadditiontoensure a progressive expansion of coverage ofthe 74 prioritised interventions,toreach a70%coverage in 4 years’ time.Alternatively, the HBP could be first offered to the most vulnerable population groups and then be gradually scaled up to the rest of the country. Also, where feasible, the government could also progressively remove some ineffective programs andredirect those resources towards the most cost-effective and equity-enhancing interventions.
Do you want to know more about estimating health costs? Reserve a spot in our next webinar (in Spanish). Register hereOther benefits of the costing exercise
Theusefulnessof the costing exerciseisnot limited tothe determination of the total cost of a HBP and calculatingthecost of thecoverage.The analysis of utilization and prices datathat was necessary to define the unit cost of health care interventions included in the HBP,rose questions on important issues, such as the staff mix required to achieve UHC or which specific drugs could be acquired at better pricesor through better procurement mechanisms. This means thatcosting hasalsothe potential to highlight some of the current inefficiencies in the health system, information that policymakers can use to make the necessary adjustments and release resources that could be used to increase the level of coverage.
Designing a HBP is a multistep process, in which all steps are interdependent. The costing of the prioritised health interventions is not the exception. For a HBP to potentially have a real and direct influence on resource allocation, costing is a key building block, not only to estimate the resources required but also to understand the current coverageof the prioritized health interventionsand different trajectories of eventually reaching effective coverage and their cost. This is particularly relevant inlow- and middle-incomecountries, where the coverage gap for most basic and low-cost health interventions can be considerably high and HBP design is often more about scaling up the current level of health service coverage than of adding new services.
Costing is a key building block of explicit priority setting and HBP design and it is a much more powerful tool than what most, policymakers and analysts alike, might think.