Choosing services Integrating Concerns for Cost-Effectiveness, Financial Protection, and the Worse Off Ole F. Norheim Professor in Medical Ethics and Philosophy of Science Dept. of Global Public Health and Primary Care University of Bergen

Plan •Background •Cost-effectiveness •Financial protection •Priority to the worse off •Classification of priority health services

Key question •Should financial protection and distributional concerns be incorporated into decision rules for publicly financed health services?

Priority group classification •Universal Coverage can be defined as access to key health services for all at an affordable cost 1.High-priority services 2.Normal-priority services 3.Low-priority services Key services

How to classify services? •Cost-effectiveness thresholds < 1 GDP per capita 1-2 GDP per capita > 3 GDP per capita (Macroeconomics and Health 2002, WHO CHOICE)

Example •Selected 65 health services from WHO- CHOICE database (AfrE) •Child health services •Maternal and newborn health services •Infectious disease services •Non-communicable disease services •Converted all costs to Int $ 2005 (WHO-CHOICE team BMJ series )

Two problems with CEA •Ignores financial risk protection •Ignores distribution of healthy life years

Financial risk protection •Publicly financed health services provide –Financial risk protection –Health •Peter Smith : –If no one buys supplementary services, or –a well-functioning voluntary supplementary insurance market  service selection on the basis of standard cost-effectiveness ratios will maximize welfare (health + income) (P. Smith, Health Economics 2012) •When there is substantial out-of-pocket payment for supplementary services, this is not so.

•High cost services may be favored over low cost services, at least among services with similar cost-effectiveness ratios. •My interpretation: –Financial risk protection could act at least as a tiebreaker for services with identical cost- effectiveness ratios.

Two problems with CEA •Ignores financial risk protection •Ignores distribution of healthy life years

Integrating distributive concerns with CEA •An “Atkinson’s” social welfare function applied to health would judge: –(60, 45) as better than (80, 25) (Adler, OUP 2012) •Health prioritarianism would assign higher weights to benefits for B (Ottersen, JME 2013)

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Opportunity cost of implementing top 5 interventions for 5 mill $ DALYs41190 DALYs = 1558 DALYs

Opportunity cost •Health prioritarianism •Knows the cost in terms of DALYs NOT averted •Can provide reasons for re-ranking: –some priority to the worse off

Priority group classification – tentative proposal

Ex ante / ex post prioritarianism •Distributive weights based on final – not expected – individual disease burden for various conditions

Imagine you can help group A or B – who would you help?

Ex post: Even if we only know the outcome, but not who will be affected, we can evaluate alternative outcomes