Guide Individual Decisions for Health (Routledge International Studies in Health Economics)

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Health improvements can prevent out-of-pocket payments downstream and can increase the income-earning potential of the beneficiaries. Because services included in the current package are much more cost-effective than the treatment for hepatitis B cirrhosis, one can prevent much more ill health by extending the former. One may therefore be able to offer greater financial risk protection by extending access to the existing package.

Considering all three principles, extending access to the existing package very likely has great advantages in terms of both population health and improving the lot of the socially or economically worse off. While it is a matter of judgment, these considerations seem to outweigh the especially large individual disease burden that one alleviates by adding treatment for hepatitis B cirrhosis.

On balance, there is therefore a stronger case for expanding access to the existing package. More generally, to move fairly towards UHC, a country should categorize services as high, medium, or low priority on the basis of the three principles. It should then start with measures that move it towards universal coverage for high-priority services before adding medium- or low-priority services to the package. By contrast, the treatment for hepatitis B can be properly classified as a medium or low-priority service, because its cost-effectiveness is very low and the comparatively large individual disease burden of hepatitis B is unlikely to provide a sufficiently strong countervailing consideration.

We emphasize, however, that countries should apply their own weight to these considerations. The general rule therefore recommends extending access to the existing package. Given the substantial interests at stake, the decision should be made through a fair priority-setting process. The health authorities should also clearly communicate the grounds for their decision to allow for accountability to the population, especially to those affected.

Case 2: Eliminate user fees for maternal services for the poorest or for everyone? A low-income country with high rates of maternal and under-five mortality currently charges considerable user fees for health services. Without raising new taxes, the government only has sufficient budget to abolish user fees for the poorest quintile. If user fees were to be eliminated for all, new revenue would have to be raised for the health system to remain financially sustainable.

A policy consensus has been reached that this new revenue would be raised through increasing the value added tax VAT ; to protect the poor, essential items such as food would be exempted from this tax increase. When faced with a choice between these policies, the first step should be an assessment of their expected impacts. The results of this assessment will vary by country. The following analysis draws on common country experiences.

If effectively implemented, eliminating user fees for the poorest quintile is likely to increase service utilization by members of the poorest quintile because it reduces their financial barriers to access. Some low-income countries have indeed had success in targeting the poorest for waivers of fees for services or insurance premiums. In countries where a majority of the population derives its income from the informal sector, it is hard to establish household income.

Other difficulties include non-uniform application of exemption criteria, verifying the identity of patients, and lack of information among users about who is eligible. Eliminating user fees for all while raising VAT avoids the drawbacks often associated with targeting and eliminates barriers to the use of some high-priority services for all.

It is therefore likely to lead to increased utilization across all income groups. In terms of health outcomes, pregnant women, mothers, and infants who fall severely ill or die due to lack of access to services are among the worse off.

Framing health and foreign policy: lessons for global health diplomacy

As argued above, eliminating user fees for all is likely to do more to increase service utilization among the poor and near-poor and thereby avert more of these large individual health burdens. In terms of economic status, because all income groups pay the same flat fee, the current system of substantial user fees makes the poor pay a larger proportion of their income for access to needed services. Among them, the payments remain disproportionately burdensome for the less well off. If the VAT is designed to exempt goods and services traded by the poor in the informal economy, eliminating user fees for all while raising VAT is likely to more fairly distribute the burden of paying for the health system.

Research indicates that in low-income countries, VAT can be implemented so that the better off generally pay a larger proportion of their incomes in VAT than the poor. Overall, eliminating user fees for all is likely to be best for the worse off in health and, if the VAT is well-designed, is reasonably likely to be best for the economically worse off, since it benefits more of the poor and near-poor.

Financing health systems through general taxation rather than user fees means that the cost of health care is spread across the population, rather than concentrated on those who need it. VAT is a predictable expenditure and, unlike large health expenditures, is unlikely to impoverish citizens who pay it. Financial risk protection therefore favors eliminating user fees for all. Considering all three principles, eliminating user fees for all is likely to be the fairest alternative.

First, it avoids the problem of identifying the poorest quintile for free access. Second, by improving access to all poor and near-poor, it promises greater health improvements and does more to help the worse off in health. Third, it improves financial risk protection for a wider class of poor and near-poor. In pursuing this strategy, governments should keep in mind common challenges in implementation. In particular, they should provide the resources to replace the loss in fee income and to meet the anticipated increase in demand.

Case 3: Who should decide which services are offered: the judiciary or a priority-setting institution? Disputes about what this right entails are commonly resolved through the judicial system. The Ministry of Health currently formulates a package of health interventions for which everyone is meant to be covered. It faces frequent legal challenges both from citizens who claim that they are not being provided with services to which the package entitles them and from citizens who claim that they should be provided with services not included in the package.

The country has a civil law system. Litigation cases take the form of claims made by individual persons and judgments normally apply only to the claimant. Recent years have seen a steep increase in the number of cases of right to health litigation. In a large majority of cases, the courts ruled in favor of the claimants. This has an impact on the level of health provision for other services.

This involves establishing an entity tasked with making decisions about a benefit package for all using a publicly accountable process and an explicit priority-setting mechanism based upon reasonable principles. A central task of the judiciary will then be to establish whether this process has been followed and this mechanism properly implemented—including whether individuals received services to which they are entitled as part of the agreed benefit package. In making this decision, the first step is an assessment of the expected impacts the two approaches to priority setting in health.

The following draws on common country experiences. Judicial decision-making has the drawback that courts are generally not well placed to systematically take account of cost-effectiveness. This reduces the funds available to provide proven, more cost-effective services. Priority setting by a dedicated institution can overcome these problems, if the institution is designed to draw on relevant expertise and can be insulated from undue pressures from interest groups.

Bringing a case to court can require significant financial resources. It also requires time and knowledge of the legal system.

Health Economics

Government and charity-provided legal support can substantially improve the ability of the poor to litigate but, in some countries, there are indications that the better off are more able to initiate litigation. Thus, judicial decision-making may exacerbate inequalities in access to health services.


Prioritizing the worse off also means giving additional weight to the interests of those who bear the greatest disease burden. However, the propensity of citizens to seek legal remedies varies with features of their situation that have little relation to their disease burden, such as income, social status and access to a lawyer.

Since citizens who do not bring cases will not have their interests heard, the results are opposed to equity, which requires equal consideration of cases with the same disease burden. Priority setting by a dedicated institution can avoid this inequity, if care is taken to institutionalize decision-making according to fair principles. Because litigation saves some successful claimants from very large health expenditures, judicial decision-making provides some citizens with financial risk protection. However, as noted, litigation is often for relatively cost-ineffective treatments.

Socioeconomic Disparities In Health: Pathways And Policies

Judicial decision-making has implications for accountability. While courts sometimes recognize the need to take into account the aforementioned three principles and other relevant principles , the process by which they do so is neither explicit nor systematic. Nor are they well-positioned to evaluate the impact of an isolated decision on the fairness of resource allocation in a health system. There is also no guarantee that relevantly similar cases will be treated similarly.

This thwarts accountability. Priority setting by a dedicated institution, in contrast, can enhance fairness and legitimacy by making coverage decisions through mechanisms that employ reasonable, public principles and that allow for like cases to be treated alike.

  • References!
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Priority setting by a dedicated institution—establishing an independent mechanism or body that sets priorities in an accountable and transparent manner, based on explicit, reasonable criteria—is morally preferable. The judiciary has important roles to play within this framework. First, to check that the priorities pursued by the health authorities are based on reasonable, non-discriminatory criteria which are consistently followed.

Second, to ensure that citizens are granted access to those health interventions to which they are entitled under the priority-setting framework. Such recourse to legal action is a crucial way in which marginalized groups can ensure that their interests are properly served. Countries can learn from the experience of nations that have managed these threats.

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It can also contribute to greater public awareness of the unavoidability of setting priorities. Because all governments face resource, institutional, and political constraints, moving towards UHC involves balancing competing interests. The progressive realization of the right to health requires that such trade-offs be made fairly. These principles include health benefit maximization, priority for the worse off, financial risk protection, and accountability.

He has published academic papers and policy reports dealing with the impact evaluation of health policies and programmes in developing, transition and developed countries, from both the methodological and applied points of view. He is currently performing research work on the topic of international comparisons of health systems performance, with a particular interest in financial risk protection and health system financing.

  1. The utilisation of health research in policy-making: concepts, examples and methods of assessment;
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  7. Rodrigo is very keen on using economic analysis as a tool to contribute to current policy debates; an example of this is his ongoing work on universal health coverage, a topic very much in the current agenda of national governments and international organisations. Rodrigo is looking to supervise PhD students in health economics and applied microeconometrics. I am broadly interested in all areas of economics of health, but especially the economics of "sin" behaviours such as alcohol, tobacco, drugs and gambling.

    Labour, Education and Health Economics

    I am also interested in the economics of food. I am currently involved in several different topics within the Sheffield Alcohol Research Group including work on alcohol dependence, local alcohol consumption estimates, joint modelling of tobacco and alcohol demand, and modelling of price policies. I am also more generally interested in wellbeing work, especially work combining this with "sin" behaviours. Previous work includes looking at the monetary cost of problem gambling on wellbeing.

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    I have also supervised an MSc dissertation looking at smoking and wellbeing. Jenny's research interests centre on applied microeconometrics, particularly the interaction of health and labour market outcomes, health-related behaviours, health valuation, the economics of well-being and travel behaviours. She is currently leading a large, innovative, EPSRC-funded project, ' Reflect : Experienced utility and travel behaviour, a feasibility study', which uses smartphones to gather real-time data on commuting experiences, and to feed this back to them in various ways. The ultimate aim is to influence travel behaviour by encouraging people to reflect on their experience and those of other people. Jenny is interested in supervising PhD students in applied microeconometrics, especially those with topics that are in line with the research interests described here. Combining a career in psychology and economics, Philip's research interests are in understanding behaviour, well-being, and decision-making through multidisciplinary approaches.