The Hidden Beauty Of Calculating Health Costs

What health services should be available and under what conditions? This is a key question for all countries that want to move towards UHC (universal health coverage). And health benefit packages (HBPs) are an answer to this question, since they refer to an explicit definition of the services that can be financed and delivered in the real circumstances in which a given country finds itself.

Calculating the cost of health benefit packages (HBP) rarely arouses passions in those who request, study or promote it. No one doubts that it is important, but it is often seen as the work of accountants, not policy makers. Discussions often focus on how to determine unit costs and frequencies and how to project these variables into the future.

But calculating the total cost is much more than knowing the total cost of a set of prioritized services . When asked the right questions, it becomes a powerful tool on the path to universal health coverage (UHC), that is, in ensuring that all people can access the health services they need. One of these key questions is how many more resources will we need to adopt PBS and the advised cost expert will say, “This will depend on where you are now with regard to the level of coverage of prioritized services and where the short, medium and short term want to go. long term”.

In fact, policy makers are often not very interested in knowing the total cost of a PBS (unless there is a clear separation between the financing function and the service delivery function) for two reasons. First, it is an illusion to think that health systems will reallocate their total budgets exclusively to financing their PBS. Most low- and middle-income countries have tight budgets, and diverting resources by divesting from services currently provided will not be politically feasible. Second, no country starts from scratch and, in most cases, countries already provide some coverage for most of the health services that are defined when designing a new PBS and already allocate part of their resources to finance them.

Infinite needs, finite resources  

The question is not so much how much it would cost them to provide a certain PBS, but how much more money they would have to mobilize to close the coverage gap. Now, when answering that question, the evidence of the current low levels of coverage emerges and this becomes an important political instrument to promote the PBS as a tool to provide real access to the most important services that a population needs (as opposed to to an aspirational wish list) put on paper.

The usefulness of calculating the cost of the gap has become more apparent to us in an IDB Criteria Network project to design and cost a PBS for Honduras. Using criteria of profitability, equity, and financial protection, we identified and ranked 74 priority health interventions. We then calculate the unit costs of intervention “from the bottom up” by estimating the required inputs (staff, drugs, examinations, etc.), and we project the population that needs each intervention using various sources, such as the Global Burden of Disease 2017. To estimate how much more resources are required, 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 the age of 5 with acute lower respiratory infections are covered.