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Trading off health and financial protection benefits with multiobjective optimization

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  • Özlem Karsu
  • Alec Morton

Abstract

Countries which are introducing a system of Universal health coverage have to make a number of key tradeoffs, of which one is the tradeoff between the level of coverage and the degree to which patients are exposed to potentially catastrophic financial risk. In this study, we first present a way in which decision makers might be supported to focus on in a particular part of the tradeoff curve and ultimately choose an efficient solution. We then introduce some multiobjective optimization models for generating the tradeoff curves given data about potential treatment numbers, costs, and benefits. Using a dataset from Malawi, we demonstrate the approach and suggest a core index metric to make specific observations on the individual treatments. Moreover, as there has been some debate about the best way to measure financial exposure, we also investigate the extent to sensitivity of our results to the precise technical choice of financial exposure metric. Specifically, we consider two metrics, which are the total number of cases protected from catastrophic expenditure and a convex penalty function that penalizes out‐of‐pocket expenditures in an increasingly growing way, respectively.

Suggested Citation

  • Özlem Karsu & Alec Morton, 2021. "Trading off health and financial protection benefits with multiobjective optimization," Health Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 55-69, January.
  • Handle: RePEc:wly:hlthec:v:30:y:2021:i:1:p:55-69
    DOI: 10.1002/hec.4176
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    References listed on IDEAS

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    1. Morton, Alec & Arulselvan, Ashwin & Thomas, Ranjeeta, 2018. "Allocation rules for global donors," Journal of Health Economics, Elsevier, vol. 58(C), pages 67-75.
    2. Peter C. Smith, 2013. "Incorporating Financial Protection Into Decision Rules For Publicly Financed Healthcare Treatments," Health Economics, John Wiley & Sons, Ltd., vol. 22(2), pages 180-193, February.
    3. Peter C. Smith & Winnie Yip, 2016. "The economics of health system design," Oxford Review of Economic Policy, Oxford University Press, vol. 32(1), pages 21-40.
    4. Pekka Korhonen & Jyrki Wallenius & Stanley Zionts, 1984. "Solving the Discrete Multiple Criteria Problem using Convex Cones," Management Science, INFORMS, vol. 30(11), pages 1336-1345, November.
    5. Pieter van Baal & David Meltzer & Werner Brouwer, 2016. "Future Costs, Fixed Healthcare Budgets, and the Decision Rules of Cost‐Effectiveness Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 25(2), pages 237-248, February.
    6. Stéphane Verguet & Jane J. Kim & Dean T. Jamison, 2016. "Extended Cost-Effectiveness Analysis for Health Policy Assessment: A Tutorial," PharmacoEconomics, Springer, vol. 34(9), pages 913-923, September.
    7. Morton, Alec & Thomas, Ranjeeta & Smith, Peter C., 2016. "Decision rules for allocation of finances to health systems strengthening," Journal of Health Economics, Elsevier, vol. 49(C), pages 97-108.
    8. Morton, Alec & Thomas, Ranjeeta & Smith, Peter C., 2016. "Decision rules for allocation of finances to health systems strengthening," LSE Research Online Documents on Economics 101206, London School of Economics and Political Science, LSE Library.
    9. Morton, Alec & Arulselvan, Ashwin & Thomas, Ranjeeta, 2018. "Allocation rules for global donors," LSE Research Online Documents on Economics 101210, London School of Economics and Political Science, LSE Library.
    10. Hauck, K. & Morton, A. & Chalkidou, K. & Chi, Y-Ling & Culyer, A. & Levin, C. & Meacock, R. & Over, M. & Thomas, R. & Vassall, A. & Verguet, S. & Smith, P.C., 2019. "How can we evaluate the cost-effectiveness of health system strengthening? A typology and illustrations," Social Science & Medicine, Elsevier, vol. 220(C), pages 141-149.
    11. Stéphane Verguet & Ramanan Laxminarayan & Dean T. Jamison, 2015. "Universal Public Finance of Tuberculosis Treatment in India: An Extended Cost‐Effectiveness Analysis," Health Economics, John Wiley & Sons, Ltd., vol. 24(3), pages 318-332, March.
    12. Morton, Alec, 2014. "Aversion to health inequalities in healthcare prioritisation: A multicriteria optimisation perspective," Journal of Health Economics, Elsevier, vol. 36(C), pages 164-173.
    13. van Baal, Pieter & Morton, Alec & Severens, Johan L., 2018. "Health care input constraints and cost effectiveness analysis decision rules," Social Science & Medicine, Elsevier, vol. 200(C), pages 59-64.
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 4th January 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-01-04 12:00:05

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    1. Katherine T. Lofgren & David A. Watkins & Solomon T. Memirie & Joshua A. Salomon & Stéphane Verguet, 2021. "Balancing health and financial protection in health benefit package design," Health Economics, John Wiley & Sons, Ltd., vol. 30(12), pages 3236-3247, December.

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