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Designing Effective Benefit Packages

This topic focuses on issues related to designing benefit packages for publicly funded health systems. It discusses how policymakers must make difficult choices about which benefits to fund given limited resources and also set rules around referrals and copayments. The topic then provides examples of benefit package reforms in Chile, Burundi and Moldova that helped advance those countries toward universal health coverage.

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15 views13 pages

Designing Effective Benefit Packages

This topic focuses on issues related to designing benefit packages for publicly funded health systems. It discusses how policymakers must make difficult choices about which benefits to fund given limited resources and also set rules around referrals and copayments. The topic then provides examples of benefit package reforms in Chile, Burundi and Moldova that helped advance those countries toward universal health coverage.

Uploaded by

98b5jc5hgt
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

Module 5_Benifit package design

In this module, we explore a number of issues related to the design of benefit packages. Policy
makers are faced with difficult choices about which benefits to fund with the limited public revenues
available. They must also set the rules, for example whether patients must use a referral system, or
make a co-payment for certain goods or services. These decisions need to be made in a way which
helps to steer the health system towards universal health coverage, given the current situation, and
future fiscal and other constraints.

For a benefit package to be effective, the different elements of health financing policy need to be
closely coordinated and consistent. They must also support changes in other parts of the health
system, in particular service delivery.

Select the framework to see which intermediate objectives and final coverage goals are most directly
influenced by the way in which benefit packages are designed.
What is rationing?
All countries, whether rich or poor, limit service entitlements in the benefit package in one way or another.
This is called rationing.
By clearly defining which services are covered by the benefit package, and for whom, those services which
are not covered are also clearly identified.
All health systems ration patient access to health care. The private sector rations access by charging market
prices, and as a result demand is driven by a person's ability and willingness to pay. Governments moving
their health systems towards UHC seek to ration care on the basis of "need," for example by covering cost-
effective treatments, and providing greater entitlements to people with lower-incomes.
Summary
In this topic we have focused on publicly funded benefit packages. These may be fully subsidised i.e.
publicly funded with no patient charge, or partially publicly funded i.e. at least some patients have to make
a copayment.
The benefit package specifies which health services are fully covered by public funds, those which require
individuals to make a co-payment, and those services and commodities that are excluded. In many
countries benefits are defined in terms of services that are specifically excluded, rather than specifically
included.
Every health system, in every country around the world, rations service entitlement. As noted above,
sometimes this rationing is explicit in terms of included or excluded services. In other cases entitlements
are not explicit, in which case rationing takes mechanism implicitly, with the availability of services
depending on the level of resources to provide care; when resources are inadequate, services or
commodities are simply not covered.
The Consultative Group proposes a three part strategy:
1. Categorize services into priority classes: guiding criteria include the cost-effectiveness of services,
those services which reduce inequities in service utilization, and those which best offer financial
protection. Each country will prioritize differently according to its particular context.
2. Expand coverage for high-priority services to everyone: this includes reducing financial barriers (e.g.
patient co-payments) to the use of these services, whilst increasing mandatory, progressive prepayments,
and reducing barriers to pooling funds. The Consultative Group goes so far as to recommend eliminating
patient financial barriers for these services.
3. Ensure disadvantaged groups are not left behind: in terms of actually accessing entitlements; for
example low-income and rural populations often face many barriers to accessing services even if they are
entitled to receive them free at the point of service. You can find out more about this guidance in the
Resources section.
Summary
In this topic we first looked at a hypothetical situation to explore the difficult choices faced when making
chooses about which services to fund, and how to ration access to publicly funded services. We then
looked at issues of fairness and equity on the path to UHC. Finally we looked at how the coverage cube
can be used to help think about the different dimensions of UHC, which are generally considered
simultaneously as part of benefit package decisions.

Introduction
In this topic, we look at reforms to benefit entitlements implemented in a number of countries which have
helped to move their health systems towards UHC.
In effect, providers gained because the lost user fee income was now replaced, and patients gained because
the financial barrier at the point of use was eliminated; incentive for providers to treat patients was also
restored.
The contracts also included performance bonuses rewarding quality as well as the quantity of services
provided. This experience highlights the importance of linking policy on the benefit package to provider
payment mechanisms in order to transform promises into reality.
Example: Moldova
In 2004, the Government of Moldova introduced a Mandatory Health Insurance Scheme, as a result of
which most of the health budget was transferred to the newly established health insurance agency, rather
than being allocated to local governments as in previous years. These budget transfers were combined
together with revenues from a newly introduced payroll tax for health.
This new single national fund was then used to pay providers, using new payment mechanisms, which led
to a significant reallocation of funds away from hospitals and towards primary health care (PHC) services.
This improved equity in resource distribution.
Five years later, in 2009, around 70% of the population was covered under this scheme. The uninsured had
very limited access to services, and the government, in response, passed legislation making primary health
care services a universal benefit, a right for all Moldovans

Summary
In this topic, we have looked at examples of reforms to benefit packages in Chile, Burundi and Moldova,
and how they have supported progress towards UHC.
The central message from these examples is that whilst the design of a benefit package is critical to clarify
entitlements and obligations, both to those providing health services but also to potential users, translating
these declared benefits into effective coverage requires action across all the functions of health financing:
revenue raising

 pooling of funds
 purchasing of services

Common questions

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Harmonization of health financing policies requires aligning revenue raising, pooling, and purchasing functions with benefit package design. This ensures that coverage goals are achieved, declarations are implemented effectively, and both health providers and users have clarity on entitlements and obligations .

Rationing in health systems involves limiting service entitlements in the benefit package to manage scarce resources. This is achieved by clearly defining covered and non-covered services, influencing access based on 'need' rather than 'ability to pay.' It ensures that resources are allocated to cost-effective treatments and services that enhance equity, moving health systems towards UHC .

Reforms in countries like Chile, Burundi, and Moldova have focused on redesigning benefit packages to clarify entitlements and obligations. These reforms, which include mechanisms for revenue raising, pooling, and purchasing, have improved coverage and equity, driving progress towards UHC .

Integrating benefit package design with provider payment mechanisms ensures that declared benefits translate into effective coverage. This linkage provides financial stability to providers, who gain through new payment mechanisms, and reduces patient financial barriers at the point of service. This framework incentivizes quality and quantity in service provision .

To support equity and accessibility, it is recommended to expand coverage for high-priority services by reducing financial barriers like patient co-payments, and increasing mandatory progressive prepayments. Additionally, strategies include ensuring disadvantaged groups such as low-income and rural populations can access entitlements without barriers, possibly requiring the elimination of patient financial barriers .

Financial protection mechanisms influence benefit package priorities by ensuring services reduce financial barriers and protect against catastrophic expenses. The integration of mandatory progressive prepayments and elimination of patient co-payment barriers aligns with these priorities, enhancing accessibility and equity .

Despite entitlements being free at the point of service, barriers such as geographical distance, lack of awareness, and socio-economic factors can prevent access. Low-income and rural populations often face these challenges, emphasizing the need for targeted strategies to overcome these barriers .

Moldova's health financing reforms included a shift to a Mandatory Health Insurance Scheme, consolidating funds into a national agency. The reforms reallocated funds from hospitals towards primary health care, promoting equity in resource distribution. This led to broader population coverage and the establishment of primary health care services as a universal right .

Categorizing services into priority classes enables health systems to focus on cost-effectiveness, equity in service utilization, and financial protection. Each country designates its priorities based on their specific context, which guides the extension of coverage for high-priority services and ensures the alignment of health financing with service delivery goals .

Policymakers must make difficult choices about which benefits to fund with limited public revenues. They need to decide on rules such as whether patients must use a referral system or make co-payments for certain services, all while steering the health system towards universal health coverage under fiscal constraints. A closely coordinated health financing policy that supports service delivery changes is essential .

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