Valuing Protection against Health-Related Financial Risks. (8th February 2019)

• Record Type: Journal Article
• Authors: Skinner, Jonathan; Chalkidou, Kalipso; Jamison, Dean T.
• Editors: Robinson, Lisa A.
• Is Part Of: Journal of benefit-cost analysis. Volume 10(2019)Supplement 1
• Page Start: 106
• Page End: 131
• Publication Date: 2019-02-08
• Subjects: D61, -- I13; health, -- risk and uncertainty; Cost effectiveness -- Periodicals; 658.1554
• DOI: 10.1017/bca.2018.30
• Languages: English
• ISSNs: 2194-5888

Abstract

Abstract : There is strong interest in both developing and developed countries toward expanding health insurance coverage. How should the benefits, and costs, of expanded coverage be measured? While the value of reducing the financial risks that result from insurance coverage have long been recognized, there has been less attention in how best to measure such benefits. In this paper, we first provide a framework for assessing the financial value from health insurance. We focus on three distinct potential benefits: Pooling the risk of unexpected medical expenditures between healthy and sick households, redistributing resources from high- to low-income recipients and smoothing consumption over time. We then use this theoretical framework and an illustrative example to provide practical guidelines for benefit-cost analysis in capturing the full benefits (and costs) of expanding health insurance coverage. We conclude by considering other potential financial effects of broad insurance coverage, such as the ability to consolidate purchases and thus lower input prices.