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Using a Formal Strategy of Priority Setting to Mitigate Austerity Effects Through Gains in Value: The Role of Program Budgeting and Marginal Analysis (PBMA) in the Brazilian Public Healthcare System

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  • Brayan V. Seixas

    (University of California, Los Angeles (UCLA)
    UCLA Center for Health Policy Research (CHPR))

  • Craig Mitton

    (University of British Columbia
    Vancouver Coastal Health Research Institute)

Abstract

The fiscal regime implemented in Brazil with the constitutional amendment 95 (EC-95) of December 2016 froze primary expenditures for 20 years, including healthcare spending. Previous studies have estimated strong negative effects of this policy on the health of Brazilians. Although there has been a constant pressure to repeal EC-95, this policy is unlikely to be changed in the near future. Thus, there is also a need to take actions within its own terms in order to mitigate its harmful consequences on population health. Shedding light on the existing evidence about the impact of austerity on health, the present work discusses how decision-makers can use a formal framework of decision making in priority setting and resource allocation to tackle the amplified budgetary strain. Drawing on principles of Program Budgeting and Marginal Analysis (PBMA), efficiency can be improved by shifting spending from low-value to higher-value areas, avoiding the “across-the-board cut” caused by non-differential consideration of expenditures in a context of mismatched growth of demand and supply of healthcare. By evaluating opportunity costs of investment and disinvestment proposals on the basis of multiple criteria and marginal analysis, the Brazilian public healthcare system could obtain gains in value, achieving better performance and attenuating the relative decline in spending on health brought by an austerity scenario.

Suggested Citation

  • Brayan V. Seixas & Craig Mitton, 2021. "Using a Formal Strategy of Priority Setting to Mitigate Austerity Effects Through Gains in Value: The Role of Program Budgeting and Marginal Analysis (PBMA) in the Brazilian Public Healthcare System," Applied Health Economics and Health Policy, Springer, vol. 19(1), pages 9-15, January.
    • Handle: RePEc:spr:aphecp:v:19:y:2021:i:1:d:10.1007_s40258-020-00591-8
    DOI: 10.1007/s40258-020-00591-8
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    References listed on IDEAS

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    1. Haas, Marion & Viney, Rosalie & Kristensen, Elizabeth & Pain, Charles & Foulds, Kim, 2001. "Using programme budgeting and marginal analysis to assist population based strategic planning for coronary heart disease," Health Policy, Elsevier, vol. 55(3), pages 173-186, March.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 1st February 2021
      by Chris Sampson in The Academic Health Economists' Blog on 2021-02-01 12:00:03

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