Possible objectives and resulting entitlements of essential health care packages.

The notion of a defined 'core package of essential health care services' has appeared in many different health reform proposals in the 1990s. This paper attempts to explore the possible objectives of the 'core package' component of health care reform. Two board applications are apparent: the use of essential packages to ration scarce public funds and the incorporation of a minimum benefit package into 'managed competition' type reforms, where they constitute a mandated minimum level of private insurance cover. Eight possible objectives for an essential benefit package are described: To protect against catastrophic illness events; to ensure social risk pooling; to improve allocative efficiency in the health system; to eliminate 'high burden of disease' conditions; to improve equity of access to services; to combat cost-escalation; to encourage competition between insurers; and to facilitate public participation and transparency in decision making. Closer examination of objectives reveals that they often conflict, which suggests that a clear understanding of the purpose of reform is essential before it is worthwhile devoting energy to the development of essential benefit packages. It is argued that two main clusters of objectives emerge from the eight described, representing Rawlsian (risk avoidance) and utilitarian (efficiency improvement) social welfare philosophies, respectively. Practical experience suggests that priority setting exercises have been unsuccessful in meeting efficiency objectives, but that they may well be quite useful in fulfilling risk-pooling aims.