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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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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.

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Authors and Affiliations

  1. Department of Health Policy and Management, University of California, Los Angeles (UCLA), Los Angeles, CA, USA

    Brayan V. Seixas

  2. UCLA Center for Health Policy Research (CHPR), Los Angeles, CA, USA

    Brayan V. Seixas

  3. School of Population and Public Health, University of British Columbia, Vancouver, BC, Canada

    Craig Mitton

  4. Centre for Clinical Epidemiology and Evaluation, Vancouver Coastal Health Research Institute, Vancouver, BC, Canada

    Craig Mitton

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  1. Brayan V. Seixas
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Contributions

BVS conceptualized the work, carried out the literature review, drafted the paper and reviewed the final version; CM supervised the development of the work and reviewed the final version.

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Correspondence to Brayan V. Seixas.

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No funding was received for carrying out this study.No funding was received for carrying out this study.

Conflict of interest

Brayan V. Seixas and Craig Mitton declare no conflicts of interest in pursuing the current work.

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Seixas, B.V., Mitton, C. 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. Appl Health Econ Health Policy 19, 9–15 (2021). https://doi.org/10.1007/s40258-020-00591-8

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