A mixed integer programming model for vaccine pricing within a group purchasing organization.

BACKGROUND: Setting prices for life-saving medical or pharmaceutical products needs to consider multiple factors, e.g., affordability and health outcomes across different populations. When a group of buyers (e.g., countries) combine their purchasing power (e.g., via a group purchasing organization), the average procurement price decreases in the total volume. Decisions about what price to then charge to each member in a group are particularly challenging, considering the disparities in their respective ability and willingness to pay. Tiered pricing can be an effective way to set prices for a group of buyers, but its performance needs to be quantified and evaluated. METHODS: We modeled the decision of setting prices of a medical product (for example, a vaccine) for a group of buyers using a mixed integer programming model, considering the buyers' ability and willingness to pay. The objective is to minimize the unit price disparity adjusted by the buyers' willingness to pay, subject to the constraint that the prices decrease in the buyers' ability to pay. We also developed an analogous subsidy allocation model that applies if the group receives philanthropic donations to support procurement. The models were illustrated with two case studies based on the Bacillus Calmette-Guerin (BCG) vaccine procurement by Gavi, the Vaccine Alliance and Pan American Health Organization, and the performances of uniform, tiered, and differentiated pricing schemes were examined. RESULTS: The adjusted unit price disparity is non-increasing in the number of price tiers allowed. The biggest decrease in the adjusted price disparity occurs when switching to two-tier pricing from uniform pricing. Tiered pricing performs better in the Gavi group compared to the PAHO group, in part because the ability to pay and willingness to pay have a higher degree of rank correlation within the former group of countries. CONCLUSIONS: This work provides a model for price-setting (subsidy allocation) decisions for a group of buyers and provides a quantitative comparison of different pricing schemes. The results of the case studies suggest that the performance of tiered pricing depends on various factors, including the disparities in the ability and willingness to pay across the buyers. FUNDING: This research has been supported in part by the Center for Health and Humanitarian Systems, the William W. George endowment, and the following benefactors at Georgia Tech: Andrea Laliberte, Richard Rick E. and Charlene Zalesky, and Claudia and Paul Raines.

El Fondo Rotatorio para el acceso a las vacunas de la Organización Panamericana de la Salud: 43 años respondiendo al programa regional de inmunizaciones

[RESUMEN]. El Fondo Rotatorio para el acceso a las vacunas (FR) de la Organización Panamericana de la Salud es un fondo común de capital y compra mancomunada de vacunas, jeringas y equipo de cadena de frío para los Estados Miembros de la Organización. Con el objetivo de evaluar los resultados obtenidos durante su funcio- namiento y analizar su contribución a los logros de inmunización, se llevó a cabo una revisión de documentos históricos y literatura gris relacionados con la historia del FR, y se revisaron los procesos actuales, los datos de plataformas alimentadas por los informes anuales de los países, los indicadores de crecimiento, la carga de enfermedades prevenibles por vacunación, la introducción de nuevas vacunas en la Región de las Amé- ricas, y lecciones aprendidas. Se encontró que, en sus 43 años de funcionamiento, el FR ha crecido y ha contribuido a la introducción de nuevas vacunas, y que la Región ha avanzado de manera acelerada en el ámbito de las inmunizaciones. Sin embargo, varios países y territorios de la Región todavía no han introducido ciertas vacunas debido a sus altos precios y al impacto económico del mantenimiento de su administración. La cláusula del precio más bajo posible y del precio uniforme para todos los Estados Miembros participantes ha sido fundamental para la contribución del FR a las metas de vacunación de los programas nacionales de inmunización, así como para la planeación oportuna de la demanda acompañada por la asesoría técnica. El abordaje interprogramático y la planeación de insumos auxiliares son necesarios para el éxito de los progra- mas. La preparación ante pandemias, la producción regional de vacunas y la protección de presupuestos nacionales para la compra de vacunas de alto costo y su sostenibilidad constituyen aún retos en el presente y el futuro.

[ABSTRACT]. The Pan American Health Organization’s Revolving Fund for Access to Vaccines (the Revolving Fund) is a shared pool of funds for the procurement of vaccines, syringes, and cold-chain equipment for the Member States of the Organization. With a view to evaluating the results obtained during the Revolving Fund’s operation and analyzing its contributions to achievements in immunization, a review was conducted of historical docu- ments and grey literature related to the Fund’s history and current processes, as well as data from platforms fed by countries’ annual reports, with reference to growth indicators, burden of vaccine-preventable diseases, introduction of new vaccines in the Region of the Americas, and lessons learned. In its 43 years of operation, the Revolving Fund has grown and contributed to the introduction of new vaccines, and the Region has made rapid progress in the field of immunization. However, several countries and territories in the Region have not yet introduced certain vaccines due to their high cost and the economic impact of sustainably administe- ring them. The requirement to obtain the lowest possible price and to set a uniform price for all participating Member States has been instrumental in the Revolving Fund’s contribution to the vaccination goals of national immunization programs, and for timely planning of demand, accompanied by technical advice. An interpro- grammatic approach and the planning of auxiliary inputs are key to the success of the programs. Pandemic preparedness, regional vaccine production, and the protection of national budgets for sustainable procure- ment of high-cost vaccines are current and future challenges.

[RESUMO]. O Fundo Rotativo para Acesso a Vacinas (FR) da Organização Pan-Americana de Saúde é um fundo comum de capital e compra conjunta de vacinas, seringas e equipamento da cadeia de frio para os Estados Membros da Organização. Com o objetivo de avaliar os resultados obtidos durante sua operação e analisar sua con- tribuição para os êxitos da imunização, procedeu-se a uma revisão de documentos históricos e da literatura cinzenta relacionados à história do FR e revisaram-se os processos atuais, os dados de plataformas alimenta- das pelos relatórios anuais dos países, os indicadores de crescimento, a carga de doenças imunopreveníveis, a introdução de novas vacinas na Região das Américas e as lições aprendidas. Constatou-se que, em seus 43 anos de operação, o FR cresceu e contribuiu para a introdução de novas vacinas e a região avançou com rapidez no campo da imunização. Entretanto, vários países e territórios da região ainda não introduziram determinadas vacinas em razão dos altos preços e do impacto econômico de manter sua administração. A cláusula do menor preço disponível e do preço uniforme para todos os Estados Membros participantes foi fundamental para a contribuição do FR para as metas de vacinação dos programas nacionais de imunização, bem como para o planejamento oportuno da demanda acompanhado pela assessoria técnica. A aborda- gem interprogramática e o planejamento de insumos auxiliares são necessários para o êxito dos programas. A preparação para pandemias, a produção regional de vacinas e a proteção dos orçamentos nacionais para a compra de vacinas de alto custo e sua sustentabilidade ainda constituem desafios atuais e futuros.

O que é o Fundo Estratégico?

O Fundo Estratégico da OPAS (Fundo Rotativo Regional para Provisões Estratégicas de Saúde Pública) é um mecanismo destinado à compra conjunta de suprimentos e medicamentos essenciais nas Américas. O Fundo Estratégico tira proveito dos conhecimentos técnicos intersetoriais, da cooperação multilateral e de parcerias firmadas na América Latina e no Caribe para melhorar o acesso a produtos de saúde de qualidade, seguros e custo-efetivos. Desde sua criação, em 2000, o Fundo Estratégico colaborou com todas as instituições que assinaram um acordo de participação para oferecer uma grande variedade de serviços de apoio e capacitação abrangentes a programas de saúde prioritários voltados para várias doenças infecciosas e crônicas. A pandemia de COVID-19 serviu como um lembrete contundente para que os países controlem as doenças e mantenham os serviços de saúde. O Fundo Estratégico da OPAS oferece uma solução eficaz para alcançar esse objetivo. Os governos da América Latina e do Caribe devem beneficiar-se do Fundo Estratégico como uma ferramenta essencial para apoiar a recuperação da pandemia de COVID-19, avançar rumo à saúde universal e criar sistemas de saúde resilientes e voltados para a atenção centrada nas pessoas.

Qu’est-ce que le Fonds stratégique ?

Le Fonds renouvelable régional pour les fournitures stratégiques de santé publique (connu comme le Fonds stratégique) est un mécanisme pour l’achat groupé de fournitures et de médicaments essentiels dans les Amériques. Le Fonds stratégique s'appuie sur l'expertise technique intersectorielle, la coopération multilatérale et les partenariats établis en Amérique latine et dans les Caraïbes pour améliorer l'accès à des produits de santé de qualité, sûrs et économiques. Depuis sa création en 2000, le Fonds stratégique collabore avec toutes les institutions qui ont signé un accord de participation afin d’offrir un large éventail de services complets dont l’objectif est le soutien et le renforcement des capacités des programmes de santé prioritaires qui luttent contre plusieurs maladies infectieuses et chroniques. La pandémie de COVID-19 a été un rappel brutal de la nécessité pour les pays de lutter contre les maladies sans négliger les services de santé. Le Fonds stratégique de l’OPS offre une solution efficace pour y parvenir. Les gouvernements d’Amérique latine et des Caraïbes ont intérêt à utiliser le Fonds stratégique comme un outil essentiel pour se remettre de la pandémie de COVID-19, progresser vers la santé universelle et mettre en place des systèmes de santé résilients pour des soins centrés sur la personne.

What is the Strategic Fund?

This advocacy brief provides high-level, clear information for the general public on the PAHO Strategic Fund for Essential Medicines and Supplies.

¿Qué es el Fondo Estratégico?

Este folleto facilita información clara y concisa sobre el Fondo Rotatorio Regional para Suministros Estratégicos de Salud Pública de la OPS, un mecanismo de compras conjuntas de medicamentos e insumos esenciales para la Región de las Américas. Desde su creación en el 2000, el Fondo Estratégico trabaja con todas las instituciones que han firmado un acuerdo de participación para ofrecer una amplia gama de servicios integrales de apoyo y fortalecimiento de la capacidad a los programas de salud prioritarios que abordan diversas enfermedades infecciosas y crónicas.

Endoscopic Supply Chain Management and Optimization.

Endoscopy is a procedural specialty that incurs significant cost through its high usage of consumables. Thus, supply chain management and optimization in endoscopy can improve value-based care, by identifying areas of cost saving in device procurement. Creating a multidisciplinary supply chain management team, such as multidisciplinary endoscopic device committee (MEDC), suggests a way to optimize supply chain. The essential components of MEDC are physicians, clinical administration, and institutional supply chain. The physicians in the committee identify new products, define the value of products, lead the product acquisition decision-making process, and generate a practice guideline to define meaningful use of the product. The tasks of MEDC are product acquisition aligning with clinical care, review of meaningful use, and utilization of guidelines creation. In conjunction with group purchasing organization (GPO), which aggregates purchasing volume to leverage cost saving during negotiations, MEDC offers a model to optimize the endoscopy supply chain management.

Directiva administrativa del proceso operativo de solicitud de productos farmacéuticos, dispositivos médicos y productos sanitarios por parte de la IPRESS públicas, y el uso de los recursos para la adquisición y distribución de los mismos a través del Centro Nacional de Abastecimiento de Recursos Estratégicos en Salud (CENARES),a favor de afiliados del Seguro Integral de Salud en el marco del aseguramiento universal en salud. Directiva Administrativa Nº299-MINSA/2021-CENARES / Administrative directive of the operational process of application of pharmaceutical products, medical devices and health products by the public IPRESS, and the use of resources for the acquisition and distribution of the same through the National Center for Supply of Strategic Resources in Health ( CENARES), in favor of members of the Comprehensive Health Insurance within the framework of univers

El documento contiene el proceso de solicitud de productos farmacéuticos, dispositivos médicos y productos sanitarios por parte de las IPRESS Públicas, y el uso de los recursos para la adquisición y distribución de los mismos a través del Centro Nacional de Abastecimiento de Recursos Estratégicos en Salud (CENARES), a favor de afiliados al Seguro Integral de Salud en el marco del aseguramiento universal en salud.

Examining the financial and quality performance effects of group purchasing organizations.

BACKGROUND: Hospitals frequently enter into group purchasing organizations (GPOs) to manage supply costs, yet there is mixed evidence regarding the benefit for hospitals to participate in a GPO. However, the role of GPOs on hospital operations has expanded into dimensions of quality that have not been previously examined. PURPOSE: The aim of this study was to examine the effect of hospital participation in a GPO, as well as GPO network characteristics, on both financial and quality performance outcomes. APPROACH: Data from multiple secondary sources regarding hospital and GPO characteristics were used to create an unbalanced panel of hospitals from 2012 to 2015. This data set was then aggregated to the GPO network level to address questions related to network characteristics, including concentration, bed size, geographic scope, and focus. We evaluated three hospital-level outcomes: supply expense, clinical processes of care score, and patient experience score. The mean of each outcome among all hospitals in a GPO in a given year was used for analyses at the network level. We used fixed and random effect models to assess the effect of hospital characteristics and network characteristics on three measures of financial and quality performance. RESULTS: We found no difference between GPO and non-GPO hospitals for any of the outcomes. However, analyses at the network level revealed network characteristics, including concentration, size, and scope, that affected both supply expense and patient experience scores, but not clinical processes of care. CONCLUSIONS: These results indicate that GPO participation may be motivated for reasons beyond cost and quality performance impacts. PRACTICE IMPLICATIONS: Hospitals and GPOs should consider network characteristics, such as the concentration and geographical dispersion of the GPO network. Alternatively, GPOs may seek to develop homogeneously sized networks dispersed locally in order to best deliver both financial and quality benefits to their members.

The 'Netflix plus model': can subscription financing improve access to medicines in low- and middle-income countries?

At present, pay for prescription models are insufficient at containing costs and improving access to medicines. Subscription financing through tenders, licensing fees and unrestricted or fixed volumes can benefit stakeholders across the supply chain. Pharmaceutical manufacturers can reduce the need for marketing expenses and gain certainty in revenue. This will decrease costs, improve predictability in budget expenditure for payers and remove price as a barrier of access from patients. Inherently, low- and middle-income countries lack the purchasing power to leverage price discounts through typical price arrangements. These markets can realise substantial savings for branded and generic medicines through subscription financing. Procuring of on-patent and off-patent drugs requires separate analysis for competition effects, the length of contract and encouraging innovation in the medicine pipeline. Prices of competitive on-patent medicines and orphan drugs can be reduced through increased competition and volume. Furthermore, pooling expertise and resources through joint procurement has the potential for greater savings. Incentivising research and development within the pharmaceutical industry is essential for sustaining a competitive market, preventing monopolies and improving access to expensive treatments. However, technical capacity, forecasting demand and the quality of generic medicines present limitations which necessitate government support and international partnerships. Ultimately, improving access requires progressive financing mechanisms with patients and cost containment in mind.

[Buyers' club†: an alternative for access to treatment†?] / Buyers' club†: une alternative pour l'accès au traitement†?

Rapid medication management for patients infected with HIV, HCV or HBV is key in optimizing a more favourable clinical response, in terms of morbidity, mortality, quality-of-life and reduced risk of transmission. If a drug is expensive, access to treatment for an uninsured patient with limited resources can be a hurdle that leads to forgoing healthcare for economic reasons. The buyers' club's objective is to provide logistics and/or financial assistance to a patient aiming to import qualitative generics for his personal use at an affordable price oversea. The drug is purchased on the internet.

La prise en charge médicamenteuse rapide pour les patients infectés par le VIH, le VHC ou le VHB est un élément clé pour obtenir une réponse clinique favorable en termes de morbidité, mortalité, et qualité de vie, et elle permet de diminuer les risques de transmission. Lorsqu'un médicament est cher, l'accès aux traitements pour un·e patient·e sans assurance avec des ressources limitées est une barrière qui peut conduire à renoncer aux soins pour des raisons économiques. Un buyers' club est une structure dont l'objectif est d'apporter une aide logistique et/ou financière à un·e patient·e qui souhaite importer à titre personnel un médicament de qualité et efficace à des conditions économiquement plus favorables. L'achat du médicament se fait par internet.

Environmental and Organizational Factors Associated with Hospital Use of GPO Services.

Given the potential benefits of Group Purchasing Organizations in cost-containment efforts for hospitals on supplies and purchased services, an important question that remains unanswered is what conditions support or hinder the utilization of GPOs by hospitals. Therefore, this study explores the relationship between GPO use by hospitals and their market and organizational characteristics. Data on hospital GPO utilization and other organizational characteristics were combined with secondary hospital market characteristics. Panel logistic regression with random effects and state and year fixed effects analysis was used to examine the relationship between hospitals' utilization of GPO services and hospitals' organizational and market characteristics. Overall, the majority of hospitals utilized the services of GPOs. Specifically, the number of hospitals utilizing the services of GPOs increased slightly from 3290 (72.2%) in 2004 to 3337 (74.4%) in 2013. In regression analyses, hospitals utilizing the services of GPOs operated in an external environment with mixed levels of munificence, more dynamism, and less competition. Specifically, hospitals operating in a less munificent environment are more likely to utilize the services of GPOs. The study findings provide organizational decision-makers and policymakers' insights into how certain market and organizational factors influence hospital strategy choice, in this case, the use of GPOs.

Prospects for development of group purchasing organizations (GPOs) in China within the context of national centralized drug procurement.

Healthcare group purchasing organizations (GPOs) are considered to play an integral role in the healthcare supply chain by keeping prices low and helping all members of the healthcare system achieve their objectives. China has been exploring GPOs in the field of drug procurement since 2015, and there are currently three GPO models in Shanghai, Shenzhen, and Guangzhou. Although the three models operate differently and they have each been examined, they have all achieved certain results and demonstrated the ability to control drug expenditures. In 2018, the National Healthcare Security Administration implemented a national centralized drug procurement policy, also known as the 4 + 7 procurement policy ("4+7 Policy"). This policy context has also led to changes in the strategy for development of GPOs in China. GPOs need to explore strategies that do not overlap with the scope of 4 + 7 procurement, and they need to develop dynamic and personalized procurement plans that are more in line with first-line clinical practices to have a synergistic effect in combination with the "4+7 Policy." In the future, GPOs will grow rapidly in China. The number of GPOs need to be increased to prevent monopolies, and GPOs need to expand their diversified value-added services to perform more tasks in terms of supply chain management and data analysis.

Revisão do arranjo das compras públicas a partir de um contexto de crise / Nota Técnica n. 68 (Diset): Revisão do arranjo das compras públicas a partir de um contexto de crise / Português

A pandemia da Covid-19 expôs ao mundo a fragilidade dos arranjos institucionais de suprimentos para os sistemas de saúde mundiais. Insumos básicos para o atendimento de saúde, como equipamentos de proteção individuais (EPIs), respiradores artificiais e higienizantes/saneantes, passaram a ser disputados por diversos países e a ensejar comportamentos fraticidas entre sistemas de saúde privado e público de diferentes esferas no Brasil: pelo menos seis estados e diversas prefeituras editaram atos administrativos para requisitar insumos e produtos como respiradores durante a pandemia, levando a União a reagir na Justiça e a defender uma centralização das compras desses produtos. Entes privados como a Associação Nacional de Hospitais Privados (ANAHP), a Confederação das Santas Casas de Misericórdia, Hospitais e Entidades Filantrópicas (CMB) e a Confederação Nacional de Saúde (CNS) questionaram judicialmente o privilégio dos hospitais públicos na distribuição de EPIs. Nesse contexto de ruptura da cadeia de suprimentos e de concorrência predatória entre compradores, a Organização Mundial da Saúde (OMS) recomenda, além da racionalização da demanda e do uso dos insumos hospitalares, a gestão centralizada dessas aquisições e a coordenação do abastecimento das unidades de saúde para evitar excessos e quebras de estoques (WHO, 2020). A transposição dessa reflexão para o cenário brasileiro requer uma apreciação dos desafios e das oportunidades de aperfeiçoar os mecanismos de agregação de demandas e as sistemáticas de compras conjuntas disponíveis para os gestores públicos envolvidos no enfrentamento da emergência de saúde pública da Covid-19, com maior colaboração entre os entes públicos e o possível envolvimento de entes privados que atendam majoritariamente pacientes do Sistema Único de Saúde (SUS), ao mesmo tempo que se preserve a transparência e se facilite a fiscalização. Algumas alterações legais e procedimentais são necessárias, parte delas no nível mais geral das compras e contratações, e sua implementação em caráter experimental, se alcançar resultados satisfatórios, pode se tornar definitiva e inclusive ser expandida para outros contextos (objetos de contratação, modalidades, poderes e entes). A nota tem mais cinco seções além desta introdução. Na próxima, fazemos uma motivação para um arcabouço de compras centralizadas em saúde. Em seguida, varremos algumas experiências internacionais de compras centralizadas e o que tem sido feito no Brasil a respeito. As seções seguintes detalham, então, o arcabouço legal para se implementar um Sistema de Registro de Preços de Emergência, que chamamos de Acordo-Marco, e um leque de propostas de implementação para esse sistema. A última seção consolida as considerações finais.

Equipamentos de proteção individual, higienizantes e material de higiene pessoal: preços, regulação e gestão da informação em tempos de coronavírus / Nota Técnica n. 63 (Disoc): Equipamentos de proteção individual, higienizantes e material de higiene pessoal: preços, regulação e gestão da informação em tempos de coronavírus / Português

Esta nota tem por objetivo discutir alguns aspectos relacionados ao fornecimento de equipamentos de proteção individual (EPIs) e outros materiais necessários à minimização do risco de contágio pelo coronavírus por trabalhadores em estabelecimentos de saúde, especialmente o aumento de preços desses produtos em virtude do crescimento da demanda por causa da pandemia de Covid-19.

Hospital purchasing alliances: Ten years after.

BACKGROUND: Most hospitals outsource supply procurement to purchasing alliances, or group purchasing organizations (GPOs). Despite their early 20th century origin, we lack both national and trend data on alliance utilization, services, and performance. The topic is important as alliances help hospitals control costs, enjoy tailwinds from affiliated regional/local alliances, and face headwinds from hospital self-contracting and criticism of certain business practices. PURPOSE: We compare the utilization, services, and performance of alliances in 2004 and 2014. APPROACH: We analyze alliances using two comparable surveys of hospitals. We use significance tests to assess changes in alliance utilization, services, and performance (e.g., cost savings). We also assess the use of regional/local alliances affiliated with national GPOs. RESULTS: Purchasing through national alliances has somewhat diminished. Over 10 years, hospitals have diversified GPO memberships to include regional/local alliances (many affiliated with their national GPO) and engaged in self-contracting. At the same time, hospitals have increased purchases of many categories of supplies/services through national GPOs and endorsed their value-added functions and increasingly important role. Hospitals report greater satisfaction with several GPO functions; performance on most dimensions has not changed. CONCLUSIONS: National alliances still play important roles that hospitals find valuable. PRACTICE IMPLICATIONS: Purchasing alliances continue to play an important role in helping hospitals with both cost savings and new services. Their growing complexity, along with growing use of self-contracting, poses managerial challenges for hospital purchasing staff that may require greater hospital investment.

Evaluating the centralized purchasing policy for the treatment of hepatitis C: The Colombian CASE.

The high cost of drugs for hepatitis C limits access and adherence to treatment. In 2017, the Colombian health care system decided to design a strategy. It consisted of centralized purchasing, regulations, clinical practice guidelines, and direct observation of the treatment and follow-up of patients. The main objective of this study was to assess the centralized purchasing strategy in Colombia. The study design was a policy implementation assessment. We analyzed the change in prices, the clinical outcomes, and the opinions of stakeholders using data from the Ministry of Health. Additional information about effectiveness came from the Colombian Fund for High-Cost Diseases and semi-structured interviews of the stakeholders. The follow-up was from October, 2017 to October, 2018. The total number of patients reported in the cohort period was 1069. The number that finished 12 weeks of treatment, completed the follow-up for the case closure, and were considered cured through the end of October, 2018 was 563 (53%). The remainder, 506 patients (47%), are currently in treatment. A total of 543 of these treated patients (96%) were cured. After implementing this strategy, the drug prices decreased by more than 90% overall. Before implementation, the total direct cost was $100 102 171.75 dollars. Afterward, the cost was $8 378 747 dollars.

Quantifying Overinsurance Tied to the Tax Exclusion for Employment-Based Health Insurance and Its Variation by Health Status.

The exclusion of employment-based health insurance from income and payroll taxes is thought to increase the generosity of insurance coverage and, in turn, increase the overutilization of low-value health care services. We examine this inefficiency of overinsurance by quantifying the change in expected utility across 4 benchmark plans varying in actuarial value (AV) and focus on the distribution of each of these estimates across different groups of people varying in health status. Specifically, we quantify the changes in health care spending due to moral hazard and the changes in uncertainty tied to risk aversion using data from the nationally representative sample of adults with employment-based coverage from the 2007-2016 Medical Expenditure Panel Survey, and produce estimates of expected utility for 24 groups of people based on their age, gender, and preexisting conditions. Our model suggests an average preferred AV of 78% without the tax exclusion, with 29.0% of the population preferring a 60% AV, 6.5% preferring a 70% AV, 18.1% preferring an 80% AV, and 46.4% preferring a 90% AV. When incorporating the distortionary effect of the employment-based tax exclusion, the preferred plan increases to an 83% AV for low-income people (with 71.0% of the population preferring a 90% AV) and an 84% AV for high-income people (with 76.0% of the population preferring a 90% AV). We estimate that policy changes to make subsidies independent of a plan's AV could result in increases in utility equal to about 2.7% of total health care spending, but with those net gains concentrated among the healthy.