Objectives Policymakers face many decisions when considering public financing for health, including the kind of health interventions to include in a publically financed package. The consequences of these choices will influence health outcomes as well as the financial risk protection provided to different segments of the population. The purpose of this study is to illustrate the size and distribution of benefits due to treatment and prevention of diarrhoea (ie, rotavirus vaccination).

Methods We use an economic model to examine the impacts of universal public finance (UPF) of diarrhoeal treatment alone, as opposed to diarrhoeal treatment along with rotavirus vaccination in Ethiopia using extended cost-effectiveness analysis (ECEA). ECEA allows us to measure the health gains and financial risk protection provided by these interventions for each wealth quintile. Our model compares a baseline situation with diarrhoeal treatment seeking of 32% (overall) and no rotavirus vaccination, to a situation where UPF increases treatment seeking by 20 percentage points for each quintile and rotavirus vaccination reaches DTP (diphteria, pertussis, tetanus) 2 levels for each quintile (overall rate of 52%). We calculate deaths averted, private expenditures averted and costs incurred by the government under the baseline situation and with UPF.

Results We find that diarrhoeal treatment paired with rotavirus vaccination is more cost effective than diarrhoeal treatment alone for the metrics we examine in this paper (deaths and private expenditures averted). Per US$1 million invested, diarrhoeal treatment saves 44 lives and averts US$115 000 in private expenditures. For the same investment, diarrhoeal treatment and rotavirus vaccination save 61 lives and avert US$150 000 in private expenditures. The health benefits of these interventions tend to benefit the poor, while the financial benefits favour the better-off.

Conclusions Policymakers should consider multiple benefit streams as well as their scale and incidence when considering public finance of health interventions.