Well I think there would be a better way, or better a most less wrong way. Or better you need to decide in allotted time what to do and what could be done in time. Which often is a compromise. When is there the time to do it right. it's done when it done.
Example of more health. Any thing could influence the gameplay. Health to more leeway to take huge risk. Faster pace more rushing. Other way
like If enemies are less accurate, you just keep more distance but in close range it doesn't matter. Games could be linear and corridor based with lots to close encounters.
More health means. Much more time to react. Making wrong responsive decision don't weight that heavy. Having much more chance to get through a ambush. Wenn not you move slower and more observing to spot first the opfor dose you.
What this means if you go for action rich epic story regular game are hanging back. Might not be the game flow you intended.
I do think there is a right way but it's to costly to develop.
You also need to know very much about the gamer. Ask that when showing the difficulty screen. |then the game adopts to player in way he prefer.
If you are into deep story you want a good story flow game experience. So don't replay a part to much better not at all.
If you are a action gamer you want to have fun it's less about survival but more ammo rich environment. high number but effective weapons.
Then those very hardcore player who want to be challenged.
these kind of gamer exist in all skill levels but need different adoption.
Also mostly the game flow difficulty is very variable. While mid and end part should be going up they could be walk in the park, but there are point replayed dozen times.
A very costly to implement way could be. Taunting and reputation. If you are good the AI adapts to more care full approach. Calling reinforcements before they going in.
while if your barely move forward. The opposing force get more risky and let it know by letting you know your time has come and going after you without backup.
I more a games who want to shoot and just follow the story line. Having some core gameplay action. Without end bosses QTE or cut scenes.
Normally I choose Easy or normal. But some games Hard is easy.