Value for Money in Global Health | Essentials of Global Health with Richard Skolnik

Welcome. In this session, we'll talk about value for money when investing in key global health efforts. By the time you finish this session, you should be able to speak about the notion of value for money and health, articulate some of the basic principles of cost-effectiveness analysis, and note some of the best buys in global health. Let's start with some stories and then probe our students about them. Rachel, you have a chance, and these are slightly, if not very exaggerated, but I hope you'll find them useful to make some important points. Rachel, you have a chance to buy a tablet device, let's say, and you have a chance to buy it either for $299 or for $399. You can buy it from two different firms. Both are highly regarded. Both can deliver the same exact tablet to you at exactly the same time right to your door. If you could do this for $299 or $399, which would you choose and why would you choose it? I would choose to buy the tablet for $299. And why is that? If they're the same tablet, then it makes the most sense for me to spend as little money as possible. To get exactly the same outcome, if you would. Elizabeth, now let's look at an example from clinical medicine. Again, highly exaggerated. John has heartburn. He can take a simple antacid or he can take an over-the-counter acid inhibitor. Let's say that in both cases, John has exactly the same clinical outcome. If he takes an antacid, the course of treatment is gonna be, let's say, one US dollar. If he takes the acid inhibitor, let's say the course of treatment to get to exactly the same outcome, I repeat, that he could get with an antacid is gonna be six US dollars. In this case, Elizabeth, if you were John and paying out of your own pocket, for example, which would you take, the antacid for $1 or the acid inhibitor for $6 to achieve the same clinical outcome? I would choose the antacid for $1. And why is that? Because it doesn't make a lot of sense when you could use those $5 to purchase other things. It makes more sense if you're going to reach the same outcome to spend as little as possible. Okay, very well said. So if you had unlimited money, or I had unlimited money, or governments had unlimited money, these questions might not be so relevant. But I want to suggest that money is never unlimited and that choices always have to be made between investment alternatives. So let's talk a little bit about one way, one approach to considering alternative investments and in which countries might want to spend their money. All governments have to set priorities. And one tool that they might use to set those priorities is called cost-effectiveness analysis. This can be defined in simple terms as a method for comparing the cost of an investment with the amount of health that can be purchased with that investment. The cost is the price of the investment. The amount of health that can be purchased could be measured, for example, in deaths averted, DALYs averted, or narrower goals, such as the cost per child fully immunized or the cost per TB patient who is cured. The cost-effectiveness of an intervention relates in part to the incidence, the number of new cases and the prevalence of the number of people with a certain condition. This cost-effectiveness will also depend on the cost of the intervention, the outcomes produced and the extent to which the intervention can be implemented effectively. So let's examine a very simplified and exaggerated example of a question that one might want to use cost-effectiveness analysis to consider. In this case, let's think about tuberculosis control. Quite some time ago, in fact, one of the classic examples of cost-effectiveness analysis used this technique, this approach, to look at two different ways of providing tuberculosis care. In one case, tuberculosis is done in an unobserved manner. If, for example, Shailen, God forbid, had tuberculosis, we would give her her TB drugs, we would talk to her about taking all those drugs, and then she would hopefully take the drug. In another case, we would carry out what we call directly observed therapy. In that case, let's say that Elizabeth is a respected person in the community. She's a minister, she's a school teacher, she's a wise older woman. What we would do is give Elizabeth the drugs, and each day, Shailen would go to Elizabeth for those drugs, pick them up, take the drug in front of Elizabeth, and Elizabeth would certify to the supervisors that Shailen had taken her drugs properly. So let's see which of these cases turns out to be the one that's most cost-effective. So let's say, for example, in the case of the unobserved therapy, the first one that I mentioned, let's say that the cost per patient is $180. Let's say that 70% of the patients who take this therapy are cured. And remember, when we're talking about tuberculosis and many other interventions, we're not really interested in how many people take their drugs. What we're really interested in is the outcome, how many people successfully complete treatment and are cured. Now, we also have a second approach, which is directly observed therapy. In this case, it's $200 per patient, it's more expensive, but 90% of the patients are cured, which is a higher cure rate than you have in the case of unobserved therapy. So let's work this out and see what's the cost per patient cured. Again, I remind you, this is a highly simplified case, but I hope it's one that's useful for helping you to understand some of the principles involved. So let's say that we treat 10 people for tuberculosis in Village X. Again, the cost was $180 per patient and seven of the patients were cured. We would have spent $1,800 to cure seven patients. When we divide 1,800 by seven, what we get is $257 per patient cured. In the other case of observed therapy, it was $200 per patient to treat. Treating 10 of them would be $2,000, but nine of the 10 would be cured, and therefore, when we divide nine into 2,000, we get $222 per patient cured. So in this case, even though observed therapy is more expensive than unobserved therapy, it turns out that observed therapy is also more cost-effective. The cost per patient cured with observed therapy is less than the cost per patient cured with unobserved therapy. If you were a policymaker, you'd also take account of other concerns. Would it be doable? Would it be sustainable? Would it be affordable? But if those things were at least equal, what you would do is you would certainly choose the case of the observed therapy because it's more cost-effective. Now, we can also use cost-effectiveness analysis to compare across different kinds of investments. Let's again talk in extremely simple terms for which I apologize only a bit, and for which I beg your indulgences, I guess I should probably say. So let's say there's a government that has just $10,000 equivalent to spend on health. And let's say that this government has just two choices of investment alternatives. One choice, and this of course would never be the case. The world is never this simple. But one choice is the government could use its public funds from the Ministry of Health budget to finance heart surgery for one person. And let's say that that one person as a result of this surgery will live 20 years longer than he would if he didn't get the surgery. The only other investment choice in the country is to vaccinate 1,000 children against vaccine-preventable diseases. And when they do that, there are 10 children who would succumb around five years of age if they didn't vaccinate. They save 65 years of life, let's say, if they would have lived to 70. They live 65 years of additional life for each child vaccinated. And therefore they save through this program 650 life years. Now, in this case, if the government had to choose between these two investments and it only had these two investments from which it could choose, the choice would be rather clear. In this case, they would opt for vaccinating 1,000 children because with the same amount of money, they could buy much more health for their people than they could buy if they used that money to provide heart surgery to just a single patient. In fact, let's now look at a slide that shows data on the cost-effectiveness of a number of interventions. In this case, the amount of money spent is compared with the number of DALYs that can be averted through that intervention. And you see here a substantial range of dollars per DALY averted. As we had in the exaggerated example, we can see that the dollars per DALY averted for example, coronary bypass surgery is much, much greater than the cost for dollars per DALY averted for oral rehydration therapy for young children for diarrhea, improved emergency obstetric care, TB treatment, or for example, basic childhood vaccines. You should understand there's no absolute guideline for what's cost-effective and what's not. Over the last several decades, the World Health Organization had been recommending that an investment could be considered cost-effective if it was less than three times the gross national product per capita of a country. But you should be aware that many people have important critiques of that approach. But at least when you use this kind of analysis, you can see what at least is the relative cost per outcome of different kinds of investments and certainly your choices of investments can be enlightened by using this kind of analysis. Now you should understand that cost-effectiveness analysis is only one of many tools for making investment choices in health. In addition, in the real world, which isn't nearly as exaggerated as this, and which is much more complicated, one has to take account of a number of factors such as politics, the role and place of different political actors in thinking about investment choices. In addition, as you think about cost-effectiveness analysis and as you use it for helping you to make investment decisions in health, it's really essential to consider equity, the burden of disease, the extent to which the investment serves society as a whole the extent to which the investment produces benefits additional to its usual ones and the impact of the intervention on the provision of insurance. In addition, those who set priorities for investing in health will have to take account of the capacity to deliver the proposed services. They're not cost-effective if they can't be implemented. The links between the services in which you might be investing and existing services, the ability to change budget priorities in favor of the proposed investment and any transitional costs that are associated with making those moves to a new set, for example, of priorities. Now, let me end by saying, or come close to ending by saying, it's true in my view that many low-resource countries need to invest more in health. But I also want to suggest to you that even in those countries, how they spend money is at least as important if not more important than how much they spend. In this session, you've learned a bit about the notion of cost-effectiveness analysis. You've applied the tool of cost-effectiveness analysis to a number of very exaggerated and simplified cases. You've become more familiar with the idea of value for money in health. And you understand more about some of the important considerations that you have to keep in mind as you use the cost-effectiveness analysis tool. In the next session, we'll begin to speak about health systems in different countries.