Health Services: Well Chosen, Well Organized Combining calculations of the cost with measures of the effectiveness of interventions nd using them to determine priorities is a very recent development. Early work using such techniques in developing countries looked mainly at the cost-effectiveness of specific dis ease control programmes(8-13).This type of work expanded following publication of the World development report by the World Bank in 1993(14)and subsequent work by WHO (15) Table 3. 1 provides examples of interventions that, if implemented well, can substan- tially reduce the burden of disease, especially among the poor, and do so at a reasonable cost relative to results. Services can also be classified by their importance in the burden of disease of particular age and sex groups, and their cost-effectiveness for those groups(14) Ideally, services with these virtues will also be inexpensive, so that they can be applied to rge beneficiary populations and still imply reasonable total expenditures. However, there is no guarantee that low cost per life saved or healthy life year gained will mean low cost per person: some cost-effective interventions can be very expensive, with great variation Table 3. 1 Interventions with a large potential impact on health outcomes Examples of interventions Main contents of interventions Treatment of tuberculosis Directly observed treatment schedule(DOTS): administration of standard d short-course chemotherapy to all confirmed sputum smear positive cases of TB under supervision in the initial (2-3 months)phase Maternal health and safe motherhood interventions Family planning, prenatal and delivery care, clean and safe delivery so trained birth attendant, postpartum care, and essential obstetric care high risk pregnancies and complications Family planning Information and education; availability and correct use of contraceptives School health interventions Health education and nutrition interventions, induding anti-helminthic treatment, micronutrient supplementation and school meals Integrated management of Case management of acute respiratory infections, diarrhoea, malaria, childhood illness measles and malnutrition; immunization, feeding/breastfeeding ounselling, micronutrient and iron supplementation, anti-helminthic HIV/AIDS prevention Targeted information for sex workers, mass education awarenes ounselling, screening, mass treatment for sexually transmitted diseases, safe blood supply Treatment of sexually transmit- Case management using syndrome diagnosis and standard treatment ted diseases agorithm Immunization (EPI Plus BCG at birth; OPV at birth, 6, 10, 14 weeks: DPT at 6, 10, 14 weeks: HepB at birth, 6 and 9 months (optional); measles at 9 months; TT for women of hild prompt treatment)and sele preventive measures(e. g impregnated bed nets Tobacco control Tobacco tax, information, nicotine replacement, legal action Noncommunicable diseases Selected early screening and secondary prevention and injuries
Health Services: Well Chosen, Well Organized? 53 Combining calculations of the cost with measures of the effectiveness of interventions and using them to determine priorities is a very recent development. Early work using such techniques in developing countries looked mainly at the cost-effectiveness of specific disease control programmes (8–13). This type of work expanded following publication of the World development report by the World Bank in 1993 (14) and subsequent work by WHO (15). Table 3.1 provides examples of interventions that, if implemented well, can substantially reduce the burden of disease, especially among the poor, and do so at a reasonable cost relative to results. Services can also be classified by their importance in the burden of disease of particular age and sex groups, and their cost-effectiveness for those groups (14). Ideally, services with these virtues will also be inexpensive, so that they can be applied to large beneficiary populations and still imply reasonable total expenditures. However, there is no guarantee that low cost per life saved or healthy life year gained will mean low cost per person: some cost-effective interventions can be very expensive, with great variation Examples of interventions Treatment of tuberculosis Maternal health and safe motherhood interventions Family planning School health interventions Integrated management of childhood illness HIV/AIDS prevention Treatment of sexually transmitted diseases Immunization (EPI Plus) Malaria Tobacco control Noncommunicable diseases and injuries Table 3.1 Interventions with a large potential impact on health outcomes Main contents of interventions Directly observed treatment schedule (DOTS): administration of standardized short-course chemotherapy to all confirmed sputum smear positive cases of TB under supervision in the initial (2–3 months) phase Family planning, prenatal and delivery care, clean and safe delivery by trained birth attendant, postpartum care, and essential obstetric care for high risk pregnancies and complications Information and education; availability and correct use of contraceptives Health education and nutrition interventions, including anti-helminthic treatment, micronutrient supplementation and school meals Case management of acute respiratory infections, diarrhoea, malaria, measles and malnutrition; immunization, feeding/breastfeeding counselling, micronutrient and iron supplementation, anti-helminthic treatment Targeted information for sex workers, mass education awareness, counselling, screening, mass treatment for sexually transmitted diseases, safe blood supply Case management using syndrome diagnosis and standard treatment algorithm BCG at birth; OPV at birth, 6, 10, 14 weeks; DPT at 6, 10, 14 weeks; HepB at birth, 6 and 9 months (optional); measles at 9 months; TT for women of child-bearing age Case management (early assessment and prompt treatment) and selected preventive measures (e.g. impregnated bed nets) Tobacco tax, information, nicotine replacement, legal action Selected early screening and secondary prevention
The World Health Report between one health service and another for the same disease. this is clear in the case of malaria, where two interventions that are about equally cost-effective -chloroquine prophy laxis and two annual rounds of insecticide spraying-differ enormously in how much they would cost to apply to all the affected population of a low income African country (16). Cost differences are even greater for interventions against an infection. The reverse is also true: health interventions can be cost-ineffective even when they de not cost very much and are intended to benefit large numbers of people. For example, many service providers continue to rely on antibiotics to treat viral illnesses, even thoug this is known to be ineffective. Even in rich countries, there is a need to ensure that the main output of health services remains focused on effective and affordable public health and clinical interventions In low income countries, where the full range and cost of poss ble interventions significantly outstrip available resources, such wasteful practices deprive other patients of critical treatment. Cost-effectiveness analysis, then, is essential for identifying the services that will pro- duce the most health gain from available resources, but it has to be applied to individual nterventions, not broadly against disease or causes. This requirement means that a large set of interventions needs to be evaluated For all but the richest societies the cost and time quired for such an evaluation may be prohibitive. Moreover, such analysis, as currently practised, often fails to identify existing misallocation of resources because it focuses on the evaluation of new technologies and ignores the existing distribution of productive assets and activities (6) Intervention costs can also vary greatly from one country, context, and intervention mode another(17). A naive generalization could lead to serious mistakes in planning and implementing otherwise effective interventions. Even if they cover a relatively small number of interventions, studies in individual countries or populations are needed to avoid such errors In Guinea, for example, 40 interventions have been studied. These were chosen artly on the basis of more general studies elsewhere, but with detailed local information to confirm what would really be most appropriate in that country(18) Variations in cost and results among interventions are particularly relevant when a com bination of several interventions may be suitable against a particular disease. To take the case of malaria again, at low levels of health expenditure in a country with a high burden of the disease, case management and prophylaxis for pregnant women would be very cost- effective and affordable(16). With more resources available, impregnated mosquito nets could be added- they would prevent more cases but cost more per unit of health benef gained. A single estimate of cost-effectiveness of malaria control could lead to the wrong conclusion that malaria control is not affordable, for example if the estimate for a low in- ome country is based on a programme combining all technically feasible options In gen eral, the most cost-effective combination of services depend ds on the resources available That relation does not, of course, determine the appropriate level of expenditure on malaria control, which depends on what the country can afford, given its other health problems and priorities. In particular, there is no presumption that it should spend only the amount onsistent with one or more of the cheapest interventions. Spending more and using a mixed strategy might yield much greater health gains Misuse of cost-effectiveness analysis could also lead to a serious underestimate of the actual cost of control if the estimate were based on the costs and effectiveness of a single type of intervention but multiple interventions were used. Many factors may alter the ac- tual cost-effectiveness of a given intervention programme during implementation. Thes include: the availability, mix and quality of inputs(especially trained personnel, drugs, equip
54 The World Health Report 2000 between one health service and another, for the same disease. This is clear in the case of malaria, where two interventions that are about equally cost-effective – chloroquine prophylaxis and two annual rounds of insecticide spraying – differ enormously in how much they would cost to apply to all the affected population of a low income African country (16). Cost differences are even greater for interventions against an infection. The reverse is also true: health interventions can be cost-ineffective even when they do not cost very much and are intended to benefit large numbers of people. For example, many service providers continue to rely on antibiotics to treat viral illnesses, even though this is known to be ineffective. Even in rich countries, there is a need to ensure that the main output of health services remains focused on effective and affordable public health and clinical interventions. In low income countries, where the full range and cost of possible interventions significantly outstrip available resources, such wasteful practices deprive other patients of critical treatment. Cost-effectiveness analysis, then, is essential for identifying the services that will produce the most health gain from available resources, but it has to be applied to individual interventions, not broadly against disease or causes. This requirement means that a large set of interventions needs to be evaluated. For all but the richest societies, the cost and time required for such an evaluation may be prohibitive. Moreover, such analysis, as currently practised, often fails to identify existing misallocation of resources because it focuses on the evaluation of new technologies and ignores the existing distribution of productive assets and activities (6). Intervention costs can also vary greatly from one country, context, and intervention mode to another (17). A naive generalization could lead to serious mistakes in planning and implementing otherwise effective interventions. Even if they cover a relatively small number of interventions, studies in individual countries or populations are needed to avoid such errors. In Guinea, for example, 40 interventions have been studied. These were chosen partly on the basis of more general studies elsewhere, but with detailed local information to confirm what would really be most appropriate in that country (18). Variations in cost and results among interventions are particularly relevant when a combination of several interventions may be suitable against a particular disease. To take the case of malaria again, at low levels of health expenditure in a country with a high burden of the disease, case management and prophylaxis for pregnant women would be very costeffective and affordable (16). With more resources available, impregnated mosquito nets could be added – they would prevent more cases but cost more per unit of health benefit gained. A single estimate of cost-effectiveness of malaria control could lead to the wrong conclusion that malaria control is not affordable, for example if the estimate for a low income country is based on a programme combining all technically feasible options. In general, the most cost-effective combination of services depends on the resources available. That relation does not, of course, determine the appropriate level of expenditure on malaria control, which depends on what the country can afford, given its other health problems and priorities. In particular, there is no presumption that it should spend only the amount consistent with one or more of the cheapest interventions. Spending more and using a mixed strategy might yield much greater health gains. Misuse of cost-effectiveness analysis could also lead to a serious underestimate of the actual cost of control if the estimate were based on the costs and effectiveness of a single type of intervention but multiple interventions were used. Many factors may alter the actual cost-effectiveness of a given intervention programme during implementation. These include: the availability, mix and quality of inputs (especially trained personnel, drugs, equip-
Health Services: Well Chosen, Well Organized hent and consumables); local prices, especially labour costs; implementation capacity underlying organizational structures and incentives; and the supporting institutional frame work(17,19) All these obstacles imply that even on the sole criterion of cost-effectiveness, analysis of health system's potential for getting more health from what it spends needs to begin with the current capacities, activities and outcomes, and consider what steps can be taken from that starting point to add, modify or eliminate services. This is likely to have profound impli cations for investment if little can be changed simply by re-directing the existing staff, facili- ties and equipment(20) CHOOSING INTERVENTIONS: WHAT ELSE MATTERS? Cost-effectiveness by itself is relevant for achieving the best overall health, but not nec- essarily for the second health goal, that of reducing inequality Populations with worse than average health may respond less well to an intervention, or cost more to reach or to treat,so that a concern for distribution implies a willingness to sacrifice some overall health gains for other criteria. More generally, cost-effectiveness is only one of at least nine criteria that a health system may be asked to respect. A health system ought to protect people from financial risk, to be consistent with the goal of fair financial contribution. This means that the cost matters, and not only its relation to health results, whether money is public or private. A health system should strive for both horizontal and vertical equity-treating alike all those who face the same health need, and treating preferentially those with the greatest needs-to be consistent with the goal of reducing health inequalities. And it should assure not only that the healthy subsidize the sick, as any prepayment arrangement will do in part, but also that the burden of financing is fairly shared by having the better-off subsidize the less well-off. This generally requires spending public funds in favour of the poor. Figure 3. 2 Questions to ask in deciding what interventions to finance and provide Public good? Significant extemalities dequate demand? Catastrophic cost? Cost-effective? provide Finance publicly Source: Adapted from Musgrove P Public spending on health care: how are different criteria related? Health Policy 1999, 47(3): 207-223
Health Services: Well Chosen, Well Organized? 55 ment and consumables); local prices, especially labour costs; implementation capacity; underlying organizational structures and incentives; and the supporting institutional framework (17, 19). All these obstacles imply that even on the sole criterion of cost-effectiveness, analysis of a health system’s potential for getting more health from what it spends needs to begin with the current capacities, activities and outcomes, and consider what steps can be taken from that starting point to add, modify or eliminate services. This is likely to have profound implications for investment if little can be changed simply by re-directing the existing staff, facilities and equipment (20). CHOOSING INTERVENTIONS: WHAT ELSE MATTERS? Cost-effectiveness by itself is relevant for achieving the best overall health, but not necessarily for the second health goal, that of reducing inequality. Populations with worse than average health may respond less well to an intervention, or cost more to reach or to treat, so that a concern for distribution implies a willingness to sacrifice some overall health gains for other criteria. More generally, cost-effectiveness is only one of at least nine criteria that a health system may be asked to respect. A health system ought to protect people from financial risk, to be consistent with the goal of fair financial contribution. This means that the cost matters, and not only its relation to health results, whether money is public or private. A health system should strive for both horizontal and vertical equity – treating alike all those who face the same health need, and treating preferentially those with the greatest needs – to be consistent with the goal of reducing health inequalities. And it should assure not only that the healthy subsidize the sick, as any prepayment arrangement will do in part, but also that the burden of financing is fairly shared by having the better-off subsidize the less well-off. This generally requires spending public funds in favour of the poor. Yes No Figure 3.2 Questions to ask in deciding what interventions to finance and provide Yes No Yes No No Leave to regulated private market Yes Yes Yes No Finance publicly No Do not provide Yes No Source: Adapted from Musgrove P. Public spending on health care: how are different criteria related? Health Policy, 1999, 47(3): 207–223. Public good? Significant externalities? Insurance appropriate? Catastrophic cost? Beneficiaries poor? Cost-effective? Public? Private? Adequate demand?
The World Health Report Public money is also the principal, if not the only significant way to pay for public goods, interventions which private markets will not offer because buyers cannot appropriate all le benefits, and non-buyers cannot be excluded. The same is true for partly public goods with large extermalities-that is, spillovers of benefits to non-users. Private demand for such services will generally be inadequate Interventions of this sort are most important in communicable disease control, where treating one case may prevent many others, and especially where it is the environment, rather than identifiable individuals, that is treated nalysts and decision-makers also correctly argue that resource allocation decisions affect ing the entire health system must take into account social concems, such as a priority for the seriously ill and for promoting the well-being of fut rizes the choices for spending public or publicly mandated funds, showing how the differ- ent criteria should be considered sequentially and how they can be used to determine whether an intervention is worth buying or not. This way of setting priorities reinforces the emphasis on the two goals of health outcomes and financial faimess. It also emphasizes the importance of public health activities, by starting with interventions that are public or quasi-public go o. Ignoring these other criteria and using only disease burden and cost-effectiveness as a hod for determining priorities can lead to a"race for the bottom of the barrel"among advocates of different interventions, each trying to prove that their programme achieves a greater benefit or costs less than other programmes, sometimes without considering the full range of complicating factors. This often leads to underestimates of the real cost of programmes and their subsequent failure during implementation because of resource shor Too narrow an approach also ignores the important role that the public sector should be laying in protecting the poor and addressing insurance market failure- the tendency of insurance to exclude precisely those people who need it most, because they are at greater than usual risk of ill-health. Many families will be faced at some time with a health proble of low frequency for which there is an effective but high cost intervention. Those who can afford it will turn to the private sector for the needed care. But without some form of orga ized insurance this option is usually too expensive for the poor who will turn to public hospitals as a place of last recourse. Often this leads to inappropriate and excessive use of hospital care, and it undermines the financing function that health systems should be Actual health systems always deliver services that correspond to a variety of criteria. The frontier of the possible which defines relative performance reflects this fact, since it is based on actual outcomes relative to health expenditure and human capital. A health system designed and operated solely to pursue cost-effectiveness might be able to achieve much longer average life expectancy or more equality or both, but it would correspond much less to what people want and exp What makes it particularly difficult to set priorities among interventions and beneficiar- ies of health services is that the different criteria are not always compatible. In particular, efficiency and equity can easily be in conflict, because the costs of treating a given health problem differ among individuals, or because the severity of a disease bears little relation to e effectiveness of interventions against it or to their cost. Cost-effectiveness is never the only justification for spending public resources, but it is the test that must be met most often the beneficiaries are not poor, so that they can make their own judgements about the value of a particular purchase and the market can be left to supply it; or when protection from
56 The World Health Report 2000 Public money is also the principal, if not the only significant way to pay for public goods, interventions which private markets will not offer because buyers cannot appropriate all the benefits, and non-buyers cannot be excluded. The same is true for partly public goods with large externalities – that is, spillovers of benefits to non-users. Private demand for such services will generally be inadequate. Interventions of this sort are most important in communicable disease control, where treating one case may prevent many others, and especially where it is the environment, rather than identifiable individuals, that is treated. Analysts and decision-makers also correctly argue that resource allocation decisions affecting the entire health system must take into account social concerns, such as a priority for the seriously ill and for promoting the well-being of future generations. Figure 3.2 summarizes the choices for spending public or publicly mandated funds, showing how the different criteria should be considered sequentially and how they can be used to determine whether an intervention is worth buying or not. This way of setting priorities reinforces the emphasis on the two goals of health outcomes and financial fairness. It also emphasizes the importance of public health activities, by starting with interventions that are public or quasi-public goods. Ignoring these other criteria and using only disease burden and cost-effectiveness as a method for determining priorities can lead to a “race for the bottom of the barrel” among advocates of different interventions, each trying to prove that their programme achieves a greater benefit or costs less than other programmes, sometimes without considering the full range of complicating factors. This often leads to underestimates of the real cost of programmes and their subsequent failure during implementation because of resource shortages. Too narrow an approach also ignores the important role that the public sector should be playing in protecting the poor and addressing insurance market failure – the tendency of insurance to exclude precisely those people who need it most, because they are at greater than usual risk of ill-health. Many families will be faced at some time with a health problem of low frequency for which there is an effective but high cost intervention. Those who can afford it will turn to the private sector for the needed care. But without some form of organized insurance this option is usually too expensive for the poor who will turn to public hospitals as a place of last recourse. Often this leads to inappropriate and excessive use of hospital care, and it undermines the financing function that health systems should be playing. Actual health systems always deliver services that correspond to a variety of criteria. The frontier of the possible which defines relative performance reflects this fact, since it is based on actual outcomes relative to health expenditure and human capital. A health system designed and operated solely to pursue cost-effectiveness might be able to achieve much longer average life expectancy or more equality or both, but it would correspond much less to what people want and expect. What makes it particularly difficult to set priorities among interventions and beneficiaries of health services is that the different criteria are not always compatible. In particular, efficiency and equity can easily be in conflict, because the costs of treating a given health problem differ among individuals, or because the severity of a disease bears little relation to the effectiveness of interventions against it or to their cost. Cost-effectiveness is never the only justification for spending public resources, but it is the test that must be met most often in deciding which interventions to buy. And it can be set aside only when costs are low and the beneficiaries are not poor, so that they can make their own judgements about the value of a particular purchase and the market can be left to supply it; or when protection from