Including Financial Protection and Equity in Health CEAs

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GHME 2013 Conference
Session: New directions in cost-effectiveness analysis
Date: June 16 2013
Presenter: Dean Jamison
Institute:
Center for Disease Dynamics, Economics & Policy
University of Washington Department of Global Health

Published in: Economy & Finance, Business
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Including Financial Protection and Equity in Health CEAs

  1. 1. www.dcp-3.org info@dcp-3.org Including Financial Protection and Equity in Health CEAs Dean T. Jamison University of Washington, Department of Global Health Global Health Metrics and Evaluation Conference June 16, 2013 17/18/2013
  2. 2. Plan for this Talk • Conceptual background • Public finance of TB treatment of India 7/18/2013 2
  3. 3. Outcomes of a Policy 7/18/2013 3 • Health gains (burden of disease averted) • Financial protection benefits (“insurance” to households from medical impoverishment) • Income consequences for households • Distributional consequences (across income groups, ethnic subgroups or between males and female)
  4. 4. Evaluation of Policy: Extended Cost-Effectiveness Analysis (ECEA) 7/18/2013 4 • Evaluation of interventions and platforms (CEA) (e.g. DOTS as an intervention surgical capacity at a district hospital as a platform) • Evaluation of Policies
  5. 5. Policies • Taxes and subsidies (e.g. universal public finance; tobacco taxes) • Laws and regulation • Investment in capacity • Information and education 7/18/2013 5
  6. 6. Financial Risk Protection 1 • Enthoven (1987) stressed importance of FRP as a health system objective. • Metrics include: • Incidence of impoverishment, excessive spending, forced borrowing and forced asset sales (Wagstaff reviews results) • Money-metric value of insurance 7/18/2013 6
  7. 7. Financial Risk Protection (2) Insurance 7/18/2013 7 • Risk aversion Individuals value protection from the risk of uncertain adverse events y = individual income r = coefficient of relative risk aversion • Approach consistent with recent work McClellan & Skinner. The incidence of Medicare. Journal of Public Economics 2006 Smith. Incorporating financial protection into the economic evaluation of health technologies. Health Economics 2012
  8. 8. 7/18/2013 8 Financial Risk Protection (3) • Money-metric value of insurance provided Gamble with: - disease occurs at incidence p (depending on income) - has treatment cost c • For 1 individual, money-metric value of insurance = expected value - certainty equivalent of gamble
  9. 9. ECEA Structure 7/18/2013 9 Policy Instrument Health gains (e.g. TB deaths averted) Household expenditures (e.g. TB-related costs averted) “Insurance” benefits (e.g. financial protection from TB-related costs) Poorest 2nd Poorest Middle 2nd Richest Richest
  10. 10. Universal public finance of TB treatment in India Work undertaken with Stéphane Verguet and Ramanan Laxminarayan 7/18/2013 10
  11. 11. Tuberculosis in India 7/18/2013 11 • TB epidemiology Annual incidence of 100 per 100,000 (sputum smear-positives) (WHO 2012) 4 times higher incidence among the poor (Muniyandi et al. 2007) Case fatality rate of untreated case 0.32 (WHO 2012) • TB treatment (DOTS) Cost of $100 per patient Effective at 90% (WHO 2012) • Current DOTS coverage - average of 71% - bottom income quintile: 47% - top income quintile: 95%
  12. 12. UPF for TB Treatment Over 1 Year for 1 Million Indians 7/18/2013 12 TB deaths averted Poorest 2nd Poorest Middle 2nd Richest Richest Treat TB-infected with DOTS DOTS coverage (~ 90%) DOTS effectiveness (~ 90%) TB costs averted for households Financial protection benefits
  13. 13. Benefits over 1 Year with UPF for 90% coverage of TB Treatment (per million population) 7/18/2013 13 Outcome Total Income Quintile I (Poorest) Income Quintile II (Poorer) Income Quintile III (Middle) Income Quintile IV (Richer) Income Quintile V (Richest) 1 TB deaths averted 80 40 25 12 3 0 2 Private expenditures crowded out $29,000 6,000 6,000 7,000 6,000 4,000 3 Money- metric value of insurance $9,000 5,000 2,000 1,000 1,000 0 Total cost of public program of $65,000
  14. 14. Coping Mechanisms: Borrowing 7/18/2013 14 • Without UPF, when faced with costly treatment, the poor borrow from peers or sell assets • 50% of poor households in India borrow money/sell assets at high interest rates (Kruk et al. 2009) • Assume the poor take a loan over 10 years at annual interest rate of 20% to subsidize TB treatment
  15. 15. Benefits over 1 Year for 1 Million Indians with UPF for TB Treatment 7/18/2013 15 Outcome Total Income Quintile I (Poorest) Income Quintile II (Poorer) Income Quintile III (Middle) Income Quintile IV (Richer) Income Quintile V (Richest) 1 TB deaths averted 150 100 50 0 0 0 2 Private expenditures crowded out $70,000 0 15,000 25,000 20,000 10,000 3 Money- metric value of insurance $10,000 0 3,000 4,000 2,000 1,000 Total cost of public program of $130,000
  16. 16. Comparative Analysis – Ethiopia Stéphane Verguet, Zachary Olson, Joseph Babigumira, Margaret Kruk, Kjell Arne Johansson, Carol Levin, Rachel Nugent, Clint Pecenka, Mark Shrime, David Watkins, Dean Jamison 7/18/2013 16
  17. 17. Ethiopia 7/18/2013 17
  18. 18. 7/18/2013 18 Thank you Contact Information: Djamison@uw.edu

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