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Cost  &  Cost-­‐effec+veness  Analysis  for  RBF  

Logan  Brenzel,  Health  Economist  October  19,  2011  

•  Mo0va0on  for  cos0ng  and  CEA  •  Provide  some  useful  defini0ons  

•  Walk  through  an  example  

•  Discuss  data  collec0on  strategies  •  Present  sustainability/affordability  analysis  •  Discuss  next  steps  

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Overview  of  the  Presenta0on  

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Why  consider  cost  &    cost-­‐effec0veness  analysis  for  RBF?  

•  RBF  strategies  are  expensive  for  low-­‐income  countries  and  cannot  be  sustained.  –  Examine  affordability  and  sustainability  of  strategies  

•  There  are  cheaper  approaches  to  achieve  health  MDGs  and  improving  quality  of  care.  –  Undertake  cost-­‐effec0veness  analysis  of  strategies.  

•  RBF  mechanisms  will  increase  the  cost  of  services  –  Conduct  analysis  to  look  at  efficiency  changes  in  service  delivery  

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What  do  we  know  so  far?  

•  Very  few  studies  examine  costs  of  RBF  

•  Some  evidence  on  unit  costs  of  PBF  mechanisms  –  Cash-­‐Transfer  Ra0o:  Total  Cost/Transfer  Amount  

•  Knowledge  gap  on  cost-­‐effec0veness  &  sustainability  

•  Impact  evalua0ons  are  unique  opportunity  –  Rigorous  approach  to  data  collec0on  and  measurement  of  outcomes  

–  Cost-­‐effec0veness  ra0o:  Costs/Outcome  measurement  

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Country Year Cost/ Capita

CTR Source

Rwanda 2006 $0.49 0.37 Sidonie Uwimpuhwe, 2010.* 2007 $0.88 0.34 2008 $1.34 0.39 2009 $1.28 0.21

Average $1.00 0.33

Rwanda $2.00 CAAC Annual Report 2007.

Rwanda $0.24 0.12 Soeters, et al 2005. *

Afghanistan 2006/07 $3.78 Ameli O, et al 2008 Drugs $0.65

Burundi Pilot 0.75 Toonen, et al. 2010.

DRC Pilot 1.78 0.79 Toonen, et al. 2010

Unit  Costs  for  PBF  Interven0ons  

Point:  Variability  by  country  and  over  +me  

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0  

0.5  

1  

1.5  

2  

2.5  

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Year  1   Year  2   Year  3   Year  4  

Nicaragua   Mexico   Honduras  

Cash  Transfer  Ra0os  for  CCTs  

Source:  Caldes  and  Maluccio,  2004.  

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Cos0ng  defini0ons  

•  Cost=    value  of  resources  used  to  produce  a  good  or  service.  

•  Opportunity  cost  =  value  of  services  or  0me  foregone  – Equipment  and  vehicles  

– Volunteer  0me  

•  For  RBF,  costs  should  be  addi0onal  to  ongoing  health  systems  costs  

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Health  worker  0me  

Equipment  

Vaccines  &  Medicines  

Training  

Building  and  Overhead  

Social  Mobiliza0on  

-­‐  IEC  

Supplies  

Vehicles  and  Transporta0on  

     Iden0fica0on  of  costs  

SourceL  P.  Lydon,  WHO  (2006)  8  

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Iden0fica0on  of  Costs  

Record-­‐keeping  

Staff  Time  

Travel  and  wai0ng  0me  for  household  members  

Common  ways  of  examining  costs  

•  Rela0ve  to  output  –  Variable  costs:  varies  with  each  unit  of  output    –  Semi-­‐variable  costs:  varies  somewhat  with  output  –  Fixed  costs:  does  not  vary  with  output  

•  Rela0ve  to  frequency  –  Capital  costs:  durable  goods  las0ng  more  than  one  year  

–  Recurrent  costs:  ongoing  running  costs  •  Rela0ve  to  user  – Direct  costs:  incurred  directly  by  user  or  provider  –  Indirect  costs:  wider  social  costs  

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Common  ways  of  classifying  costs  

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Costs  for  RBF  by  Level  and  Category  

Data  Collec0on  

•  Cost  of  RBF  =  [Q  *  P  *  %  alloca0on]  •  Ensure  no  double-­‐coun0ng  of  costs  

•  Collect  informa0on  using  ques0onnaires  –  Document  reviews  –  Interviews  (par0cularly  around  0me  spent)  –  Retrospec0ve  or  could  be  prospec0ve  

•  Price  data  collected  from  a  more  centralized  source  –  Historical  vs  replacement  prices  

•  Donor  and  other  informa0on  collected  through  interviews  

Source:    This  is  where  your  source  copy  goes.   12  

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TOP-­‐DOWN  APPROACH  

Administra0ve  budget  and  expenditure  data  allocated  to  the  unit  of  analysis  (e.g.  ins0tu0onal  deliveries  and  other  MCH  services)  

BOTTOM-­‐UP  APPROACH  

Data  on  types  and  quan00es  of  inputs  collected  through  facility  and  other  types  of  surveys  

Measurement  of  Costs  

Op0ons  for  Data  Collec0on  

•  Stand  Alone  exercise  –  Advantages:  more  detailed  es0ma0ons  –  Challenges:    

•  0me  consuming  and  costly  •  may  interfere  with  other  survey  ac0vi0es  

•  Integrate  with  Impact  Evalua0on  –  Advantages:    

•  compare  treatment  areas  with  controls  •  incorporate  a  few  addi0onal  ques0ons  into  ques0onnaires  •  robust  measurement  of  outcomes  

–  Challenges:    •  selec0ng  a  sample  frame    •  cost  informa0on  less  detailed  

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Assessing  the  Value  of  Time  Spent  

•  Interviews  – Depends  upon  how  the  ques0on  is  phrased  – Actual  0me  (hours/mins)  vs.  %  of  0me  – Respondent:  head  of  facility  or  each  staff  member  

•  Diaries  – Prospec0ve  data  collec0on  tool  – Minimum  two  weeks  (Hawthorne  effect/fa0gue)  

•  Time-­‐mo0on  studies  – Perhaps  most  accurate,  but  costly  

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Cost-­‐effec0veness  Analysis  

•  Rela0ve  measure  

•  Focus  on  incremental  costs  

•  Calculate  an  Incremental  Cost-­‐effec0veness  Ra0o  

ICER  =  (Total  CostA  –  Total  CostB)/(OutcomesA  –  OutcomesB)  

         

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Cost  Es0ma0on   +   Impact  Evalua0on  

=   Cost-­‐effecr0veness  

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Outcome  Measures  

•  Outcome  measures  generated  from  the  IE  –  Cost  per  health  gain  (reduced  morbidity  or  mortality)  

•  Composite  measures  –  Cost/DALY  saved;  Cost/LY  Saved  

•  Health  interven0on  specific  –  Cost  per  fully  immunized  child  

–  Cost  per  safe  delivery  

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Category Control Percent Treatment Percent

Personnel $30,000 70.6% $60,000 50.6%

Drugs $3,000 7.1% $6,000 5.1%

Supplies $2,500 5.9% $5,000 4.2%

Per Diem $2,000 4.7% $4,000 3.4%

Op/Main $1,000 2.4% $2,000 1.7%

Promtion $0 0.0% $1,000 0.8%

Training $0 0.0% $2,000 1.7%

Comm $1,000 2.4% $2,000 1.7%

Printing $1,000 2.4% $2,000 1.7%

Performance-based payment $0 0.0% $30,000 25.3%

Subtotal Recurrent $40,500 95.3% $114,000 96.2%

Vehicles $1,000 2.4% $2,500 2.1%

Equipment $1,000 2.4% $2,000 1.7%

Subtotal Capital $2,000 4.7% $4,500 3.8%

Average Total Cost $42,500 100.0% $118,500 100.0%

Average Institutional Births $1,000 $5,000

Average Cost/Institutional Birth $42.50 $23.70

Average  Cost  per  Ins0tu0onal  Birth  

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Category Control Treatment Total Total Births 3,000,000 2,000,000 5,000,000 Rate Inst Deliveries 10.0% 50.0% Total Inst Deliveries 300,000 1,000,000 1,300,000 Percent Births 60.0% 40.0% 100.0% Maternal Deaths by Area 15,000 10,000 25,000 Effectiveness of Inst Del 30.0% 30.0% 90.0% Maternal Deaths Prevented 450 1,500 1,950 Cost per Death Averted 28,333 16,133 30,641

YLLs 413,522 275,682 689,204 Year of Life Saved 12,406 41,352 53,758 Cost/Year of Life Saved $1,028 $585 $1,111 DALYS 1,149,582 766,388 1,915,970 DALYs Saved 34,487 114,958 149,446 Cost/DALY Saved $370 $211 $400

Example:  Cost-­‐effec0veness  

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Category Treatment

Incremental Costs $11,450,000 Incremental Mat Deaths Prevented 1,050 ICER Maternal Deaths Prevented $10,905

Incremental Years of Life Saved 28,947

ICER Years of Life Saved $395.56

Incremental DALYs Saved 80,471

ICER DALYs Saved $142.29

Example:  Incremental  CE  Ra0os  

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Sustainability  and  Affordability  

•  Focus  on  cost  of  transfers,  bonuses,  and  addi0onal  systems  costs  

•  Analysis  of  financial  flows:  who  is  paying  for  what  •  Genera0on  of  indicators:  –  Total  cost  requirement  per  year  –  RBF  cost  as  a  %  of  GHE,  THE,  GDP  

•  Gap  analysis  between  requirements  and  available  financing  

•  Excel-­‐based  analysis  

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-­‐40,000,000  

-­‐30,000,000  

-­‐20,000,000  

-­‐10,000,000  

0  

10,000,000  

20,000,000  

30,000,000  

40,000,000  

50,000,000  

1   2   3   4   5   6   7   8   9   10  

Total  RBF  Cost   Total  Financing   Financing  Gap  

Example:  Graphical  Analysis  of  the  Financing  Gap  

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Indicator Control PBF PBF +

Demand

Total Cost $13,000,000 $25,000,000 $35,000,000

Cost/Capita $0.104 $0.20 $0.28

Deaths Averted 500 1,500 3,000

ICER/Death Averted $12,000 $6,667

DALYs Saved 30,000 120,000 300,000

ICER/DALY Saved $133 $122

Resource Requirements $30,000,000 $60,000,000

Requirements % GHE 7.0% 14.0%

Financing Gap ($ millions) $100 $150

Gap as a % of Requirements 35.0% 55.0%

Example:  Interpreta0on  of  Results  

Limita0ons  

•  Cos0ng  is  a  subjec0ve  exercise  – Alloca0on  of  joint  costs  – Need  for  standardized  assump0ons  for  data  collec0on  and  analysis  

•  Point  es0mates  can  be  misleading  – Driven  by  level  of  scale  which  can  change  over  0me  – Does  not  address  distribu0onal  aspects  –  CEA  a  rela0ve  measure-­‐  need  a  good  comparator  –  Sensi0vity  tes0ng  

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Other  Considera0ons  

•  Incorpora0on  of  quality  into  the  analysis  – Addi0onal  quality  reflected  in  costs  – Outcome  measures  could  be  adjusted  for  quality  as  well  

•  Rela0ve  comparators  – CEA  of  RBF  compared  to  other  health  interven0ons  •  Stand  alone  exercise  probably  more  appropriate  here  

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Next  Steps  

•  Global  Level  – Dras  Guidelines  –  peer  review  – Sample  ques0onnaires  – Training  guide  – Formats  for  data  analysis  (Excel  and  Stata)  

•  Country-­‐level  – Work  with  country  teams  to  integrate  cos0ng  &  CEA  into  surveys  

– Customize  survey  instruments  

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THANK  YOU!  

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