Informing scale-up and resource allocation: the use of economic analysis

Editorial Steering Committee

doi: 10.1097/01.aids.0000327617.93737.82
Section I: Informing Scale-up and Resource Allocation
Author Information

*Please see Editorial for members of the Editorial Steering Committee.

Correspondence to Richard Marlink, Harvard School of Public Health, Boston, MA, USA. Tel: +1 617 432 4114; fax: +1 617 432 4545; e-mail:

Article Outline

The papers in this section address a subset of the challenges for policymakers and planners that are critical to achieving universal access to comprehensive HIV prevention, treatment and care. These issues were posed in the 2006 ‘Making the money work’ the Joint United Nations Programme on HIV/AIDS (UNAIDS) Annual Report [1]. Some of the topics include the successful mobilization of financial resources to sustain the rapid expansion of prevention, treatment and care programmes in developing countries, the strategic placement of labor, capital and financial resources needed to scale up programmes in developing countries, and the efficient implementation of alternative strategies identified by sound and practical research methodology to achieve the maximum positive impact on HIV-infected populations. The following papers demonstrate how economic analysis may be able to assist in overcoming these challenges and it can inform programme scale-up and resource allocation decisions.

Although there is an increasing international commitment to providing universal access to treatment and care to all HIV-infected persons, decision makers who support HIV/AIDS programme expansion are concerned that recent goals will not be achieved as a result of decreases in both pledges and financial commitments. In the first paper in this section, Galágarra and Bertozzi use economic theory to examine the factors that influence donors' decisions to invest in international HIV/AIDS funding agencies. Postulating that donors act as rational investors, the authors find that ‘resource mobilization’ attributes, such as a country's ability to strengthen health systems capacity and mobilize new financial resources, have the most influence on contribution levels. The second article, by Haacker, challenges early assumptions that large-scale international aid could have a negative impact on a country's macro-economy. The author's data suggest that HIV/AIDS spending has had little negative impact on the economies of those countries that have most benefited from donor assistance. He further concludes that external donor funding is a key factor in enabling countries to meet the increased demand for health services.

The significant reduction in the costs of antiretroviral drugs has enabled the recent success in scaling up antiretroviral therapy programmes in developing countries. Infrastructure with sufficient manpower and functioning drug procurement systems is, however, required to increase and sustain scale-up efforts [2]. Although many non-monetary considerations, particularly how to scale up care equitably, must be included in decision making, accurate costing and cost-effectiveness analyses will be vital to scaling up in resource-poor settings if it is to achieve maximum population benefit. Economic analysis and theory are used in papers by Kumaranayake, Dandona et al. and Cleary et al. to demonstrate and predict the micro-level impacts of scaling up HIV-related programmes.

In a systematic review of 34 studies, Kumaranayake illustrates how cost varies with the scale of implementation of different HIV/AIDS interventions. She concludes: ‘scale and the volume of activities are key drivers in determining costs, consistent with standard economic theory’. The author further postulates that knowing the actual shape of average and marginal cost curves will assist in exploiting any economies of scale. Dandona et al. similarly show variations in cost with scale for voluntary counselling and treatment and sex worker interventions in Andhra Padesh, India. Although the analysis found that scale did have a significant impact on unit costs, the unit cost of voluntary counselling and treatment interventions declined with scale-up, whereas the unit cost of sex worker interventions increased.

The pragmatic usefulness of cost-effectiveness analysis for scale-up decisions is often questioned. Policymakers need a variety of information including cost data to inform HIV/AIDS prevention and treatment expansion decisions, and cost data can help answer critical questions of affordability. When scaling up access to treatment, Cleary et al. recommend an approach that takes into consideration not only effectiveness and efficiency but also affordability. Although the paper does not diminish the need for cost-effectiveness analysis, it recognizes that such analyses alone are seldom useful to policymakers. Instead, the authors propose an approach that assesses the available budget and the known effectiveness of treatment strategies in order to develop a recommendation that is both evidenced based and financially feasible.

Policymakers are best able to identify alternative, efficient strategies when using tools that consider goals within the guidelines of national objectives and strategic plans. Papers by Bollinger, Moatti et al., Bautista-Arredondo et al., and Beck et al. examine how economic evaluations, such as cost-effectiveness analysis, can be used to assist policymakers. The paper by Bollinger examines the impact of prevention programmes on a number of behaviors that are important to local and national governments. Summarizing a compilation of prevention evaluation studies, the author concludes that interventions are most effective when the target audience is small and homogenous.

Moatti et al. argue that the comparison of cost-effectiveness ratios cannot effectively guide policy decisions on HIV/AIDS resource allocation, particularly for antiretroviral therapy. Instead, the authors suggest the use of cut-offs, such as that proposed by the Commission for Macroeconomics and Health, the proportion of gross domestic product or other tools, such as cost-benefit analysis. This approach, however, may also be criticized as no less problematical given the arbitrary nature of the Commission for Macroeconomics and Health's cut-off. Furthermore, the use of cost-benefit analysis has its own methodological challenges, many of which may introduce methodological and ethical concerns that are even more complex than those in cost-effectiveness analysis. Although Moatti et al. are correct in criticizing cost-effectiveness analysis for failing adequately to take into consideration issues of scale and equity, cost-benefit analysis faces this same criticism.

Bautista-Arredondo et al. stress to decision makers the importance of interventions that not only are produced efficiently but target the populations most in need. The authors propose a conceptual framework to examine how efficiently resources are allocated based on three dimensions: cost-effectiveness, targeting efficiency and technical efficiency. The authors also demonstrate how political and cultural barriers may impede the scaling up process for HIV programmes. Costs, such as information costs and cultural costs, must also be considered in economic analyses. By using an example from Singapore, Beck et al. discuss the importance of the collection of both cost and cost-effectiveness data to decision making. They note that issues of efficiency, equity and acceptability are as important for programming and resource allocation decisions as the effectiveness of the interventions.

The papers in this section demonstrate that economic analyses can play a key role in the achievement of prevention and treatment goals. Analyses, however, should extend beyond the standard framework of cost-effectiveness analysis. Caution must be exercised by policymakers and researchers and care taken to interpret results within the context of the political climate, national agenda and social norms of a country. Although expanded economic evaluation data should become available in the future, evaluations should also include affordability and sustainability considerations, equity and how cost efficiencies may change with scale.

Conflicts of interest: None.

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1. UNAIDS. UNAIDS Annual Report 2006: Making the money work. Geneva: UNAIDS; 2006.
2. Curran J, Debas H, Arya M, Kelley P, Knobler S, Pray L (editors). Scaling up treatment for the global AIDS pandemic: challenges and opportunities. Institute of Medicine. Washington, DC: The National Academies Press; 2004.
© 2008 Lippincott Williams & Wilkins, Inc.