1. Investing in Health

A starting point for cost-effectiveness analysis is to observe that health systems have two objectives: (a) to improve the level and distribution of health outcomes in the population and (b) to protect individuals from financial risks that are often very substantial and that are frequent causes of poverty. Financial risk results from illness-related loss of income as well as expenditures on care; the loss can be ameliorated by preventing illness or its progression and by using appropriate financial architecture for the system.

For the purposes of this book, we consider two classes of resources to be available: financial resources and health system capacity. To implement an intervention in a population, the system uses some of each resource. Just as some interventions have higher dollar costs than others, some interventions are more demanding of system capacity than others. In countries with limited health system capacity, it is clearly important to select interventions that require relatively little of such capacity. Human resource capacity constitutes a particularly important aspect of system capacity, discussed in chapter 71 and in a recent report of the Joint Learning Initiative (2004).

Although in the very short run little tradeoff may exist between dollars and human resources or system capacity more generally, investing in the development of such capacity can help make more of that resource available in the future. Chapter 3 discusses different types of health system capacity and intervention complexity, and it points to the importance of and potential for responding to low capacity by selecting interventions that are less demanding of capacity and by simplifying interventions. Chapter 3 also explores the extent to which financial resources can substitute for different aspects of system capacity (see also Gericke and others 2003). An important mechanism for strengthening capacity, inherent in highly outcome-oriented programs, may simply be to use it successfully—learning by doing. Several chapters discuss capacity strengthening at different levels of the clinical system, in public health, and in health research and development.

The literature on economic evaluation of health projects typically reports the cost per unit of achieving some measure of health outcome—quality-adjusted life years (QALYs) or DALYs or deaths averted—and at times addresses how that cost varies with the level of intervention and other factors. Pritchard (2004) provides a valuable introduction to this literature. DCP1 reported such cost-effectiveness findings for a broad range of interventions; DCP2 does so as well. DCP2 authors were asked to use methods described in Jamison (2003); chapter 15 discusses actual implementation. Cost-effectiveness calculations provide important insights into the economic attractiveness of an intervention, but other considerations—such as consequences for financial protection and demands on health system capacity—are also relevant.

DCP2 also makes a preliminary attempt to accumulate information about the extent to which interventions place demands on health system capacity; this information is qualitative. DCP2 provides only an initial effort, but qualitative information does provide helpful input to policy. Kim (2005) develops a more quantitative approach in an analysis dealing with cervical cancer. Much less has been done on the extent to which specific interventions provide financial protection for patients and their families.

Source: Author.