Intervention Cost, Cost-Effectiveness, and Economic Benefits
The highly emotional and sensationalized climate of disaster response has long prevented the adoption of a cost-effectiveness approach in decision making. When survival of both people and political institutions is threatened, perceptions and visibility tend to prevail over facts and analysis, resulting in a lack of evidence-based studies on costs and benefits.
The willingness to spend hundreds of thousand of dollars per victim rescued from a collapsed building in a foreign country is a credit to the solidarity of the international community, but it also presents an ethical issue when, once the attention has shifted away, modest funding is unavailable for the mid-term survival of tens of thousands of victims.
Cost-Effectiveness of Selected Humanitarian Interventions
Emergency health interventions are more costly and less effective than time-tested health activities. Improvisation and rush inevitably come with a high price. The preferential use of expatriate health professionals; the emergency procurement and airlifting of food, water, and supplies that often are available locally or that remain in storage for long periods of time; and the tendency to adopt dramatic measures contribute to making disaster relief one of the least cost-effective health activities.
Search and Rescue
Few developing countries have established the technical capacity to search for and attend to victims trapped in confined spaces in the event of the collapse of multistory buildings. Industrial nations routinely dispatch search and rescue (SAR) teams. Costs are high and effectiveness is reduced by delayed arrival and quickly diminishing returns. Following the 1988 earthquake in Armenia, in the former Soviet Union, the U.S. SAR team extracted alive only two victims at a cost of over US$500,000. In Turkey in 1999, 98 percent of the 50,000 people pulled alive from the rubble were salvaged by relatives and neighbors. In Bam in 2003, the absence of high-rise and reinforced concrete buildings ruled out the need for specialized teams. Nevertheless, according to UN statistics, at least US$2.8 million was spent on SAR teams. An alternative solution consists of investing these resources in building the capacity of local or regional SAR teams—the only ones able to be effective within hours—and training local hospitals to dispatch their emergency medical services to the disaster site.
Field Hospitals
The limited lifesaving usefulness of foreign field hospitals has been discussed. Again, the lessons learned from the Bam earthquake are clear. The international community spent an estimated US$10.5 million to dispatch approximately 10 mobile hospitals,3 which arrived from two to five days after the impact, long after the last casualty had been evacuated to other Iranian provinces. This delay alone, hard to reduce further, rules out any significant contribution to immediate trauma care and led the hospitals to compete for routine outpatient care with the teams of Iranian volunteers from across the country. A few of the mobile hospitals, better prepared to meet nontrauma needs and to stay much longer than the usual two to three weeks, have been invaluable. No data are available on the number of lives actually saved by mobile hospitals (that is, lives that would not have been saved by local means). Less understood are the negative effects of such hospitals on local health services, which are often marginalized and discredited for their lack of technology and sophistication but which must cope once the external facility leaves.
The cost of mobilizing a mobile hospital for a few weeks often exceeds US$1 million, funds that would be more productive in the construction and equipping of a simple but sturdy temporary facility. Such an approach was adopted by the U.S. Army Southern Command in Wiwili, Nicaragua, in the aftermath of Hurricane Mitch. In the case of Bam, Iran, the cost of rebuilding the entire primary and secondary health care facilities and teaching institutions was estimated by the government of Iran to be US$10.75 million, an amount very similar to that expended for the dispatch of field hospitals from the international community. Guidelines for the use of foreign field hospitals are available from WHO and PAHO (2003).
In-Kind Donations
Unsolicited donations of inappropriate medical supplies not only are of limited use, but often cause serious logistic, economic, and political problems in the recipient country. Warehousing those supplies and, in many instances, building facilities (incinerators, for example) for the safe disposal of pharmaceutical donations diverts humanitarian funds from more effective uses. Recipient countries collectively share part of the responsibility by not clearly indicating what they do not want to receive and by not speaking out once inappropriate items arrived.
Disease Prevention and Control
Postdisaster interventions in surveillance and control of communicable diseases should focus on strengthening existing programs. Benefits will outlive the crisis. Improvised mass immunizations (instead of improved sanitation and public awareness) and vector control by aerial spraying or fogging (instead of breeding-site reduction or waste disposal) are just two examples of wasteful managerial decisions.
Shelters
Tent cities should be a last resort. Family-size tents may be expensive and do not last long. Establishing large settlements is easy, but such settlements are difficult to sustain and nearly impossible to terminate. They come with their own sanitation problems and social shortcomings (lack of privacy, loss of family identity, and loss of empowerment). Distributing construction material (or, preferably, cash subsidies) is more cost-effective and tailored to the needs and priorities of end users.
Cash Assistance
Developed societies long ago abandoned the distribution of in-kind relief goods and services to their nationals in favor of direct financial assistance in the form of subsidies, grants, or tax relief. The individual is free to determine actual priorities and to seek the most cost-effective source of services (shelter, medical, food, or other). It is therefore surprising that external assistance from these same countries remains focused on the costly delivery of predetermined services or commodities.
The most immediate lifesaving needs can be addressed only locally with existing resources and capacity. No cash contribution will meet those immediate needs. Beyond the acute phase, in many countries with market economies, most other services and goods are easily procured by those with financial means, suggesting that income availability is often the single limiting factor in rehabilitation.
Undoubtedly, this approach would affect considerably the type (and number) of humanitarian actors by transferring power and decision making to the local beneficiaries and relying on local economic forces for delivery to the end user. It may also bring its own set of problems (and abuses), though perhaps that is a small cost, considering the economic and social benefits of the most interested party—the victim—being in charge.
Cost-Effectiveness of Prevention and Mitigation
The social benefits of making hospitals and water systems more resilient to the effects of natural hazards are recognized but too rarely applied. On the economic side, mitigation also increases the investment capacity in the health sector by preventing losses and the need for reconstruction (PAHO and UN/ISDR 1996; Bitran 1996).
The most compelling case for the cost-effectiveness of mitigation can be made during the planning phase for new installations, when costs of additional structural safety are minimal. Although the social benefits of prevention and risk management are more evident in the health sector than in others, further studies are needed to provide decision makers with quantified parameters of the economic benefits brought about by investment in risk management and disaster reduction.
PAHO and UN/ISDR (1996) studies indicate that such increased investment fluctuates between 4 and 8 percent of a hospital's local construction cost. When the value of services lost is added to the infrastructure loss, the additional investment is reduced to between 2 and 4 percent of direct and indirect losses observed. Even though this is a gross estimate that requires further research in other regions and types of health facilities, the figure is ratified by the estimated cost of reinforcement, which fluctuates but averages between US$2,000 and US$5,000 per bed, compared with the average cost of a new hospital bed of between US$100,000 and US$150,000 (at 1996 prices).
Prevention of chemical and radiation accidents can be a highly cost-effective expense that is normally absorbed by the respective industries. Respect for existing norms in the use of radiotherapy and diagnostic equipment and, once such equipment is decommissioned, its proper disposal reduces DALYs from accidents at a modest cost.
Mobilization of Resources
Funding for preparedness and response programs follows rules and procedures that are distinct from those applicable to development projects. Most donors maintain a specific office or department for humanitarian affairs with a separate budget line. Procedures are also streamlined for quick response to unexpected situations. Processing a request takes a matter of days in emergencies and takes months for preparedness or mitigation projects, but it can take years in typical development projects negotiated with donors or financial institutions.
From a ministry of health point of view, competition for disaster resources is with other sectors or humanitarian organizations, not within the sector (as it would be, for instance, with malaria or tuberculosis control projects).
Funding for Preparedness
"By strengthening our public health planning for natural disasters and disease outbreaks, we will be in a better position to care for our populations, regardless of the type of hazard that confronts our health departments" (Rottman 2003, 1). This message, addressed to the public health community in the United States, is even more pertinent for developing countries. Most humanitarian offices in more developed countries allocate a modest but increasing proportion of their funds for predisaster capacity building. The capacity of the ministries of health to secure directly nonreimbursable funding depends on the following:
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The existence of an established disaster program within the ministry, demonstrating a long-term commitment to health disaster preparedness.
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An ongoing dialogue with local representatives of donors and their prior involvement in disaster-related activities or meetings of the health sector.
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A realistic projection of concrete activities, taking into consideration the efforts of others, especially NGOs. One- or two-year training or capacity-building projects are more likely to be supported than those of longer duration that have recurrent costs or involve the purchase of equipment (radios, vehicles).
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The technical endorsement and support of WHO and other UN agencies.
A multisectoral preparedness component is also increasingly included in loans negotiated in the aftermath of disasters. Intended to strengthen the capacity of the civil protection agency, the funding is no substitute for local political commitment to assume recurrent expenses, the only guarantee of sustainability.
Resources for Emergency Response
The amount of external resources available for response, financial or material, is influenced by the type of hazard, geopolitical considerations, and the number of deaths (rather than that of survivors in need of assistance). Funding is channeled mostly through humanitarian NGOs, the Red Cross system, or multilateral organizations, rather than through national governments. Consequently, the priority of the health authorities, rather than to seek direct contributions to the ministry, should be to ensure that health needs are properly identified and adequately covered by those agencies benefiting from the donations. Ministries of health often can obtain indirect financial support for their own activities through UN projects.
Concentrating on several key factors will improve the flow of external resources toward health priorities:
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Issuing a rapid and reliable assessment of what is needed and what is not needed for the emergency response, rather than waiting for a detailed assessment of the physical damage.
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Focusing on tomorrow's emergency health problems. External response is unable to address today's short-lived problems.
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Keeping a long-term view. Funding for emergency response is limited to a few months, whereas the health problems caused by the disaster will stay much longer. Projects should offer sustained benefits beyond their conclusion.
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Recognizing shortcomings in governance when in contact with the many bilateral fact-finding or assessment missions coming to the disaster site.
Funding for Reconstruction
Funding for reconstruction is multisectoral and is often coordinated by an international financing institution (global or regional), together with a consortium of large donor countries. The health sector will compete with other social priorities and the "productive" sectors in an arena where the health burden (measured in DALYs) does not carry the same weight as economic factors. Success will depend on an exhaustive monetary valuation of the health damage, rapid formulation of projects, political support from the country's highest authorities, and technical support and endorsement of specialized UN agencies and larger NGOs.
Funding for Mitigation of Damage
Protecting the national capital investment of the health sector is primarily the responsibility of the country at risk. Development agencies or financial institutions may contribute only marginally to the actual cost of retrofitting installations or improving the design of new facilities.
Modest funding for pilot or demonstration prevention programs may be available from both the humanitarian and the development sources of donor countries. Humanitarian offices may support promotion of the concept, development of guidelines or studies on vulnerabilities, and training.
The health sector will benefit from close contacts with financial institutions, the ministry of foreign affairs, and other national ministries. Negotiations to ensure that new installations are able to withstand disasters must be initiated at the earliest opportunity, and the corresponding additional costs should be considered in the earliest stages of the project.
