Commission Meeting 2, Day 2 The FEWG Report Gavin Yamey MD MPH, FEWG Chair

1. Commission Meeting 2, Day 2 The FEWG Report Gavin Yamey MD MPH, FEWG Chair

2. Finance and Economics

3. Primary researchers Blake Alkire, Mark Shrime, Tom Weiser, Alex Haynes, Steve Bickler, Caris Grimes, Chris Lavy, Steve Jan, Rebecca Ivers FEWG members Consultants Research assistants

6. Surgical condition Financial risk

7. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA Primary research [4 studies] is integrated throughout presentation

8. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

9. Make economic case for global surgery • Identify financing mechanisms to support equitable access to quality services with financial risk protection (FRP)

10. Burden Epidemiological transition Economic costs & benefits SDGs

11. Proposed SDG 3: Attain Healthy Life for All at All Ages 3.1 By 2030 reduce the maternal mortality ratio to less than 40 per 100,000 live births 3.2 By 2030 end preventable newborn, infant and under-five deaths 3.3 By 2030 end HIV/AIDS, tuberculosis, malaria, and neglected tropical diseases 3.4 By 2030 reduce by x% premature deaths from non-communicable diseases (NCDs),reduce deaths from injuries, including halving road traffic deaths, promote mental health and wellbeing, and strengthen prevention and treatment of narcotic drug and substance abuse 3.5 By 2030 increase healthy life expectancy from all by x% 3.6 Achieve universal health coverage (UHC), including financial risk protection, with particular attention to the most marginalized and people in vulnerable situations 3.7 By 2030 ensure universal availability and access to safe, effective and quality affordable essential medicines, vaccines, and medical technologies for all 3.8 Ensure universal access to sexual and reproductive health for all 3.9 By 2030 decrease by x% the number of deaths and illnesses from indoor and outdoor air pollution Mortality reduction Healthy life attainment Universal health coverage

12. Surgery and the SDGs

13. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

14. Economic Arguments • Surgical conditions • have a large micro/macroeconomic impact • affect economically productive age groups • Out-of-pocket costs can be catastrophic/impoverishing • Many surgical interventions are highly cost-effective

15. Macroeconomic Impact

16. New Study of Macroeconomic Impact Primary Research # 1: Alkire et al • ▪ Hypothesis: Macroeconomic impact in LMICs likely to be substantial • ▪ Methods: Human capital approach and VSL approach to quantify economic impact in 6 LMIC super-regions; BoD from GBD2010 • ▪ Preliminary results: • $10 trillion in 2010 ($6 trillion mortality, $4 trillion morbidity) • Largest mortality contributors: cardiovascular ($2.2 trillion), cancers ($1.8 trillion), injury ($1.4 trillion) • Largest morbidity contributors: MSK ($1.6 trillion), injury ($0.6 trillion), other NCDs ($250 billion)

17. New Study of Demographic Groups Primary Research # 2: Grimes & Lavy ▪ Hypothesis: Surgical conditions in LMICs disproportionately affect those of an economically productive age ▪ Methods: (1) Systematic review (hospital, population) (2) Primary hospital admissions data (Sierra Leone, Malawi) ▪ Preliminary results: Children and young adults are demographic groups most affected; highest % of admissions: female patients aged 15-40 y

18. Microeconomic Impact: Characteristics of Surgical Treatment • Surgical treatment has unique characteristics that affect microeconomic impact: • Often unpredictable and uncertain • Often no time to save or plan ahead • Often expensive • “Do or die” • Cost of services (including user fees, medications, travel, food) is a barrier to care • Access is worse among patients in lower SES groups • Medical impoverishment is common

19. Key Research on Medical Impoverishment Two most important studies on impoverishment due to medical expenses in LMICs ❶ 150 M people/y suffer financial catastrophe [devote > 40% of non-food spending] (Xu et al, 2007) ❷ About 1 in 4 households borrow money or sell items to pay OOP costs [probably an underestimate; excludes travel and lost wages] (Kruk et al, 2009)

20. Medical Impoverishment from Surgery ▪ Two previous studies didn’t break down costs into medical vs. surgical ▪ Poor households usually can’t save enough for surgery –> shocks 1 2 1/3 of women in Burkina Faso with severe pregnancy complications have to borrow money to pay hospital bills (Storeng et al, 2008) 3

21. New Study on Rates of Impoverishment from OOP Costs (Hamid et al, 2014) ▪ Primary data: 3,941 households, 120 villages, 7 districts ▪ Overall, OOP costs push 3.4 % households into poverty/y ▪ Rates for surgery much higher

22. Two LCoGS Studies on OOP Costs Primary Research # 3: Shrime et al ▪ Hypothesis: OOP expenses to cover indirect and direct costs of seeking surgical care are likely to be (a) substantial, and (b) associated with impoverishment ▪ Methods: Systematic review of studies reporting direct medical and non-medical costs related to a surgical admission or procedure; quantification of rate of, and variables associated with, catastrophic health expenditures/impoverishment ▪ Status: lit review/data extraction completed; 106, 108 patients; 26 studies: 14 RMH, 4 RTIs, 5 cancer, 1 diabetes, 2 other injuries

23. Two LCoGS Studies on OOP Costs Primary Research # 4: Jan et al ▪ Hypothesis: Cancer in SE Asia has a major socioeconomic impact on patients/households, and affects quality of lifeand mental health ▪ Methods: Longitudinal cohort study of 10,000 hospital patients with 1st time cancer diagnosis [ACTION study] at baseline, 3 and 12 months in 8 SE Asian countries (public/private hospitals, cancer centers). Primary outcome: incidence of financial catastrophe at 12 months (OOP expenses > 30% household income). Secondary outcomes: Illness-induced poverty, QoL, distress, economic hardship, survival, disease status ▪ Status: For LCoGS, data on 5000 patients undergoing Sx will be analyzed

24. Surgery is Highly Cost-Effective Chao et al, 2014

25. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

26. 3. Financing: Funding flows to surgery

27. Financing Approaches: Risk Pooling 3. Financing: Funding flows to surgery Essential for Sx because illness is unpredictable/cannot save/expensive Risk pooling promotes FRP and equity Services should mostly be publicly financed, ideally with everyone in the pool (rich and poor, formal and informal sector) » private insurance excludes poor » 2-tier system is inefficient and inequitable

28. Strategic Purchasingfor Sx ▪ Most surgical “episodes” are defined, with a single admission, so could pay fixed payment for a defined surgery » incentive: providers keep any savings ▪ Complement with element of P4P, e.g. X% of payment is withheld and paid on P4P basis; must link performance indicators to process/outcome quality measures ▪ Could set payment rate: cost out package of services in clinical protocol for delivery 1 surgical admission + use adherence to protocol to measure performance ▪ Can adapt payment for other types of surgery e.g. package to include post-op services ▪ Rwanda, Burundi, Cambodia use RBF to promote deliveries in facilities

29. Sources of Financing INTERNATIONAL DOMESTIC • Domestic economic growth • Taxes: general tax revenue, payroll tax, taxes on “bads” (e.g. cigarettes), tax extractive industries multinational corporations (e.g. Publish What You Pay, Extractive Industries Transparency Initiative) • Removal of fossil fuel subsidies (SSA: 3·5% of GDP on post-tax basis subsidizing fossil fuels) • Efficiency gains • Rebalancing of domestic budget priorities • Development assistance for health • Innovative financing mechanisms • Global Health Investment Fund • Tourist taxes • Solidarity airline tax • Financial transaction tax

30. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

31. “Poor quality of care—absent or unmotivated providers, poor clinical and interpersonal skills, lack of drugs and equipment—will discourage people from using newly insured services or motivate them to seek private or specialized care, undoing the benefits of financial protection. • Improvements in quality must go hand in hand with the expansion of access and financial protection.” • (Kruk, 2013)

32. Policy Goals: Providing FRP through Pro-Poor UHC Intervention package

33. Pro-Poor UHC

34. Blue Shading: Initial Trajectory of Pro-Poor UHC + NCDs/injury

35. Key to FRP for Surgery: Inclusion in Initial Benefits Package

36. Exiting the Swamp of Empty Promises

37. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

38. Future Agenda

39. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusion AGENDA

40. Consensus Areas

41. Scope & framing Economic arguments Financing services Policy goals Future agenda Consensus areas Conclusions AGENDA

42. Conclusions

43. “Equitable access to integrated health services, including vaccinations, diagnostics, medical and surgical care, and palliation, should be assured through universal health coverage.”