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Epidemics in a Globalized World: Economic and Financial Lessons from HIV/AIDS

This talk explores the economic and financial implications of HIV/AIDS in a globalized world, based on a recently published book. It discusses the HIV/AIDS epidemic, the impact on different regions and countries, routes of transmission, funding and economic aspects, as well as the lessons learned from HIV/AIDS in combating other epidemics. The talk also touches on the topic of influenza as another well-known pandemic.

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Epidemics in a Globalized World: Economic and Financial Lessons from HIV/AIDS

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  1. Epidemics in a Globalized World: Economic and Financial Lessons from HIV/AIDS Tapen Sinha ING Chair, ITAM, Mexico Professor, University of Nottingham, UK tapen@itam.mx, Tapen.Sinha@nottingham.ac.uk

  2. This talk is based on the book that has just been published (September 2008) Dozen boxes 50 tables 100 graphs It is available in the Springer booth Price: US$159 All royalty will be donated to AIDS charity

  3. HIV and AIDS in the news July/August 2008 US Senate passed PEPFAR bill authorizing $50 billion over five years to combat HIV/AIDS PEPFAR bill also removes the restriction on travel by HIV+ persons to the US (in place since 1987) New trial for a vaccine has been scuttled XVII International AIDS Conference, 3-8 August, Mexico City (biennial) CDC released new estimates of HIV on 3 August in JAMA A discussion takes place on August 7 in JSM called “Statisticians: Speaking out and reaching out on global health policy- the case of HIV/AIDS” A paper explaining Bayes Rule appears in the American Statistician (August 2008) using HIV/AIDS as an example

  4. Roadmap for the talk • Short discussion on influenza • HIV facts: Global • HIV facts: English speaking developed countries • HIV facts: US • Routes of transmission • Strategies and consequences • Funding of HIV • Economics of HIV • Finance of HIV • Conclusion

  5. Well-known Pandemic: Influenza • Not all are of the same kind: family Orthomyxoviridae • HxNy where x=1,2,...,10; y=1,2,...,7 • H = hemagglutinin, N = neuraminidase • H5N1 is the avian flu – normally not virulent among birds.... • .....But can mutate and affect humans with high death rate

  6. It came from H1N1

  7. Facts • Flu epidemics are getting more frequent and with higher epidemicity • Spanish Flu hit prime age people more • Travel made it more so • Proximity of living made it more so • It is not the only pandemic that has the above characteristics: HIV/AIDS • Unlike flu, HIV is a slow burning epidemic

  8. HIV/AIDS: Global Data

  9. Increasing Worldwide Prevalence of HIV/AIDS

  10. Regional Distribution of HIV/AIDS in 2007 and 2001 Source: AIDS Epidemic Update, December 2007, UNAIDS, Geneva.

  11. Newly Infected Adults and Children by Region in 2007 and 2001 Source: AIDS Epidemic Update, December 2007, UNAIDS, Geneva.

  12. HIV/AIDS in developed English speaking countries

  13. Stylized Facts • Incidence (new infection rate) is far higher in the United States than any other developed country • In all countries the incidence peaked in the early 1990s and then on the decline • A change of definition caused a blip in the rate • The dreaded outcome in the US did NOT come to pass (next slide)

  14. Source: Society of Actuaries Task Force Report, 1986

  15. US death rates from top four causes: 1982-2000

  16. How concerns about HIV/AIDS has been replaced by concern about general Health Care and Insurance Source: Gallup Tracking Poll

  17. Commentary on the US scene • Unless something dramatic happens with a disease, it is not newsworthy • It also falls off the public policy radar • Here, the apparent stabilization of the disease HIV/AIDS has led to decline in real terms HIV/AIDS funding • What has happened? • The “color” has changed: 1985, 60% white, now 60% African Americans

  18. Behind the scene changes • HIV/AIDS has become largely a problem of the African Americans – in particular among African American women • In 2004, HIV infection became the leading cause of death for African American women aged 25-34 years • African American women represented 66% of AIDS diagnoses in women in 2006, though just 12-13% of American women are African American • Washington DC has the same rate of prevalence as Rwanda (see the following slide)

  19. 102.8 44.6 45.2 25.9 13.6 91.7 54.0 NH 50.0 46.4 26.4 21.6 MA 162.5 438.1 23.7 RI 79 143.6 CT 35 177.3 252.1 53.1 NJ 145.9 236.8 74 77 59.3 DE 153.1 247.2 48.4 104.4 MD 311.8 56.1 113.1 207.2 132.5 74.1 DC 2,016.5 115.6 127.7 98.9 74.5 Total rate=174.5* 78.6 92.3 195.9 227.7 133 Rate (per 100,000 98.2 population) 181.1 229 <100 304.8 100 -150 60.7 2.5 American Samoa > 150 28.4 Guam 115.1 4.4 No. Mariana Islands 341.8 Puerto Rico 355.0 Virgin Islands, US Source: CDC

  20. Why African Americans? • Poverty • Lack of access to healthcare • Genetic factors • Sexual behavior of adolescents • Racism and stigma • Prison • Drug use • Most of these are related factors

  21. Views about HIV/AIDS among African Americans (2005) • 48% of African-Americans believed that HIV was a man-made virus. • 53% believed that there was a cure for AIDS that was being withheld from the poor • 27% though AIDS was produced in a government laboratory • 12% thought the HIV was created and spread by the CIA • 15% thought it was a form of genocide against blacks. (Source: RAND, U of Oregon SU study)

  22. Main routes of HIV transmission • MSM: Men who have sex with men • Sex workers • Intravenous drug users • Mother to child (newborns or infants) • Marital sex • Casual sex • Thus, to stop infection from spreading, we need to attack all of these

  23. Sources of New HIV Infections by Region

  24. Different groups, different strategies • In Sub-Saharan Africa, the biggest risk is marital sex: “grazing” • In Latin America - MSM: Men who have sex with men (macho culture denies such tendencies) • In Eastern Europe – IDU: Intravenous drug users • Strategy: Spend more money on (1) educating people about grazing (2) safe sex practices for MSM (3) needle exchange • Problem: They are not watertight compartments

  25. Transmission of HIV/AIDS Across Groups in Bangladesh FSW: female sex workers IDU: Intravenous drug users

  26. Right Strategy in Thailand: Condom Use Projected in 1990 Source: Ministry of Health, Thailand, 2002.

  27. How do we KNOW it was right for Thailand • Counterfactual: A clear contrast with Thailand is South Africa (65 million vs 43 million) • They had similar rates until 1990 • South Africa adopted denial strategy • Health minister even refused to accept that HIV and AIDS are linked (next slide) • Thailand also benefited from related effects (following slide)

  28. Reported Male STDs and Percent of Sex Acts Without Condoms Source: Ministry of Health, Thailand, 2000.

  29. Compared with South Africa... • ...Thai incidence and prevalence are FALLING • Concurrent benefits: falling rates of other sexually transmitted diseases • Is more money ALWAYS the answer? • In the past five years, several large donors have appeared: PEPFAR at the forefront (recently announcing $50 billion over 5 years)

  30. Economics of HIV/AIDS • First lesson in Econ 101: tradeoffs (guns versus butter) • More money spent on HIV/AIDS • Less money for other diseases • Consequence: less doctors, less nurses…. • High prevalence countries: 4% of deaths are attributable to HIV yet 50% of the health budget spent on HIV (Roger England) • New buzzword: Positive Synergies

  31. Macroeconomic Impact • Model of counterfactual • Case: South Africa • Had there been no HIV/AIDS, per capita family income would have risen five fold between 1960 and 2080 • With HIV/AIDS, it might rise just 20% or fall by 40% over 120 years

  32. Micro-level impact and economic policy • Emily Oster did much work on mircro level transmission of HIV/AIDS • She notes: • (1) There is little difference between the sexual behavior of Americans and sub-Saharan Africans • (2) The transmission rate of HIV from men to women is three times as high in sub-Saharan Africa as it is in the United States. • High correlation between HIV and other sexually transmitted diseases (STDs) • Policy: Treatment of OTHER STDs just as important

  33. Economic activity remarkably predates HIV transmission • Emily Oster has shown that rise in economic activity is followed by rise in HIV transmission • Routes are clear: trucking and commercial sex work (of both sexes) go hand in hand • Clearest evidence: Uganda • In India, rising HIV tracks the routes of new National Highways along the states where economic growth is the strongest

  34. Will HIV produce "positive" results of raising wage rate? • Evidence: Farm wage rate rose in England by three fold following famine and black death in the 1300s • In the 1300s, the main source income was agriculture that had very little input of human capital • Education hardly played any role in the production process • The use of artificial fertilizer and pesticides is commonplace. • Human capital has become a factor in the production process

  35. Summary of Cost-Effectiveness Analysis of HIV/AIDS Program in India Source: World Bank (2006). Notes: DALY stands for Disability Adjusted Life Years. STI stands for Sexually Transmitted Infections. VCTC stands for Voluntary Counseling and Testing Center. MCTC stands for Mother to Child Transmission.

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