Richard M. Scheffler, PhD Distinguished Professor of Health Economics and Public Policy

1. Financing: Cost Estimates for Scaling Up and Who Will Pay Richard M. Scheffler, PhD Distinguished Professor of Health Economics and Public Policy School of Public Health and Richard & Rhoda Goldman School of Public Policy Director, Global Center for Health Economics and Policy Research* University of California, Berkeley Brent D. Fulton, PhD Global Center for Health Economics and Policy Research* School of Public Health, University of California, Berkeley *A Pan American Health Organization/World Health Organization Collaborating Center on Health Workforce Economics Research Human Resources for Health Results (HR2) Conference Addis Ababa, Ethiopia May 11, 2009

2. Overview of Presentation • Health workforce shortages in SSA in 2015 • Annual wage bill to eliminate shortages • Annual costs and sources of funds to scale up • Discussion and policy implications

3. Research Papers • Scheffler RM, Liu JX, Kinfu Y, Dal Poz MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” The Bulletin of the World Health Organization 2008, 86:516-523. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf • Scheffler RM, Mahoney CB, Fulton BD, Dal Poz MR, Preker AS. “Estimates of Sub-Saharan Africa Health Care Professional Shortages in 2015: What Can Be Done at What Cost?” Health Affairs (in press).

4. Methodology for Doctors • Forecast future need and demand for physicians in 2015: • Needs-based model (WHO): Number of physicians required to achieve 80% coverage of births by a skilled attendant • Demand-based model: GNI as key indicator of health spending • Project supply: what will be the future supply of physicians if current trends continued?

5. Needs-based model projection arcsine(percent coverage) =β0 + β1* ln(physicians per 1,000 populationi,t) +μi +ηt + δi,t Where μi + = Country fixed effect ηt = Time fixed effect δi,t = Random disturbance term Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

6. Demand-based model projection ln(physicians per 1,000 populationi,t) =γ0 + γ1*ln(GNP per capitai,t-5)+ γ2*IncomeDummyi + μi + ζi,t Where μi reflects a vector of country fixed effects ζi,t is a random disturbance term Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

7. Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

8. Supply projection ln(physicians per 1,000 populationt) =α0 + α1*Yeart + εt Where εt is a random disturbance term and T = {1980,…,2001} Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

9. Conceptual Framework

10. Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

11. Methodology for Nurses and Midwives • Need • 2.28 workers per 1,000 population (WHO, 2006) • 0.55 doctors (Scheffler et al., 2008) • 1.73 nurses and midwives • Supply • Doctors • Apply combined nurse-to-doctor and midwife-to-doctor ratio • Shortage = Need – Supply

12. Health-worker shortage in 2015(31 African countries) Preliminary results. Do not cite.

13. Health worker shortage in 2015(countries with largest projected shortage per 1,000 population) Need: 0.55 1.73 2.28 Note: Total is based on non-rounded numbers. Preliminary results. Do not cite.

14. Health worker shortage in 2015 (cont.)(countries with largest projected shortage per 1,000 population) Need: 0.55 1.73 2.28 Note: *Negative number represents a surplus.Total is based on non-rounded numbers. Preliminary results. Do not cite.

15. Shortage Calculation for Mozambique(workers per 1,000 population) • Doctors need minus supply: 0.55 – 0.01 = 0.54 • Nurse & midwife need minus supply: 1.73 – 0.14 = 1.59 • Total need minus supply: 2.28 – 0.15 = 2.13 Preliminary results. Do not cite.

16. Overview of Presentation • Health workforce shortages in SSA in 2015 • Annual wage bill to eliminate shortages • Annual costs and sources of funds to scale up • Discussion and policy implications

17. Monthly Wage Statistics in Africa ($US 2007) Source: Occupational Wages around the World (OWW) Database 17

18. Annual wage bill required to remove health worker shortage in Africa for 2015 Note: Numbers are based on rounded numbers. Preliminary results. Do not cite.

19. Annual wage bill required to remove health worker shortage in Africa for 2015 (millions $US 2007) Source: World Health Report 2006 (2003 Government Health Budget) Note: Total is based on non-rounded numbers. Preliminary results. Do not cite.

20. Annual wage bill required to remove health worker shortage in Africa for 2015 (millions $US 2007) (cont.) Note: *Negative amount represents a surplus.Total is based on non-rounded numbers. Preliminary results. Do not cite.

21. Annual Wage Bill Calculation to Eliminate Shortage in Mozambique ($US 2007) • Doctor shortage times annual wage: 12,600 * $4,200 = $53 million • Nurse and midwife shortage times annual wage: 37,400 * $2,200 = $82 million • Total: $135 million • 47% of government’s health budget (2003) Preliminary results. Do not cite.

22. Overview of Presentation • Health workforce shortages in SSA in 2015 • Annual wage bill to eliminate shortages • Annual costs and sources of funds to scale up • Discussion and policy implications

23. Annual Cost to Scale Up in 2015 • Wage bill for doctors, nurses, and midwives ($2.6 bn) • Other recurring costs ($16.4 bn) • Wage bill for other health workers and support staff • Funds for supplies, pharmaceuticals, equipment, and facilities • Training costs ($26 bn over 10 years) [GHWA, 2008] Preliminary results. Do not cite.

24. Annual Cost to Scale Up in Context in 2015 Sources: Authors’ analysis, World Health Report 2006, and Effective Aid Better Heath (2008) Preliminary results. Do not cite.

25. Overview of Presentation • Health workforce shortages in SSA in 2015 • Annual wage bill to eliminate shortages • Annual costs and sources of funds to scale up • Discussion and policy implications

26. Discussion and Policy Implications • Productivity improvements--3% per year reduces shortage from 792,000 to 575,000 • Worker incentives, both monetary and non-monetary • Skill mix • Training capacity and partnerships

27. Questions? End of Presentation

28. Number of countries with projected shortages of doctors Note: A country was defined to have a shortage if the projected supply of physicians met less than 80% of the projected demand or need. Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

29. Summary of Findings for Africa • Over 30 countries with projected doctor shortages in 2015 • Shortage totals 257,000 doctors • Needs-based demand: 369,000 • Projected supply: 112,000

30. Doctor Shortages in Africa in 2015 Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

31. Doctor Shortages in Africa in 2015 (cont.) Countries with no doctor shortages: Botswana, Congo, Namibia, Mauritius, South Africa and Algeria Scheffler, RM, Liu, JX, Kinfu, Y, Dal Poz, MR. “Forecasting the Global Shortages of Physicians: An Economic- and Needs-based Approach.” April 2008, The Bulletin of the World Health Organization. Available at: http://www.who.int/bulletin/volumes/86/7/07-046474.pdf

32. Shortage Calculation for Ethiopia(workers per 1,000 population) • Doctors need minus supply: 0.55 – 0.05 = 0.50 • Nurse & midwife need minus supply: 1.73 – 0.41 = 1.32 • Total need minus supply: 2.28 – 0.46 = 1.82 *Preliminary results. Do not cite.*

33. Annual Wage Bill Calculation to Eliminate Shortage in Ethiopia ($US 2007) • Doctor shortage times annual wage: 48,390 * $2,084 = $101 million • Nurse and midwife shortage times annual wage: 128,725 * $1,319 = $170 million • Total: $271 million • 75% of government’s health budget (2003) *Preliminary results. Do not cite.*

34. Skill Mix Analysis

35. Scenario A: wage bill savings from increasing nurse & midwife-to-doctor ratio by 50 percent *Preliminary results. Do not cite.*