Economic Evidence for NCDs - Burden, Cost-effectiveness & the Cost of Scaling-up

1. Economic evidence for NCDs - burden, cost-effectiveness & the cost of scaling-up - Dan Chisholm, PhD Noncommunicable diseases and Mental Health (formerly Dept of Health Systems Financing)

2. Overview

3. Overview – economic burden / cost-effectiveness analysis - • Economic impact (burden to health system and beyond) • costs to whom? - private households, public services, society • scope / range of costs? - health, welfare • implications for government (projections of future impact) • Cost-effectiveness (efficiency of care & prevention strategies) • Comparative intervention cost-effectiveness (across diseases and age groups) • Identifying 'best buys' for key contributors to chronic disease burden

4. What are the economic consequences of NCDs?Who do the costs fall on?

5. Economic impact of NCDs on households in India(Source: Mahal et al, 2010)

6. Economic impact of NCDs on households in India(Source: Mahal et al, 2010)

7. Macroeconomic / societal impact of NCDs • The cost-of-illness (COI) approach, a commonly used method that sets out to capture the societal economic impact of disease; it focuses mainly on foregone income and personal medical care costs associated with NCDs; • The economic growth approach, which estimates the projected impact of NCDs on aggregate economic output (GDP) by considering how these diseases deplete labour, capital and other factors to production levels in a country (see Figure below). • The value of statistical life (VSL) approach, which reflects a population’s willingness to pay to reduce the risk of disability or death associated with NCDs. By placing an economic value on the loss of health itself, this approach goes beyond the impact of NCDs on GDP alone.

8. Projected economic impact of CVD, diabetes, cancer and respiratory diseases in all low- and middle-income countries (Source: WEF / Harvard study, forthcoming)

9. Cost-effectiveness analysis Costs Consequences • Programme-level: • administrative staffing • training • drug supply / distribution • Programme-level / intermediate: • detection • referral • treatment rates / quality Intervention populations: (enhanced care or new treatment) vs Non-intervention populations: (usual care or no treatment) • Individual-level: • treatment (drugs, therapy) • inpatient care • outpatient & primary care • ancillary care • Individual-level / final: • morbidity • mortality • QALY, DALY (composite indices)

10. Approaches to cost-effectiveness analysis • Alongside (long-term) prospective studies • observational • experimental • Modelling • decision analytic methods (e.g. 5-year cohort incidence model) • population-based disease modelling (e.g. WHO-CHOICE)

11. CHOosing Interventions that are Cost-Effective(www.who.int/choice) • CHOICE is WHO's work programme on cost-effectiveness • Use of a common set of tools and methods • enhances comparability between diseases / risk factors • Sectoral, population-level CEA • effectiveness: healthy years gained over the lifetime of a population, with / without intervention • resource costs: patient + programme level (intl $ or local units) • Results summarised in WHO regional C-E databases • available for country-level adaptation / analysis

12. WHO-CHOICE series on NCDs and injury

14. ICER (I$ per DALY saved) of dominant interventions [SearD)

15. NCDs risk factors – identification of 'best buys' • 'Best buy' – an intervention that is: • very cost-effective • low cost • feasible, acceptable and appropriate • 'Good buy' – an intervention that does not meet all of 'best buy' criteria but which offers good value and has other attributes that recommends its use • Policy-makers can consider best buys as a core set of interventions for priority scale-up, and good buys as an expanded set of interventions to be made available when resources allow.

16. NCDs risk factors – 'best buys'

17. NCDs – 'best buys'

18. Costs and cost-effectiveness - key points • Health & social welfare costs of chronic disease • already large and growing rapidly (ageing populations) • a major challenge for public health and for government policy • economic or financial impact studies can help make the investment case • Economic evidence for policies concerning chronic disease prevention & mgt • Paucity of studies in low- and middle-income countries • Largely a vertical disease approach (vs more horizontal, health platform approach) • Long time lags / slow returns on investment – how to convince ministries of finance • Being 'cost-effective' does not mean an intervention is going to be financially feasible • Implementation of NCD best buys is inexpensive and will produce dramatic health gains

19. Funding healthcare to maximise NCD prevention and control Dan Chisholm, PhD Dept of Health Systems Financing, WHO Geneva

20. Overview

21. Cost of scaling-up a cost-effective NCD package

22. What to scale up? NCD 'best buys' (Source: NCD Global Status Report; WHO, 2011)

23. Key parameters, data sources and assumptions

24. 16 14 12 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 "Best buy" population-based interventions for NCD risk factors (tobacco, alcohol, diet, physical activity) "Best buy" individual-based interventions for NCDs (cardiovascular disease, diabetes, cancer) Cost of scaling-up NCD 'best buys' in low- and middle-income countries Cost (US$ billion)

25. So, how much will it cost to scale-up these NCD 'best buys'? Answer: for all LMIC, US$ 11.4 billion per year on average Population-based measures: close to US$ 2 billion per year Low- and lower-middle-income countries: < US$ 0.20 per head Upper-middle income countries: < US$ 0.50 per head Individual-based measures: nearly US$ 10 billion per year Low-income countries: < US$ 1.00 per head Lower middle-income countries: < US$ 1.50 per head Upper-middle income countries: ~ US$ 2.50 per head

26. Who is going to pay for all this?Health Financing Mechanisms Financing mechanisms Financing sources Tax-based financing 1. General tax or other revenue External resource 2. Payroll tax Social health insurance Health care services Household Other prepayment schemes 3. Contribution or premium Natural resource revenue Out-of-pocket payments 4. Direct payment

27. Characteristics of different health insurance mechanisms 27

28. Financing for universal health coverage - WHR 2010 - • What is meant by universal coverage? All people have access to needed health services - prevention, promotion, treatment and rehabilitation - without the risk of financial hardship associated with accessing services. • Where are we? In many LMIC, a long way away ... service coverage for NCDs and many other disorders very low, while the extent of financial catastrophe and impoverishment worryingly high. Richer countries also moving further away from it either with increases in cost-sharing or as a result of financial crisis. • What can be done? Various options / actions available, including better protection for the worse off, better use of existing resources and raising new sources of funding for health.

29. Three ways of moving towards universal coverage Universal population coverage Universal population coverage Complete prepayment/ Complete prepayment/ No cost - sharing No cost - sharing Services & Benefits Reduce Reduce Extend Extend out - of - out - of - Essential Essential benefits benefits pocket pocket benefit benefit package package Extend Extend coverage coverage Public expenditure on health Prepayment/ Pooling Population coverage

30. Where are we now? • Heavy reliance on out of pocket payments (OOPs) to finance health in many countries – prevents many from using services and results in financial catastrophe and impoverishment for many who do. • 150 million people face financial catastrophe • 100 million people are pushed below the poverty line • Millions of people do not have access to effective / affordable health care • Inefficient and inequitable use of the resources that are available. • Even if we get this right, simply insufficient funds in may countries, despite large increases in DAH since 2000. Even high income countries continually trying to find the resources necessary to keep their systems moving forward and to meet people's expectations.

31. Main causes of inefficiency / waste

32. What can be done? • Reducing financial barriers to coverage, and protecting people against financial risks of ill health – how to increase pooling, to protect people against financial catastrophe and impoverishment. How to maintain it and prevent reversals. • Use funds more efficiently and equitably: Analysis of the nature and extent of inefficiencies and inequalities, and what steps have and can be taken to improve them. This will have practical examples of how improvements can be made. • Raise sufficient funds for health – practical suggestions, mix of external (for low income countries) and domestic.

33. Low-income countries will be unable to finance the levels of spending required to scale up services from domestic sources for many years Despite large increases in external financial assistance since 2000, it remains insufficient, and only a few donors are on track to meet their own international targets Mobilizing additional traditional ODA funds when the global economy is in turmoil is a major challenge Innovative financing mechanisms can complement traditional aid and help deliver urgently needed financing Scope for design of more efficient, more effective funding and uses Innovative Financing?

34. Types of Innovative Financing Mechanisms

35. Health financing for NCDs – key points • Reduce OOPs / increase pre-payment • Systemic rather than disease-specific issue, however OOPs for chronic diseases / conditions particularly regressive and impoverishing because they endure over time (need more research showing the economic impact of NCDs on household budgets/incomes) • Use funds more efficiently and equitably: • Identify 'best buys' for prevention and opportunities for positive synergies re: treatment in PHC • Raise sufficient funds for health • Better articulation of and budgeting for core NCD packages / components • Costing tool for scaling-up (evidence-based advocacy) • Additional funding via sin taxes (e.g. alcohol, tobacco)