Developing a Methodology for Cost-Benefit Analysis of GFATM

1. Developing a Methodology for Cost-Benefit Analysis of GFATM Lilani Kumaranayake, Charlotte Watts and Philip Carriere

2. Background • Huge international investments in HIV/TB & Malaria • Increasing questions about value for money • Is it possible to estimate the cost-benefits of specific global initiatives?

3. Purposes of Analysis • Develop a pilot methodology to estimate cost and benefits of HIV/AIDs programming for Global Fund

4. Challenges • Limited data available from Global fund • currently data available by disease area (HIV) and grant basis • No details as of yet on intervention types (although currently working on it) • Current analysis based on country and grant information from GFATM and examination of country programming from individual countries • where details available

5. Methodological Development

6. Methods 1 - Literature Reviewed • Evidence of intervention impact • Cost-effectiveness • Summaries of priorities for HIV/AIDS programmes in different epidemic settings • Results: As of yet we have almost no data on cost-benefit of HIV/AIDS interventions, • Cost-effectiveness data available across some interventions, by region

7. Methods 2 • What can we do with available evidence to think about global fund programming? • Estimate Health Impact associated with expenditures (DALYs or HIV infections averted) • Health Benefits associated with expenditures (2008 Constant $) • Results expressed in present value terms (3%) • e.g. discounting future costs and benefits

8. CE Data Used for Analysis

9. Nature of Programming • Upstream • support planning, improved financing, enabling environments, • typically do not result in direct contact with population groups or specific programmes of activities involving them. • Downstream • Support to direct programme activities with populations

10. Conceptual framework Upstream Programming Downstream Programming Intn 2 Intn 3 Intn 5 Intn 1 Intn 4 Impact DALYs Impact DALYs Impact DALYs Impact DALYs Impact DALYs Impact DALYs Valuation of DALY benefits

11. Methods 3 – Regional Analysis • Impact and cost-effectiveness vary by stage of HIV/AIDS epidemic • Analysis uses UNAIDS classification • Concentrated Epidemic (Asia, Americas, Europe) • Generalised Low Level Epidemic (some Africa) • Generalised High Level Epidemic

12. Methods 4 – Programmes and Interventions • Hard to assess how programming translates into intervention-specific expenditure • For analysis, develop attribution weighting • Directness category used to reflect relationship between programming and different forms of HIV/AIDS intervention • Relative classification 9 = directly related, 3=fairly related, 1=less directly related

13. Programme Weighting by Intervention – example PMTCT Most directly related Fairly direct Less direct

14. Methods 5 - Valuing Upstream and Downstream Investments • Not all investment will immediately translate into intervention activity and short-term impact • Multipliers for expenditure • Upstream 0.25 • Downstream 0.75

15. Methods 6 – Calculation Steps • Estimate upstream and downstream expenditure by grant and region • Use weightings to estimate expenditure by programme and intervention activity • Use multipliers to estimate proportion of expenditure by programme and intervention resulting in short-term impact

16. Calculation Steps continued • Use intervention CE data to estimate impact in DALYs gained • Use cost-of-illness approach to value impact gains • $6000 for life-time treatment cost, which is the average value of life-time costs obtained from two recently published cost-effectiveness studies • Thus, using the ratio of 22 DALYs per one HIV infection averted, we can compute the value of a DALY gained as $264.

17. Our first Guesstimate of CBA

18. Results – Committed Funds – the potential • It was estimated that the present value of DALYs gained was 2,958,000 • estimated cost-effectiveness of HIV/AIDS portfolio $181 per DALY gained. • Cost-benefit terms: • Net present Value: $2,009,120 • Benefit-Cost Ratio: $ 1.34 • Results were robust to changes in key assumptions related to discount rates and methods of monetising benefits.

19. Results – Disbursements - Actual • To-date only 28% of committed funds have been disbursed • Continuing to obtain data which gives us a better breakdown of programming for disbursed funds • Disbursement profile suggests that perhaps only a third of these benefits have currently been accrued

20. Constraints and Limitations

21. Calculations Make Many Assumptions • Speculative analysis • Upstream benefits result only from downstream activities • Downstream activities related to interventions with CE data • Limited number of interventions considered • Impact is health-related (DALYs), does not value other aspects • Assume interventions like sustainable livelihoods translate into DALY benefits (NO evidence) • Assume distribution of interventions across programming

22. Limitations Continued • Assume multipliers for upstream/downstream (NO evidence) • Assume valuation of DALYs into benefits by cost-of-illness (preventing costs of treating) • Does not consider other aspects of valuation • Larger uncertainty about multilateral analysis • Constrained by level of data available • Using CE approach means that prevention has greater impact

23. Next Steps • Continue to collect more detailed grant and intervention level data by country • Anticipating more comprehensive data from GFATM