LANCET COMMISSION ON GLOBAL SURGERY ECONOMICS & FINANCING Anna - - PowerPoint PPT Presentation

LANCET COMMISSION ON GLOBAL SURGERY ECONOMICS & FINANCING

Anna J Dare Commissioner & Facilitator Finance & Economics Working Group

OUTLINE

• Summary of The Lancet Commission Economics &

Finance section » The Current Situation—defines problem » The Way Forward—proposed policy solutions

• How do we take these findings and recommendations

forward?

THE CURRENT SITUATION

Prevailing perception: ‘too costly, too complex’

Evidence for the costs and economic impacts of surgical care in LMICs has been scarce.

THE CASE FOR SURGERY

• 1. There is a strong

economic argument for investing in surgical care

• 2. Financial arrangements

affect equity, access, affordability

• 3. Strategic purchasing

may improve quality & efficiency

What are the economic impacts of surgical conditions in LMICs?

1.1 THE ECONOMIC CASE

Long bone fracture Attempt to seek care Permanent disability Unable to work Unable to feed young family Family falls into poverty Children taken

• ut of school

Surgical conditions exert substantial macro-

economic impacts

• $9.2 trillon in cumulative projected losses in economic

productivity from surgical conditions in LMICs between 2015-2030

• Main causes of losses: injuries and cancers

Alkire et al, 2015 Lancet Global Health, In Press

By 2030, surgical conditions in MICs could knock up to 2% of annual GDP growth

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4% 1.6% 1.8% 2.0% 2015 2020 2025 2030 Percent Loss in GDP Year Low income Lower middle income Upper middle income High income

Alkire et al, 2015 Lancet Global Health, In Press

Economic productivity Poverty reduction Education

GDP alone does not capture the full value of better health >> “full income” approach

There are also significant welfare losses in LMICs from surgical conditions

• Using the VLYs approach:
• $12.1 trillion (2010 USD PPP) from mortality in 2010
• $3.2 trillon lost from morbidity

Alkire et al, 2015 Lancet Global Health, In Press

1.2 THE ECONOMIC CASE

Surgical care can be highly cost-effective in LMICs

Chao et al, Lancet Global Health 2014

Cost-effectiveness studies in surgery have often neglected economies of scope and scale

CEA tended to examine isolated procedures, ignoring “platform” effects Once you have a platform in place (initial capital outlays, staff training) > economies of scope and scale Policymakers make decisions about surgical services, not individual procedures

CEAs of Surgical Platforms in LMICs

Essential Surgery, DCP-2 Super-region $USD / DALY averted Sub-saharan Africa $33 South Asia $38 Middle East & North Africa $79 Latin America & Carribbean $96 Europe & Central Asia $78 East Asia & Pacific $54 Surgical services at the District (1st level) Hospital

Surgical platforms are only cost-effective if they are:

• Accessible to the population
• Sufficiently resourced to provide safe and timely surgical care

1.3 THE ECONOMIC CASE

Although cost-effective, surgical care may be catastrophically expensive for individual patients

33 million households globally

experience catastrophic expenditure accessing surgical care each year from the direct out-of-pocket costs alone

Shrime et al. 2015. Lancet Global Health

A further 48 million households suffer catastrophic expenditure from direct non-medical costs of seeking care

Shrime et al. 2015. Lancet Global Health

Many more do not seek the treatment they need, when they need it because they cannot afford the costs

2.1 HEALTH FINANCING FOR SURGICAL CARE

Public sector

▪ General revenues (taxation) ▪ Social insurance

Private sector

▪ Out-of-pocket payments ▪ Private insurance

External

▪ Grants from donor agencies ▪ Highly concessional loans from development banks

Domestic health spending increases with GDP

0 ¡ 1000 ¡ 2000 ¡ 3000 ¡ 4000 ¡ 5000 ¡ 6000 ¡ 7000 ¡ 8000 ¡ 0 ¡ 5000 ¡ 10000 ¡ 15000 ¡ 20000 ¡ 25000 ¡ Per ¡capita ¡health ¡expenditure ¡($US) ¡ Surgical ¡cases ¡per ¡100,000 ¡population ¡

Surgical volume relates to domestic health spending

..was not a golden decade for surgery

DAH (Billions of USD)

The golden decade for health aid

Or at least we don’t think it was….

We have no idea how much the world is spending

• n surgical services

Databases do not collect specific data on surgery Patchy data Funding not well aligned with need Countries do not collect data on surgical spending NHAs: Only Georgia & Kyrgyztan reported surgical spending EXTERNAL DOMESTIC

2.2 FINANCING MECHANISMS

How we finance surgical care has huge impacts on access, equity and affordability

DIRECT

• “User fees”
• Fee-for-service payments,

without benefit of insurance

• Paid out-of-pocket at the

point of care

INDIRECT

• “Insurance”

(taxation, social, private)

• Target groups pay regular

contributions to pool

• Treatment financed when

member of pool is sick

• Public financing reduces OOP costs but with risks
• Regressive taxation structures in some LMICs
• Package covered often excludes surgery
• Public spending may target the wealthier
• Contribution risk pooling can be hard
• Large informal sector, dispersed population > difficult to collect

premiums

• Can be difficult to provide good coverage, exceptions Rwanda
• Private insurance leads to inequities
• Insures the wealthy, not the poor and sick
• Dual systems (public/private) can also >> two-tiered system

Indirect financing mechanisms

Evidence shows that risk pooling is the preferred financing arrangement for health services

Equitable health care best achieved when everyone

is in the same (single) pool

Three features of surgical care make pooling (prepayment) preferable to user fees:

Time-critical & life- or limb- threatening conditions User fees are often high and can be catastrophic Unpredictable, cannot plan or save for financial consequences

Yet user fees are still the dominant financing mechanism for surgical care in LMICs…

• Removing user fees for C-section in Sudan and Senegal à

increases use of EmOC facilties

• In Sierra Leone, introduction of free health care policy for

children à increased uptake of pediatric surgery

• Removing user fees for cataracts in rural China doubled

uptake

User fees and surgery uptake

Costs of surgical supplies

(e.g. gloves, sutures, dressings, IVF, antibiotics)

Costs of transport and food

can be impoverishing, even when the care is free NOTE: this is a challenge to direct and indirect financing arrangements few insurance schemes or general taxation financing mechanisms for health make provision for transport, food

On top of user fees, two other household costs are a barrier

• 3. PURCHASING
• Little attention given to what mechanisms improve quality

& efficiency for surgical care delivery

• Strategic purchasing can drive quality & efficiency
• Pay for performance?
• What performance indicators

THE WAY FORWARD

Universal access to safe, affordable, quality surgical and anaesthesia care when needed

• 4. INVESTMENT REQUIRED

Human resources Education, training, accreditation Physical infrastructure Equipment, supply chains Information management & research Financial risk protection

Surgical systems

Broader development issues

• Human resources
• Basic infrastructure
• Equipment & supply chains

LICs

• Training
• Quality
• Equity & FRP

MICs

• Focus on 1st level hospitals
• Strengthening referral systems

All

Commission examined different scenarios for scale-up of surgical care from 2012-2030 + associated investments

• Current rates of scale-up vs. aspirational rates

22.5 % annual surgical growth rate 8.9 % annual surgical growth rate Mexico Mongolia

Total scale-up costs for 88 LMICs over the period 2012-2030 was about $300-420 billion USD*

• $1.1 billion annually for 33 LICs (4% annual health exp.)
• $8.4 billion annually for 33 lower-MICs (4% annual health exp.)
• $7.0 billion annually for 22 upper-MICs (1% annual health exp.)

Scale-up of surgical care must be viewed as an investment, not a cost

*using Mongolian rates of scale-up

4.1 SOURCES OF FINANCING

General mechanisms

• 1. Increased mobilisation of domestic resources

e.g. general taxation, taxation of tobacco/etoh/MNC

• 2. Intersectoral reallocations and efficiency gains

e.g. reducing or eliminating fuel subsidies

• 3. Contributions from external resources

e.g. both traditional DAH and innovative financing

• Domestic sources
• Some MICs able to provide full scale-up from domestic budgets
• Most still reliant on external sources, esp. for capital investments
• External sources
• Development assistance for health (DAH)
• Targeted to surgical care? diseases? HSS?
• Innovative financing sources
• Global Health Investment Fund

Financing surgical scale-up

• Changing global health financing environment post-2015
• Changing disease patterns: old problems, new challenges
• Many countries transitioning towards MIC/UMIC status
• Rise of the ‘South-South’ donors
• Move from an era of vertical funding back towards HSS
• Role for disruptive innovation & technology

BUT Still a tendency to view health challenges as disease-based rather than solution-orientated

The post-2015 global health landscape

Surgery must provide a better case for its inclusion within domestic and external health budgets FRAMING

Databases that track aid for health must include topic code for surgery National Health Accounts must disaggregate spending to allow surgical spending to be tracked

• 5. TRACKING FINANCIAL

FLOWS TO SURGERY

ACCOUNTABILITY

• 6. IMPROVING QUALITY

& EFFICIENCY

• Strategic purchasing
• Pay for performance (process & outcomes)
• Other non-financial mechanisms

• 7. SURGERY & UHC

“Pro-poor progressive universalism with essential surgical care covered from early within the expansion pathway”

1

• Poor gain the most in terms of health and

financial risk protection

2

• Approach yields high health gains per $ spent

3

• Evidence from HICs that inequitable health

systems >> worse outcomes for all

4

• Implementation success in many low- and

middle-income countries (e.g. Mexico) has shown feasibility

Why pro-poor?

Time-critical & life- or limb- threatening conditions User fees are often high, can be catastrophic &/or impoverishing Unpredictable, cannot plan or save for financial consequences

Why cover surgery first?

7.1 SURGICAL COVERAGE WITHIN UHC

Policies ¡ Platforms ¡ Packages ¡ Procedures ¡

• Global ¡
• Domestic ¡
• Community ¡Health ¡Centre ¡
• District ¡(1st ¡level) ¡Hospital ¡
• Regional ¡Hospital ¡
• General ¡
• Obstetric ¡
• Trauma ¡
• Specialist ¡
• Emergency ¡
• Planned ¡

The 4 ‘P’s

Initial Benefits Package

• The most cost-effective interventions
• Treatment for highly impoverishing conditions

Expansion Pathway

• Can use “extended” cost effective analysis (ECEA) to

estimate trade-offs between lives saved and poverty averted

• Assesses how much health is gained per million dollars

spent and also how much financial protection is purchased

Where to start?

Investing in Health 2035 Model:

§ Size of the population affected by the disease § Severity of the disease § Effectiveness of the surgical intervention § Economic impact of the condition on the household § Welfare impact (e.g. effects on schooling, carers) § Equity and social implications § Cost-effectiveness, extended cost-effectiveness § Budget implications of coverage

What to consider?

Emergency Package Example Emergency Procedures Example Basic Trauma Surgery Package Chest tube placement, fracture fixation, amputation, burr hole, burn care, trauma laparotomy Basic Emergency Obstetric Surgical Package C-section, hysterectomy, salpingectomy, D&C Basic Emergency General Surgical Package Appendectomy, laparotomy, hernia repair with or without bowel resection, incision and drainage

Ultimately, the Commission felt this was a country-level decision

• Context specific, political, involves value judgements
• Mexico & Thailand examples show multiple routes possible

What to cover and when?

KEY MESSAGES

1. There is a strong economic case for investing in surgery 1. Macroeconomic impact 2. Cost-effectiveness 3. Costs catastrophic & impoverishing when paid OOP

KEY MESSAGES

• 2. Significant investment required to scale-up surgical systems

1. Domestic & external financing 2. Tracking financing flows

KEY MESSAGES

• 3. UHC policies must include surgery

KEY MESSAGES

• 4. Prepaid publicly financed services with risk

pooling provide FRP and promote equity

KEY MESSAGES

• 5. Financing mechanisms underused lever to

promote quality & efficiency

FEWG members

Consultants Research assistants Modelling team