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 2. Financial arrangements economic argument for affect equity, access, investing in surgical care affordability 3. Strategic purchasing may improve quality & efficiency
1.1 THE ECONOMIC CASE What are the economic impacts of surgical conditions in LMICs?
Long bone fracture Children taken Attempt to out of school seek care Family falls Permanent into poverty disability Unable to feed Unable to young family work
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 2.0% 1.8% 1.6% 1.4% Percent Loss in GDP 1.2% 1.0% 0.8% 0.6% 0.4% 0.2% 0.0% 2015 2020 2025 2030 Year Low income Lower middle income Upper middle income High income Alkire et al, 2015 Lancet Global Health, In Press
Economic productivity Poverty Education reduction
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 Once you have a platform in CEA tended to examine place (initial capital outlays, isolated procedures, ignoring staff training) > economies of “platform” effects scope and scale Policymakers make decisions about surgical services, not individual procedures
CEAs of Surgical Platforms in LMICs Surgical services at the District (1 st level) Hospital 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 $54 Essential Surgery, DCP-2
Surgical platforms are only cost-effective if they are: • Accessible to the population • Sufficiently resourced to provide safe and timely surgical care
1.3 THE ECONOMIC CASE Although cost-effective, surgical care may be catastrophically expensive for individual patients
33 million households globally experience catastrophic expenditure accessing surgical care each year from the direct out-of-pocket costs alone Shrime et al. 2015. Lancet Global Health
A further 48 million households suffer catastrophic expenditure from direct non-medical costs of seeking care Shrime et al. 2015. Lancet Global Health
Many more do not seek the treatment they need , when they need it because they cannot afford the costs
2.1 HEALTH FINANCING FOR SURGICAL CARE
Public sector Private sector ▪ General revenues (taxation) ▪ Out-of-pocket payments ▪ Social insurance ▪ Private insurance External ▪ Grants from donor agencies ▪ Highly concessional loans from development banks
8000 ¡ Per ¡capita ¡health ¡expenditure ¡($US) ¡ 7000 ¡ 6000 ¡ 5000 ¡ 4000 ¡ 3000 ¡ 2000 ¡ 1000 ¡ 0 ¡ 0 ¡ 5000 ¡ 10000 ¡ 15000 ¡ 20000 ¡ 25000 ¡ Surgical ¡cases ¡per ¡100,000 ¡population ¡ Domestic health spending increases with GDP Surgical volume relates to domestic health spending
The golden decade for health aid DAH (Billions of USD) ..was not a golden decade for surgery
Or at least we don’t think it was….
We have no idea how much the world is spending on surgical services Patchy data Databases do not collect specific data on EXTERNAL Funding not well surgery aligned with need Countries do not NHAs: Only Georgia & DOMESTIC collect data on Kyrgyztan reported surgical spending surgical spending
2.2 FINANCING MECHANISMS How we finance surgical care has huge impacts on access, equity and affordability
DIRECT INDIRECT • “User fees” • “Insurance” • Fee-for-service payments, (taxation, social, private) without benefit of insurance • Target groups pay regular • Paid out-of-pocket at the contributions to pool point of care • Treatment financed when member of pool is sick
Indirect financing mechanisms • 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
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…
User fees and surgery uptake • 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
On top of user fees, two other household costs are a barrier 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
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 Education, Human training, resources accreditation Equipment, Physical supply Surgical infrastructure chains systems Information Financial risk management protection & research Broader development issues
• Human resources LICs • Basic infrastructure • Equipment & supply chains • Training MICs • Quality • Equity & FRP All • Focus on 1 st level hospitals • Strengthening referral systems
Commission examined different scenarios for scale-up of surgical care from 2012-2030 + associated investments • Current rates of scale-up vs. aspirational rates Mexico Mongolia 22.5 % annual surgical growth 8.9 % annual surgical growth rate rate
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
Financing surgical scale-up • 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
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