CHAPTER THREE ealth services lell Chosen, Well organized? Health services aim to protect or improve health. Whether they do so effe tively depends on which services are provided and how they are organized Resources should be used for interventions that are known to be effective, in accordance with national or local priorities. Because resources are limited, there will always be some form of rationing but prices should not be the chief way to determine who gets what care. Both hierarchical bureaucracies and fragmented, unregulated markets have serious flaws as ways to organ ize services: flexible integration of autonomous or semi-autonomous health care providers can mitigate the problems
Health Services: Well Chosen, Well Organized? 47 CHAPTER THREE ealth ervices: ell hosen, ell rganized? Health services aim to protect or improve health. Whether they do so effectively depends on which services are provided and how they are organized. Resources should be used for interventions that are known to be effective, in accordance with national or local priorities. Because resources are limited, there will always be some form of rationing but prices should not be the chief way to determine who gets what care. Both hierarchical bureaucracies and fragmented, unregulated markets have serious flaws as ways to organize services: flexible integration of autonomous or semi-autonomous health care providers can mitigate the problems. 47
HEALTH SERVICES WELL CHOSEN, WELL ORGANIZED? ORGANIZATIONAL FAILINGS ust as the principal objective of a health system is to improve people's health, the chief function the system needs to perform is to deliver health services. The other ns matter partly because they contribute to service provision. It is therefore a major failing of the system when effective and affordable health interventions do not reach the populations that would benefit from them. Sometimes this happens because the providers have inadequate skills, or because of a lack of drugs and equipment: these are the conse- quence of failures of training and investment, as discussed in Chapter 4, or of purchasing, as discussed here and in Chapter 5. Sometimes services are not delivered to potential bene ficiaries because of price barriers: this is the result of a failure to finance the services fairly,as discussed in Chapter 5. But often a failure of service delivery is due to dysfunctional organi- zation of the health system, even when the needed inputs exist and financial support is dequate and fairly distributed. Such an organizational failing can result from the wrong arrangements among different parties involved in service delivery, which in turn creates perverse incentives and leads to mistaken choices about what services to provide, to whom to deliver them, or how to ration when it is not possible to meet everyones needs or wants This chapter considers how to choose which services to provide, how to organize provision d how to assure the right incentives for providers The complexities of organizing service provision are illustrated by the following exam- le, which is not at all unusual. a poor young woman walks to a rural government health post with her sick baby. There is no doctor at the post, and there are no drugs. But a nurse gives the mother an oral rehydration kit and explains how to use it. She tells the mother to come back in a couple of days if the baby's diarrhoea continues. The nurse sees only ha dozen patients that day. Meanwhile, at the outpatient clinic of a community hospital about an hour's drive away, several hundred patients are waiting to be seen. Some are given cursory examinations by the doctors there and are able to obtain any prescribed drugs at hospital dispensary. When the outpatient clinic closes, even though it is still early in the day, patients who have not been seen are asked to return the next day, without being given appointments. Some of the doctors then hurry off to work in a private"nursing home"o clinic to supplement their salaries The doctors' low pay and the absence of more qualified staff and drugs at the health post night be shrugged off as the consequences of spending too little. But a lack of resources cannot be blamed for the maldistribution of those resources between the health post and he hospital, the low productivity of the nurse, the under-utilization of the hospital when its
Health Services: Well Chosen, Well Organized? 49 3 HEALTH SERVICES: WELL CHOSEN, WELL ORGANIZED? ORGANIZATIONAL FAILINGS ust as the principal objective of a health system is to improve people’s health, the chief function the system needs to perform is to deliver health services. The other functions matter partly because they contribute to service provision. It is therefore a major failing of the system when effective and affordable health interventions do not reach the populations that would benefit from them. Sometimes this happens because the providers have inadequate skills, or because of a lack of drugs and equipment: these are the consequence of failures of training and investment, as discussed in Chapter 4, or of purchasing, as discussed here and in Chapter 5. Sometimes services are not delivered to potential beneficiaries because of price barriers: this is the result of a failure to finance the services fairly, as discussed in Chapter 5. But often a failure of service delivery is due to dysfunctional organization of the health system, even when the needed inputs exist and financial support is adequate and fairly distributed. Such an organizational failing can result from the wrong arrangements among different parties involved in service delivery, which in turn creates perverse incentives and leads to mistaken choices about what services to provide, to whom to deliver them, or how to ration when it is not possible to meet everyone’s needs or wants. This chapter considers how to choose which services to provide, how to organize provision and how to assure the right incentives for providers. The complexities of organizing service provision are illustrated by the following example, which is not at all unusual. A poor young woman walks to a rural government health post with her sick baby. There is no doctor at the post, and there are no drugs. But a nurse gives the mother an oral rehydration kit and explains how to use it. She tells the mother to come back in a couple of days if the baby’s diarrhoea continues. The nurse sees only half a dozen patients that day. Meanwhile, at the outpatient clinic of a community hospital about an hour’s drive away, several hundred patients are waiting to be seen. Some are given cursory examinations by the doctors there and are able to obtain any prescribed drugs at the hospital dispensary. When the outpatient clinic closes, even though it is still early in the day, patients who have not been seen are asked to return the next day, without being given appointments. Some of the doctors then hurry off to work in a private “nursing home” or clinic to supplement their salaries. The doctors’ low pay and the absence of more qualified staff and drugs at the health post might be shrugged off as the consequences of spending too little. But a lack of resources cannot be blamed for the maldistribution of those resources between the health post and the hospital, the low productivity of the nurse, the under-utilization of the hospital when its
The World Health Report 2000 clinic closes early, the failure to have some doctors on duty over a longer interval, and the waste of people's time in waiting and then having to return another day because there is no nd of both in initial investments and training and then in service delivery or the lack thereof. If the story has a happy ending for the mother and baby, it is only because the child was lucky to have diarrhoea and not malaria or some other condition the nurse could not recognize or could not treat, or requiring care which the mother would have to pay for out of pocket. Getting even limited care for free may also be the reason the mother goes to a public facility rather than to one of the private pharmacies or traditional healers, patronized by large numbers of people This chapter looks at how to set priorities for which services health systems should provide, and at the choices and mechanisms involved in rationing so as to make priorities effective. It then considers the organizational factors that help to make sure that the services reach people at the right time PEOPLE AT THE CENTRE OF HEALTH SERVICES The story of the mother and baby illustrates another fact about health systems: service delivery is where people meet most directly, as providers and users of interventions. But people play more than those two roles, as Figure 3.1 indicates. At the centre of service delivery is the patient, in the case of clinical interventions, or the affected population, in the ase of non-personal public health services. People are also consumers, because they be- have in ways that influence their health, including their choices about seeking and utilizing health care. The consumer may be the patient, or someone such as a mother acting on his Figure 3. 1 The multiple roles of people in health systems Contributors Patients and populations Production of goods nd services Providers
50 The World Health Report 2000 clinic closes early, the failure to have some doctors on duty over a longer interval, and the waste of people’s time in waiting and then having to return another day because there is no system of appointments. These problems reflect failures of priority and of organization, both in initial investments and training and then in service delivery or the lack thereof. If the story has a happy ending for the mother and baby, it is only because the child was lucky to have diarrhoea and not malaria or some other condition the nurse could not recognize or could not treat, or requiring care which the mother would have to pay for out of pocket. Getting even limited care for free may also be the reason the mother goes to a public facility rather than to one of the private pharmacies or traditional healers, patronized by large numbers of people. This chapter looks at how to set priorities for which services health systems should provide, and at the choices and mechanisms involved in rationing so as to make priorities effective. It then considers the organizational factors that help to make sure that the right services reach people at the right time. PEOPLE AT THE CENTRE OF HEALTH SERVICES The story of the mother and baby illustrates another fact about health systems: service delivery is where people meet most directly, as providers and users of interventions. But people play more than those two roles, as Figure 3.1 indicates. At the centre of service delivery is the patient, in the case of clinical interventions, or the affected population, in the case of non-personal public health services. People are also consumers, because they behave in ways that influence their health, including their choices about seeking and utilizing health care. The consumer may be the patient, or someone such as a mother acting on his Figure 3.1 The multiple roles of people in health systems Contributors Financing Patients and populations Production of goods and services Providers Consumers Health care behaviours Stewardship Citizens
Health Services: Well Chosen, Well Organized or her behalf, or simply a person making choices about diet, lifestyle and other factors that affect health Sometimes the roles of consumer, patient and provider are all combined into one per- son and one moment, as happens when a woman gives birth with little or no assistance Every minute, thousands of women across the world are giving birth. In countries where the attendance by trained staff is low(9% in Nepal, 8% in Bangladesh and Ethiopia, 5% in Equatorial Guinea, 4% in Gabon and Mauritania, 2% in Somalia), births usually take place in the presence of lay birth attendants or family members. Even when the delivery is by caesarian section with a trained provider, each woman must still actively participate in birth Often the choices people make, particularly about seeking care, are influenced by the responsiveness of the system as described in Chapter 2 Utilization does not depend only on the consumer's perception of need or of the likelihood of benefiting from a service Although marked differences exist between societies, the basic tenets of ethical provider- patient relations usually include similar elements of consent, confidentiality, discretion, veracity and fidelity(1). Calling the elements of dignity, autonomy and confidentiality that go into responsiveness"respect for persons"underscores the importance of people, and not imply patients, as the recipients of health services People also play the role of contributors to financing the system. Millions of poor people pay for all of the services they receive at the time they are ill. In health systems with fairer contribution arrangements, people who are not sick contribute most to financing the health system, through taxes or health insurance contributions, so that the contributor may or may not be the patient or the consumer. Finally, as citizens and particularly as officials whose job it is to represent citizens and protect their interests- people participate in the system as stewards. In the same way that all four functions have to be carried out in order for the system to perform well, people have to play all these roles in order for the potentia benefits to reach the patients and populations at the centre. People act as providers, consumers, contributors and stewards of the health system dur- ng their adult working lives. In contrast, they can assume the role of patients at any time from before birth right up to death. The need to deliver services for people at all ages greatly complicates the choice of what services to emphasize and how to organize them, because people are exposed to different risks at different ages, and priority to any particular inter vention is at least in part also a priority for a particular age group. These differences are what make a demographic transition-lower mortality and longer life -into an epidemio logical transition -a change in the relative importance of different threats to health, par- ticularly a shift from communicable to noncommunicable diseases. Besides the variation with age, there are marked differences in disease pattens amon regions, countries and specific population groups. For example, in Africa infectious diseases account for nearly 70% of the disease burden, as Annex Table 4 shows. In Europ account for less than 20%. The poor suffer more from infectious diseases than the rich(2) but over the next 20 years even the poor will be vulnerable to cardiovascular and cerebro vascular diseases linked to tobacco use(3). It may seem natural to focus health system choices on the causes that account for a large share of the disease burden, either because they affect large populations or because they cause substantial health loss for each victim However, all that health systems can actually do is to deliver specific services or inter- mentions. Even if a first choice is made to concentrate on one or more particular diseases, it is still necessary to decide what to do-that is, which specific interventions to emphasize The number of interventions available greatly exceeds the number of diseases, and the
Health Services: Well Chosen, Well Organized? 51 or her behalf, or simply a person making choices about diet, lifestyle and other factors that affect health. Sometimes the roles of consumer, patient and provider are all combined into one person and one moment, as happens when a woman gives birth with little or no assistance. Every minute, thousands of women across the world are giving birth. In countries where the attendance by trained staff is low (9% in Nepal, 8% in Bangladesh and Ethiopia, 5% in Equatorial Guinea, 4% in Gabon and Mauritania, 2% in Somalia), births usually take place in the presence of lay birth attendants or family members. Even when the delivery is by caesarian section with a trained provider, each woman must still actively participate in birth and the postpartum recovery. Often the choices people make, particularly about seeking care, are influenced by the responsiveness of the system as described in Chapter 2. Utilization does not depend only on the consumer’s perception of need or of the likelihood of benefiting from a service. Although marked differences exist between societies, the basic tenets of ethical provider– patient relations usually include similar elements of consent, confidentiality, discretion, veracity and fidelity (1). Calling the elements of dignity, autonomy and confidentiality that go into responsiveness “respect for persons” underscores the importance of people, and not simply patients, as the recipients of health services. People also play the role of contributors to financing the system. Millions of poor people pay for all of the services they receive at the time they are ill. In health systems with fairer contribution arrangements, people who are not sick contribute most to financing the health system, through taxes or health insurance contributions, so that the contributor may or may not be the patient or the consumer. Finally, as citizens – and particularly as officials whose job it is to represent citizens and protect their interests – people participate in the system as stewards. In the same way that all four functions have to be carried out in order for the system to perform well, people have to play all these roles in order for the potential benefits to reach the patients and populations at the centre. People act as providers, consumers, contributors and stewards of the health system during their adult working lives. In contrast, they can assume the role of patients at any time from before birth right up to death. The need to deliver services for people at all ages greatly complicates the choice of what services to emphasize and how to organize them, because people are exposed to different risks at different ages, and priority to any particular intervention is at least in part also a priority for a particular age group. These differences are what make a demographic transition – lower mortality and longer life – into an epidemiological transition – a change in the relative importance of different threats to health, particularly a shift from communicable to noncommunicable diseases. Besides the variation with age, there are marked differences in disease patterns among regions, countries and specific population groups. For example, in Africa infectious diseases account for nearly 70% of the disease burden, as Annex Table 4 shows. In Europe, they account for less than 20%. The poor suffer more from infectious diseases than the rich (2) , but over the next 20 years even the poor will be vulnerable to cardiovascular and cerebrovascular diseases linked to tobacco use (3). It may seem natural to focus health system choices on the causes that account for a large share of the disease burden, either because they affect large populations or because they cause substantial health loss for each victim. However, all that health systems can actually do is to deliver specific services or interventions. Even if a first choice is made to concentrate on one or more particular diseases, it is still necessary to decide what to do – that is, which specific interventions to emphasize. The number of interventions available greatly exceeds the number of diseases, and the
appropriate strategy for disease control may depend on just one intervention or on a com bination of several activities. To make matters more complicated, a given intervention may be effective against more than one disease or cause, because it works on a common risk factor or symptom. This is especially true of diagnostic activities: taking blood samples, or lems. Thus, emphasizing an intervention, or investing in the inputs necessary for providing it, does not automatically focus effort on just one disease. Setting priorities also involves cular intervention should be used for The range of diagnostic approaches and medical and surgical interventions for many conditions is extensive and likely to expand significantly over the coming decades. This means that services need to be designed and implemented so as to allow for innovation and adaptation to new health challenges and interventions, all the while responding to the needs of people who differ in age, income, habits and health risks. No health system can meet all those needs, even in rich countries So either there must be conscious choices of what services should have priority, or the services actually delivered may bear little relation to any reasonable criterion of what is most important CHOOSING INTERVENTIONS GETTING THE MOST HEALTH FROM RESOURCES The ancient Greeks believed that Asclepios, the god of medicine, had two daughters One, Hygieia, was responsible for prevention, while the other, Panacea, was responsible for cure(4). While some preventive activities are applied to specific individuals-immunization is the clearest example -the distinction between prevention and cure or treatment corre sponds closely to the difference between public health interventions directed to entire populations and clinical interventions directed to individuals. Since there is usually de mand for the latter but there may not be any demand for the former, one of the principal tasks in choosing which services should have priority is that of balancing public health and clinical activities(5) To require the health system to obtain the greatest possible level of health from the resources devoted to it, is to ask that it be as cost-effective as it can be. This is the basis for emphasizing those interventions that give the most value for money, and giving less prior- ity to those that, much as they may help individuals, contribute little per dollar spent to the improvement of the populations health. It is the implicit basis of the measure of perform- ance with respect to disability-adjusted life expectancy presented in Chapter 2 and Annex Table 10. So far as the level of health is concerned, the allocative efficiency of the health system could be enhanced by moving resources from cost-ineffective interventions to cost- effective ones (6). The potential gains from doing this are sometimes enormous, because the existing pattern of interventions includes some which cost a great deal and produce few additional years of life. For example, a set of 185 publicly-funded interventionsin the United States cost about $21.4 billion per year, for an estimated saving of 592 000 years of life (considering only premature deaths prevented). Re-allocating those funds to the most cost- effective interventions could save an additional 638 000 life years if all potential beneficiar- ies were reached. At the level of specific services, the cost per year of life saved can be as low as $236 for screening and treating newborns with sickle-cell anaemia or as high as $5.4 million for radionuclide emission control (7). In poor countries all the absolute numbers will be smaller, but the ratio between more and less cost-effective actions may still be very
52 The World Health Report 2000 appropriate strategy for disease control may depend on just one intervention or on a combination of several activities. To make matters more complicated, a given intervention may be effective against more than one disease or cause, because it works on a common risk factor or symptom. This is especially true of diagnostic activities: taking blood samples, or using X-rays or other imaging techniques may be appropriate for a great variety of problems. Thus, emphasizing an intervention, or investing in the inputs necessary for providing it, does not automatically focus effort on just one disease. Setting priorities also involves deciding what a particular intervention should be used for. The range of diagnostic approaches and medical and surgical interventions for many conditions is extensive and likely to expand significantly over the coming decades. This means that services need to be designed and implemented so as to allow for innovation and adaptation to new health challenges and interventions, all the while responding to the needs of people who differ in age, income, habits and health risks. No health system can meet all those needs, even in rich countries. So either there must be conscious choices of what services should have priority, or the services actually delivered may bear little relation to any reasonable criterion of what is most important. CHOOSING INTERVENTIONS: GETTING THE MOST HEALTH FROM RESOURCES The ancient Greeks believed that Asclepios, the god of medicine, had two daughters. One, Hygieia, was responsible for prevention, while the other, Panacea, was responsible for cure (4).While some preventive activities are applied to specific individuals – immunization is the clearest example – the distinction between prevention and cure or treatment corresponds closely to the difference between public health interventions directed to entire populations and clinical interventions directed to individuals. Since there is usually demand for the latter but there may not be any demand for the former, one of the principal tasks in choosing which services should have priority is that of balancing public health and clinical activities (5). To require the health system to obtain the greatest possible level of health from the resources devoted to it, is to ask that it be as cost-effective as it can be. This is the basis for emphasizing those interventions that give the most value for money, and giving less priority to those that, much as they may help individuals, contribute little per dollar spent to the improvement of the population’s health. It is the implicit basis of the measure of performance with respect to disability-adjusted life expectancy presented in Chapter 2 and Annex Table 10. So far as the level of health is concerned, the allocative efficiency of the health system could be enhanced by moving resources from cost-ineffective interventions to costeffective ones (6). The potential gains from doing this are sometimes enormous, because the existing pattern of interventions includes some which cost a great deal and produce few additional years of life. For example, a set of 185 publicly-funded interventions in the United States cost about $21.4 billion per year, for an estimated saving of 592 000 years of life (considering only premature deaths prevented). Re-allocating those funds to the most costeffective interventions could save an additional 638 000 life years if all potential beneficiaries were reached. At the level of specific services, the cost per year of life saved can be as low as $236 for screening and treating newborns with sickle-cell anaemia or as high as $5.4 million for radionuclide emission control (7). In poor countries all the absolute numbers will be smaller, but the ratio between more and less cost-effective actions may still be very large
Health Services: Well Chosen, Well Organized Combining calculations of the cost with measures of the effectiveness of interventions nd using them to determine priorities is a very recent development. Early work using such techniques in developing countries looked mainly at the cost-effectiveness of specific dis ease control programmes(8-13).This type of work expanded following publication of the World development report by the World Bank in 1993(14)and subsequent work by WHO (15) Table 3. 1 provides examples of interventions that, if implemented well, can substan- tially reduce the burden of disease, especially among the poor, and do so at a reasonable cost relative to results. Services can also be classified by their importance in the burden of disease of particular age and sex groups, and their cost-effectiveness for those groups(14) Ideally, services with these virtues will also be inexpensive, so that they can be applied to rge beneficiary populations and still imply reasonable total expenditures. However, there is no guarantee that low cost per life saved or healthy life year gained will mean low cost per person: some cost-effective interventions can be very expensive, with great variation Table 3. 1 Interventions with a large potential impact on health outcomes Examples of interventions Main contents of interventions Treatment of tuberculosis Directly observed treatment schedule(DOTS): administration of standard d short-course chemotherapy to all confirmed sputum smear positive cases of TB under supervision in the initial (2-3 months)phase Maternal health and safe motherhood interventions Family planning, prenatal and delivery care, clean and safe delivery so trained birth attendant, postpartum care, and essential obstetric care high risk pregnancies and complications Family planning Information and education; availability and correct use of contraceptives School health interventions Health education and nutrition interventions, induding anti-helminthic treatment, micronutrient supplementation and school meals Integrated management of Case management of acute respiratory infections, diarrhoea, malaria, childhood illness measles and malnutrition; immunization, feeding/breastfeeding ounselling, micronutrient and iron supplementation, anti-helminthic HIV/AIDS prevention Targeted information for sex workers, mass education awarenes ounselling, screening, mass treatment for sexually transmitted diseases, safe blood supply Treatment of sexually transmit- Case management using syndrome diagnosis and standard treatment ted diseases agorithm Immunization (EPI Plus BCG at birth; OPV at birth, 6, 10, 14 weeks: DPT at 6, 10, 14 weeks: HepB at birth, 6 and 9 months (optional); measles at 9 months; TT for women of hild prompt treatment)and sele preventive measures(e. g impregnated bed nets Tobacco control Tobacco tax, information, nicotine replacement, legal action Noncommunicable diseases Selected early screening and secondary prevention and injuries
Health Services: Well Chosen, Well Organized? 53 Combining calculations of the cost with measures of the effectiveness of interventions and using them to determine priorities is a very recent development. Early work using such techniques in developing countries looked mainly at the cost-effectiveness of specific disease control programmes (8–13). This type of work expanded following publication of the World development report by the World Bank in 1993 (14) and subsequent work by WHO (15). Table 3.1 provides examples of interventions that, if implemented well, can substantially reduce the burden of disease, especially among the poor, and do so at a reasonable cost relative to results. Services can also be classified by their importance in the burden of disease of particular age and sex groups, and their cost-effectiveness for those groups (14). Ideally, services with these virtues will also be inexpensive, so that they can be applied to large beneficiary populations and still imply reasonable total expenditures. However, there is no guarantee that low cost per life saved or healthy life year gained will mean low cost per person: some cost-effective interventions can be very expensive, with great variation Examples of interventions Treatment of tuberculosis Maternal health and safe motherhood interventions Family planning School health interventions Integrated management of childhood illness HIV/AIDS prevention Treatment of sexually transmitted diseases Immunization (EPI Plus) Malaria Tobacco control Noncommunicable diseases and injuries Table 3.1 Interventions with a large potential impact on health outcomes Main contents of interventions Directly observed treatment schedule (DOTS): administration of standardized short-course chemotherapy to all confirmed sputum smear positive cases of TB under supervision in the initial (2–3 months) phase Family planning, prenatal and delivery care, clean and safe delivery by trained birth attendant, postpartum care, and essential obstetric care for high risk pregnancies and complications Information and education; availability and correct use of contraceptives Health education and nutrition interventions, including anti-helminthic treatment, micronutrient supplementation and school meals Case management of acute respiratory infections, diarrhoea, malaria, measles and malnutrition; immunization, feeding/breastfeeding counselling, micronutrient and iron supplementation, anti-helminthic treatment Targeted information for sex workers, mass education awareness, counselling, screening, mass treatment for sexually transmitted diseases, safe blood supply Case management using syndrome diagnosis and standard treatment algorithm BCG at birth; OPV at birth, 6, 10, 14 weeks; DPT at 6, 10, 14 weeks; HepB at birth, 6 and 9 months (optional); measles at 9 months; TT for women of child-bearing age Case management (early assessment and prompt treatment) and selected preventive measures (e.g. impregnated bed nets) Tobacco tax, information, nicotine replacement, legal action Selected early screening and secondary prevention
The World Health Report between one health service and another for the same disease. this is clear in the case of malaria, where two interventions that are about equally cost-effective -chloroquine prophy laxis and two annual rounds of insecticide spraying-differ enormously in how much they would cost to apply to all the affected population of a low income African country (16). Cost differences are even greater for interventions against an infection. The reverse is also true: health interventions can be cost-ineffective even when they de not cost very much and are intended to benefit large numbers of people. For example, many service providers continue to rely on antibiotics to treat viral illnesses, even thoug this is known to be ineffective. Even in rich countries, there is a need to ensure that the main output of health services remains focused on effective and affordable public health and clinical interventions In low income countries, where the full range and cost of poss ble interventions significantly outstrip available resources, such wasteful practices deprive other patients of critical treatment. Cost-effectiveness analysis, then, is essential for identifying the services that will pro- duce the most health gain from available resources, but it has to be applied to individual nterventions, not broadly against disease or causes. This requirement means that a large set of interventions needs to be evaluated For all but the richest societies the cost and time quired for such an evaluation may be prohibitive. Moreover, such analysis, as currently practised, often fails to identify existing misallocation of resources because it focuses on the evaluation of new technologies and ignores the existing distribution of productive assets and activities (6) Intervention costs can also vary greatly from one country, context, and intervention mode another(17). A naive generalization could lead to serious mistakes in planning and implementing otherwise effective interventions. Even if they cover a relatively small number of interventions, studies in individual countries or populations are needed to avoid such errors In Guinea, for example, 40 interventions have been studied. These were chosen artly on the basis of more general studies elsewhere, but with detailed local information to confirm what would really be most appropriate in that country(18) Variations in cost and results among interventions are particularly relevant when a com bination of several interventions may be suitable against a particular disease. To take the case of malaria again, at low levels of health expenditure in a country with a high burden of the disease, case management and prophylaxis for pregnant women would be very cost- effective and affordable(16). With more resources available, impregnated mosquito nets could be added- they would prevent more cases but cost more per unit of health benef gained. A single estimate of cost-effectiveness of malaria control could lead to the wrong conclusion that malaria control is not affordable, for example if the estimate for a low in- ome country is based on a programme combining all technically feasible options In gen eral, the most cost-effective combination of services depend ds on the resources available That relation does not, of course, determine the appropriate level of expenditure on malaria control, which depends on what the country can afford, given its other health problems and priorities. In particular, there is no presumption that it should spend only the amount onsistent with one or more of the cheapest interventions. Spending more and using a mixed strategy might yield much greater health gains Misuse of cost-effectiveness analysis could also lead to a serious underestimate of the actual cost of control if the estimate were based on the costs and effectiveness of a single type of intervention but multiple interventions were used. Many factors may alter the ac- tual cost-effectiveness of a given intervention programme during implementation. Thes include: the availability, mix and quality of inputs(especially trained personnel, drugs, equip
54 The World Health Report 2000 between one health service and another, for the same disease. This is clear in the case of malaria, where two interventions that are about equally cost-effective – chloroquine prophylaxis and two annual rounds of insecticide spraying – differ enormously in how much they would cost to apply to all the affected population of a low income African country (16). Cost differences are even greater for interventions against an infection. The reverse is also true: health interventions can be cost-ineffective even when they do not cost very much and are intended to benefit large numbers of people. For example, many service providers continue to rely on antibiotics to treat viral illnesses, even though this is known to be ineffective. Even in rich countries, there is a need to ensure that the main output of health services remains focused on effective and affordable public health and clinical interventions. In low income countries, where the full range and cost of possible interventions significantly outstrip available resources, such wasteful practices deprive other patients of critical treatment. Cost-effectiveness analysis, then, is essential for identifying the services that will produce the most health gain from available resources, but it has to be applied to individual interventions, not broadly against disease or causes. This requirement means that a large set of interventions needs to be evaluated. For all but the richest societies, the cost and time required for such an evaluation may be prohibitive. Moreover, such analysis, as currently practised, often fails to identify existing misallocation of resources because it focuses on the evaluation of new technologies and ignores the existing distribution of productive assets and activities (6). Intervention costs can also vary greatly from one country, context, and intervention mode to another (17). A naive generalization could lead to serious mistakes in planning and implementing otherwise effective interventions. Even if they cover a relatively small number of interventions, studies in individual countries or populations are needed to avoid such errors. In Guinea, for example, 40 interventions have been studied. These were chosen partly on the basis of more general studies elsewhere, but with detailed local information to confirm what would really be most appropriate in that country (18). Variations in cost and results among interventions are particularly relevant when a combination of several interventions may be suitable against a particular disease. To take the case of malaria again, at low levels of health expenditure in a country with a high burden of the disease, case management and prophylaxis for pregnant women would be very costeffective and affordable (16). With more resources available, impregnated mosquito nets could be added – they would prevent more cases but cost more per unit of health benefit gained. A single estimate of cost-effectiveness of malaria control could lead to the wrong conclusion that malaria control is not affordable, for example if the estimate for a low income country is based on a programme combining all technically feasible options. In general, the most cost-effective combination of services depends on the resources available. That relation does not, of course, determine the appropriate level of expenditure on malaria control, which depends on what the country can afford, given its other health problems and priorities. In particular, there is no presumption that it should spend only the amount consistent with one or more of the cheapest interventions. Spending more and using a mixed strategy might yield much greater health gains. Misuse of cost-effectiveness analysis could also lead to a serious underestimate of the actual cost of control if the estimate were based on the costs and effectiveness of a single type of intervention but multiple interventions were used. Many factors may alter the actual cost-effectiveness of a given intervention programme during implementation. These include: the availability, mix and quality of inputs (especially trained personnel, drugs, equip-
Health Services: Well Chosen, Well Organized hent and consumables); local prices, especially labour costs; implementation capacity underlying organizational structures and incentives; and the supporting institutional frame work(17,19) All these obstacles imply that even on the sole criterion of cost-effectiveness, analysis of health system's potential for getting more health from what it spends needs to begin with the current capacities, activities and outcomes, and consider what steps can be taken from that starting point to add, modify or eliminate services. This is likely to have profound impli cations for investment if little can be changed simply by re-directing the existing staff, facili- ties and equipment(20) CHOOSING INTERVENTIONS: WHAT ELSE MATTERS? Cost-effectiveness by itself is relevant for achieving the best overall health, but not nec- essarily for the second health goal, that of reducing inequality Populations with worse than average health may respond less well to an intervention, or cost more to reach or to treat,so that a concern for distribution implies a willingness to sacrifice some overall health gains for other criteria. More generally, cost-effectiveness is only one of at least nine criteria that a health system may be asked to respect. A health system ought to protect people from financial risk, to be consistent with the goal of fair financial contribution. This means that the cost matters, and not only its relation to health results, whether money is public or private. A health system should strive for both horizontal and vertical equity-treating alike all those who face the same health need, and treating preferentially those with the greatest needs-to be consistent with the goal of reducing health inequalities. And it should assure not only that the healthy subsidize the sick, as any prepayment arrangement will do in part, but also that the burden of financing is fairly shared by having the better-off subsidize the less well-off. This generally requires spending public funds in favour of the poor. Figure 3. 2 Questions to ask in deciding what interventions to finance and provide Public good? Significant extemalities dequate demand? Catastrophic cost? Cost-effective? provide Finance publicly Source: Adapted from Musgrove P Public spending on health care: how are different criteria related? Health Policy 1999, 47(3): 207-223
Health Services: Well Chosen, Well Organized? 55 ment and consumables); local prices, especially labour costs; implementation capacity; underlying organizational structures and incentives; and the supporting institutional framework (17, 19). All these obstacles imply that even on the sole criterion of cost-effectiveness, analysis of a health system’s potential for getting more health from what it spends needs to begin with the current capacities, activities and outcomes, and consider what steps can be taken from that starting point to add, modify or eliminate services. This is likely to have profound implications for investment if little can be changed simply by re-directing the existing staff, facilities and equipment (20). CHOOSING INTERVENTIONS: WHAT ELSE MATTERS? Cost-effectiveness by itself is relevant for achieving the best overall health, but not necessarily for the second health goal, that of reducing inequality. Populations with worse than average health may respond less well to an intervention, or cost more to reach or to treat, so that a concern for distribution implies a willingness to sacrifice some overall health gains for other criteria. More generally, cost-effectiveness is only one of at least nine criteria that a health system may be asked to respect. A health system ought to protect people from financial risk, to be consistent with the goal of fair financial contribution. This means that the cost matters, and not only its relation to health results, whether money is public or private. A health system should strive for both horizontal and vertical equity – treating alike all those who face the same health need, and treating preferentially those with the greatest needs – to be consistent with the goal of reducing health inequalities. And it should assure not only that the healthy subsidize the sick, as any prepayment arrangement will do in part, but also that the burden of financing is fairly shared by having the better-off subsidize the less well-off. This generally requires spending public funds in favour of the poor. Yes No Figure 3.2 Questions to ask in deciding what interventions to finance and provide Yes No Yes No No Leave to regulated private market Yes Yes Yes No Finance publicly No Do not provide Yes No Source: Adapted from Musgrove P. Public spending on health care: how are different criteria related? Health Policy, 1999, 47(3): 207–223. Public good? Significant externalities? Insurance appropriate? Catastrophic cost? Beneficiaries poor? Cost-effective? Public? Private? Adequate demand?
The World Health Report Public money is also the principal, if not the only significant way to pay for public goods, interventions which private markets will not offer because buyers cannot appropriate all le benefits, and non-buyers cannot be excluded. The same is true for partly public goods with large extermalities-that is, spillovers of benefits to non-users. Private demand for such services will generally be inadequate Interventions of this sort are most important in communicable disease control, where treating one case may prevent many others, and especially where it is the environment, rather than identifiable individuals, that is treated nalysts and decision-makers also correctly argue that resource allocation decisions affect ing the entire health system must take into account social concems, such as a priority for the seriously ill and for promoting the well-being of fut rizes the choices for spending public or publicly mandated funds, showing how the differ- ent criteria should be considered sequentially and how they can be used to determine whether an intervention is worth buying or not. This way of setting priorities reinforces the emphasis on the two goals of health outcomes and financial faimess. It also emphasizes the importance of public health activities, by starting with interventions that are public or quasi-public go o. Ignoring these other criteria and using only disease burden and cost-effectiveness as a hod for determining priorities can lead to a"race for the bottom of the barrel"among advocates of different interventions, each trying to prove that their programme achieves a greater benefit or costs less than other programmes, sometimes without considering the full range of complicating factors. This often leads to underestimates of the real cost of programmes and their subsequent failure during implementation because of resource shor Too narrow an approach also ignores the important role that the public sector should be laying in protecting the poor and addressing insurance market failure- the tendency of insurance to exclude precisely those people who need it most, because they are at greater than usual risk of ill-health. Many families will be faced at some time with a health proble of low frequency for which there is an effective but high cost intervention. Those who can afford it will turn to the private sector for the needed care. But without some form of orga ized insurance this option is usually too expensive for the poor who will turn to public hospitals as a place of last recourse. Often this leads to inappropriate and excessive use of hospital care, and it undermines the financing function that health systems should be Actual health systems always deliver services that correspond to a variety of criteria. The frontier of the possible which defines relative performance reflects this fact, since it is based on actual outcomes relative to health expenditure and human capital. A health system designed and operated solely to pursue cost-effectiveness might be able to achieve much longer average life expectancy or more equality or both, but it would correspond much less to what people want and exp What makes it particularly difficult to set priorities among interventions and beneficiar- ies of health services is that the different criteria are not always compatible. In particular, efficiency and equity can easily be in conflict, because the costs of treating a given health problem differ among individuals, or because the severity of a disease bears little relation to e effectiveness of interventions against it or to their cost. Cost-effectiveness is never the only justification for spending public resources, but it is the test that must be met most often the beneficiaries are not poor, so that they can make their own judgements about the value of a particular purchase and the market can be left to supply it; or when protection from
56 The World Health Report 2000 Public money is also the principal, if not the only significant way to pay for public goods, interventions which private markets will not offer because buyers cannot appropriate all the benefits, and non-buyers cannot be excluded. The same is true for partly public goods with large externalities – that is, spillovers of benefits to non-users. Private demand for such services will generally be inadequate. Interventions of this sort are most important in communicable disease control, where treating one case may prevent many others, and especially where it is the environment, rather than identifiable individuals, that is treated. Analysts and decision-makers also correctly argue that resource allocation decisions affecting the entire health system must take into account social concerns, such as a priority for the seriously ill and for promoting the well-being of future generations. Figure 3.2 summarizes the choices for spending public or publicly mandated funds, showing how the different criteria should be considered sequentially and how they can be used to determine whether an intervention is worth buying or not. This way of setting priorities reinforces the emphasis on the two goals of health outcomes and financial fairness. It also emphasizes the importance of public health activities, by starting with interventions that are public or quasi-public goods. Ignoring these other criteria and using only disease burden and cost-effectiveness as a method for determining priorities can lead to a “race for the bottom of the barrel” among advocates of different interventions, each trying to prove that their programme achieves a greater benefit or costs less than other programmes, sometimes without considering the full range of complicating factors. This often leads to underestimates of the real cost of programmes and their subsequent failure during implementation because of resource shortages. Too narrow an approach also ignores the important role that the public sector should be playing in protecting the poor and addressing insurance market failure – the tendency of insurance to exclude precisely those people who need it most, because they are at greater than usual risk of ill-health. Many families will be faced at some time with a health problem of low frequency for which there is an effective but high cost intervention. Those who can afford it will turn to the private sector for the needed care. But without some form of organized insurance this option is usually too expensive for the poor who will turn to public hospitals as a place of last recourse. Often this leads to inappropriate and excessive use of hospital care, and it undermines the financing function that health systems should be playing. Actual health systems always deliver services that correspond to a variety of criteria. The frontier of the possible which defines relative performance reflects this fact, since it is based on actual outcomes relative to health expenditure and human capital. A health system designed and operated solely to pursue cost-effectiveness might be able to achieve much longer average life expectancy or more equality or both, but it would correspond much less to what people want and expect. What makes it particularly difficult to set priorities among interventions and beneficiaries of health services is that the different criteria are not always compatible. In particular, efficiency and equity can easily be in conflict, because the costs of treating a given health problem differ among individuals, or because the severity of a disease bears little relation to the effectiveness of interventions against it or to their cost. Cost-effectiveness is never the only justification for spending public resources, but it is the test that must be met most often in deciding which interventions to buy. And it can be set aside only when costs are low and the beneficiaries are not poor, so that they can make their own judgements about the value of a particular purchase and the market can be left to supply it; or when protection from
Health Services: Well Chosen, Well Organized catastrophic cost is the overriding consideration and prepayment can protect against that risk. Determining the priorities for a health system is an exercise that draws on a variety of technical, ethical and political criteria and is always subject to modification as a result of experience in implementation, the reaction of the public, and the inertia of financing and vestment(21) CHOOSING INTERVENTIONS WHAT MUST BE KNOWN? Setting priorities realistically requires a great deal of information, starting with epide- miological data. Major progress has been made recently in understanding global health and disease patterns(14, 15, 22), including analysis of risk factors which influence severa diseases at once. The most significant of such risk factors are malnutrition in children, and poor water and sanitation practices. Other major risk factors include unsafe sex, alcohe indoor pollution, tobacco, occupational hazards, hypertension and physical inactivity. The ablic health services in a given country should attempt to deal with such preventable risk factors, taking account of local contexts. For example, the origins of malnutrition vary greatly from one country to another and from one region to another. In sub-Saharan Africa and south Asia, the problem is often a combination of micronutrient deficiency and absolute shortage of calories. In central and eastern Europe, malnutrition is often "poor calories rather than a "lack of calories"-a diet too high in fat and refined starch. Public health activities will therefore vary, depending on local risk factors and diseases conditions Although there are good data on national patterns of risk and disease today, few coun tries break this information down sub-nationally by income level, sex or vulnerable groups, such as the handicapped, minority ethnic populations, and the frail elderly. Even fewer countries have information on the health-seeking behaviour of those groups or their utili ation of health care facilities without such information the effectiveness of interventions is difficult to assess, as the same intervention may have very different effects when applie to different population Governments need to know how to influence the health-seeking behaviour of targ groups in need of care. For example, intergroup variations in under-5 mortality are particu larly large in Brazil, Nicaragua, and the Philippines, whereas in Ghana, Pakistan, and Viet Nam these differences are much smaller. This shows the need for a greater emphasis on equity in providing health services in the former countries(23). And there are often signifi- cant differences in the utilization of preventive and clinical medical attention from one intervention to another, in the same country. In Peru, differences between the rich and poor are far greater with respect to attended deliveries than with respect to immunization(24), gely because of the much higher cost of deliveries A key recommendation for policy-makers is to collect and combine data on risk factors, health conditions and interventions with data from household and facilities surveys, focus groups and other qualitative methods, and academic studies, since global and national aggregate data may not reflect local needs. Public health and clinical services should be customized to respond to the latter, and should allow for innovative adaptation during implementation. While gathering and analysing such data is more difficult in the very poorest countries which need this type of analysis the most, the methods are becoming routine and more easily used even at low incomes(25) The following steps will make health systems more likely to produce effective interven ions at an affordable cost, especially for needy populations
Health Services: Well Chosen, Well Organized? 57 catastrophic cost is the overriding consideration and prepayment can protect against that risk. Determining the priorities for a health system is an exercise that draws on a variety of technical, ethical and political criteria and is always subject to modification as a result of experience in implementation, the reaction of the public, and the inertia of financing and investment (21). CHOOSING INTERVENTIONS: WHAT MUST BE KNOWN? Setting priorities realistically requires a great deal of information, starting with epidemiological data. Major progress has been made recently in understanding global health and disease patterns (14, 15, 22), including analysis of risk factors which influence several diseases at once. The most significant of such risk factors are malnutrition in children, and poor water and sanitation practices. Other major risk factors include unsafe sex, alcohol, indoor pollution, tobacco, occupational hazards, hypertension and physical inactivity. The public health services in a given country should attempt to deal with such preventable risk factors, taking account of local contexts. For example, the origins of malnutrition vary greatly from one country to another and from one region to another. In sub-Saharan Africa and south Asia, the problem is often a combination of micronutrient deficiency and absolute shortage of calories. In central and eastern Europe, malnutrition is often “poor calories” rather than a “lack of calories” – a diet too high in fat and refined starch. Public health activities will therefore vary, depending on local risk factors and diseases conditions. Although there are good data on national patterns of risk and disease today, few countries break this information down sub-nationally by income level, sex or vulnerable groups, such as the handicapped, minority ethnic populations, and the frail elderly. Even fewer countries have information on the health-seeking behaviour of those groups or their utilization of health care facilities. Without such information, the effectiveness of interventions is difficult to assess, as the same intervention may have very different effects when applied to different populations. Governments need to know how to influence the health-seeking behaviour of target groups in need of care. For example, intergroup variations in under-5 mortality are particularly large in Brazil, Nicaragua, and the Philippines, whereas in Ghana, Pakistan, and Viet Nam these differences are much smaller. This shows the need for a greater emphasis on equity in providing health services in the former countries (23). And there are often significant differences in the utilization of preventive and clinical medical attention from one intervention to another, in the same country. In Peru, differences between the rich and poor are far greater with respect to attended deliveries than with respect to immunization (24), largely because of the much higher cost of deliveries. A key recommendation for policy-makers is to collect and combine data on risk factors, health conditions and interventions with data from household and facilities surveys, focus groups and other qualitative methods, and academic studies, since global and national aggregate data may not reflect local needs. Public health and clinical services should be customized to respond to the latter, and should allow for innovative adaptation during implementation. While gathering and analysing such data is more difficult in the very poorest countries which need this type of analysis the most, the methods are becoming routine and more easily used even at low incomes (25). The following steps will make health systems more likely to produce effective interventions at an affordable cost, especially for needy populations