Results Based Financing for Health Impact Evaluation Workshop Tunis, Tunisia October Evaluating the Cost and Financial Impact of RBF Schemes
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1 Results Based Financing for Health Impact Evaluation Workshop Tunis, Tunisia October 2010 Evaluating the Cost and Financial Impact of RBF Schemes Logan Brenzel, PhD
2 Why consider cost and financial analysis of RBF schemes? RBF strategies are expensive for low-income countries and cannot be sustained. Examine affordability and sustainability of strategies There are cheaper and more cost-effective approaches to achieving the health MDGs and improving quality of care. Undertake cost-effectiveness analysis of strategies. RBF mechanisms based on fee-for-service are likely to increase the cost of providing services, making them less efficient. Conduct analysis to look at efficiency changes in service delivery 2
3 Benefits of economic and financial analysis to policy makers Resources for health are limited in every country Resource allocation implies tradeoffs between programs and interventions Useful to quantify these tradeoffs and make them more explicit and transparent Financial analysis provides useful information for planning and budgeting Economic analysis (e.g., CEA) provides a rigorous and systematic framework for comparing alternative approaches 3 Combines financial and cost information with measures of outcomes
4 What do we know so far? Very few studies (published) examining costs of CCTs Comparative study of the efficiency of CCT programs in Mexico, Nicaragua and Honduras Cash-Transfer Ratio (CTR) changes over time Ranges from (Mex); (Hond); (Nic) Limited evidence on cost, cost-effectiveness, or financing of supply-side RBF mechanisms There is a major gap in our knowledge and critical need for cost and financing analysis to be part of impact evaluation for RBF. Contribute to decision-making around whether to introduce RBF, whether to scale-up 4
5 Cost analysis: definitions A cost reflects the value of resources used to produce a good or service. Notion of opportunity cost: value of services or time foregone Examples: Annualized cost of new equipment and vehicles purchased to ensure supply of health services for a CCT Value of time of volunteers involved in verification of RBF outputs and quality of care Value of transfers to households and bonuses to facilities 5
6 6
7 Cost analysis: perspective & scope What will be measured and evaluated depends on the type of question to be analyzed Health facility costs: costs of providing target services + bonuses Health system costs: costs of additional monitoring, supervision, verification, evaluation, targeting and other systems Household costs: Costs to obtain services (time and travel costs) Community costs: Costs of community involvement in managing and monitoring RBF schemes. External agency costs: Funding provided to support interventions and/or studies Do we examine new and additional costs as a result of the RBF mechanism, or look at changes in costs from initial conditions (baseline)? 7
8 Common ways of examining costs Relative to output Fixed costs: level does not vary with output (building) Variable costs: level varies with each unit of output (vaccine) Semi-variable costs: level varies somewhat with output (labor) Relative to user or unit Direct costs: incurred directly by user (user fee) Indirect costs (value of foregone earnings due to illness) Relative to frequency 8 Investment or capital costs: costs made to improve physical plant and quality of durable goods (vehicles) Operating or recurrent costs: costs related to ongoing running of facilities and health system
9 Cost elements for RBF schemes Bonus payments and household transfers Service delivery costs New supplies, equipment, staffing put in place Systems costs HMIS Targeting Financial transfers Supervision & management Community-based costs Monitoring & evaluation costs Verification Studies 9
10 Other considerations for costing Time frame to be covered by the analysis Annual cost Unit of analysis Total facility cost Unit cost of services Data sources Budget & expenditure information Analysis and valuation of inputs used (survey instrument) Data collection approaches Top-down: step-down analysis Bottom-up: survey of inputs 10
11 Denominators in RBF cost analysis Total visits Selected outputs based on target conditions Number of institutional births Number of children vaccinated Number of postnatal consultations Composite outputs Number of fully vaccinated children Number of women with full prenatal consultations Outcomes Changes in quality scores Healthy years of life gained/lost; DALYs Health impact measures 11
12 Three potential areas of study Cost-effectiveness of RBF interventions Comparison of similar types of RBF mechanisms in different countries Comparison of CEA of RBF mechanisms with other health systems strategies Comparison of baseline with follow-up Affordability and sustainability of RBF mechanisms Comparison of total resource requirements and available financing (gap analysis) Comparison of resource requirements with GHE, GDP Impact of RBF on the efficiency of service delivery Statistical analysis of health facility costs and outputs to measure returns to scale (RTS)- baseline and follow-up 12
13 Approaches: CEA Demand & supply-side RBF interventions Facility-based component: Sample of health facilities for analysis Piggy-back onto existing facility questionnaire Analysis of systems costs: Incorporate verification, supervision, monitoring, other systems costs through input and budget analysis Household component: value of transfers Unit costs; cost/daly; cost/quality improvement score Analysis: Excel-based comparisons of incremental costeffectiveness ratios (ICERs); statistical analysis 13
14 Limitations to cost analysis Costing is a subjective exercise Allocation of joint costs Need for standardized assumptions for data collection and analysis Interpretation of results CEA a relative measure- need a good comparator Confidence intervals around point estimates sensitivity testing Point estimates can be misleading Driven by level of scale which can change over time Does not address distributional aspects 14
15 Example Type of Intervention Supply-side RBF Supply- & demandside RFB Project costs: ($ 000s) - Transfers to facilities $300 $300 - Transfers to households $200 - Monitoring costs $12 $180 - Administration costs $4 $10 Total Costs $316 $690 Project benefits: Deaths averted (000s) Illnesses averted (000s) DALYs Additional visits (000s) Population (m) Number of facilities Cost-effectiveness & Unit Costs Cost/Death averted $6.32 $6.90 Cost/DALY $ $ Cost/visit $0.42 $0.55 Cost/facility $525 $1,150 Cost/capita $0.01 $0.02
16 Approaches: Efficiency analysis RBF mechanisms assumed to change the way that facilities organize themselves to produce results in response to the incentive Based on results of facility costing Assessment of returns-to-scale C = f (Q, P, Z) Comparison of marginal to average costs STATA-based analysis 16
17 Approaches: Financial analysis Focus on cost of transfers, bonuses, and additional systems costs Analysis of financial flows: who is paying for what Generation of indicators: Total cost requirement per year RBF cost as a % of GHE, THE, GDP Gap analysis between requirements and available financing Excel-based analysis 17
18 Next Steps Identify countries with interest in incorporating cost and financing analysis HRITF-supported or other countries Develop customized plans per country Design Define data sources, collection, entry, analysis Budget Provide capacity building & technical support Finalize a guide for data collection and analysis; revise and pilot data collection instruments, etc. 18
19 19 THANK YOU!
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