Sergio Bautista-Arredondo National Institute of Public Health Mexico Cost Benefit / Cost Effectiveness Analysis Impact Evaluation Support Network Health Results-Based Financing Sergio Bautista-Arredondo National Institute of Public Health Mexico

CBA and CEA CBA – What is the net social benefit resulting from a program / intervention? Measured in monetary terms CEA – What is cost per unit of outcome “purchased” with an intervention? Cost per birth attended by skilled health personnel Cost per vaccinated child

Why in the context of impact evaluation? Impact Evaluation tells whether an intervention works or not What is the effect of the intervention? CBA / CEA tells how much the effect costs Efficiency implications Equity implications

How to do it? Measure the consequences of the intervention Effects Costs CBA : determine the net benefits C - E Value effects in monetary terms CEA : determine the cost per unit of outcome: C / E

Objective Evaluate the efficiency and sustainability of different approaches of HRBF Assess the incremental costs of these interventions, as well as their impact To develop costing protocols for the country impact evaluations in the HRBF pilot projects Appropriate to assess cost-effectiveness and cost-benefit of RBF interventions

Costing HRBF Measuring costs of the interventions Relevant categories Measuring issues Data sources Aggregating benefits / effects of the interventions CBA Willingness to pay Other alternatives DALYs QUALYs

Costing HRBP Measuring costs of the interventions Relevant categories Measuring issues Data sources Aggregating benefits / effects of the interventions CBA Willingness to pay Other alternatives DALYs QUALYs

Relevant Categories HRBF Administration Management of the programs Implementation Monetary incentives Training / contracting staff Increasing equipment Monitoring system Developing the system Data entry and management Audits and verification mechanisms Staff

General vs Specific Important differences among countries: Health System M&E existing systems HRBF interventions Develop a general protocol that will have to be adapted in each country

Measuring Issues Perspective Time frame Measure initial / fixed costs Implementing agency / agencies Time frame Measure the marginal/incremental costs of implementation between baseline and follow up Able to assess the marginal cost of the impact observed Measure initial / fixed costs Measure ongoing / variable costs Take scale into consideration

Data Sources Administrative data Survey data Budget information from the three components Survey data Facility level surveys to assess Allocation of resources to specific components of the program and to specific outcomes Validate administrative data

Allocation of costs to outcomes Labor L C I Clinic Capital Inputs Vaccined Children Cancer tests performed Controled diabetes patients

Costing HRBP Measuring costs of the interventions Relevant categories Measuring issues Data sources Aggregating benefits / effects of the interventions CBA Willingness to pay Other alternatives DALYs QUALYs

Cost Benefit Analysis In order to aggregate different health outcomes: Conduct cost-benefit analysis – we need to value in monetary terms the outcomes of the interventions One approach: contingent valuation Measuring wtp for contingent states or interventions The objective is to determine the maximum monetary amount that individuals are willing to pay for the state or intervention Estimate weights to add up different outcomes

Willingness to pay Describing the hypothetical intervention that achieves the outcome of interest and eliciting the wtp from respondents: Forces respondents to consider trade-offs between attributes Makes the frame of reference explicit to respondents via the inclusion of an array of attributes and alternatives Enables implicit prices to be estimated for attributes of interventions Enables welfare impacts to be estimated for multiple scenarios

DALYs Disability adjusted life years (DALY) DALYs for a disease are the sum of the years of life lost due to premature mortality (YLL) in the population and the years lost due to disability (YLD) for incident cases of the health condition DALY = YLL + YLD

QUALYs A quality-adjusted life-year (QALY) takes into account both quantity and the quality of life generated by healthcare interventions It is the arithmetic product of life expectancy and a measure of the quality of the remaining life-years Perfect health = 1 and Death = 0

Sources of data Household Survey Estimate QALYs or DALYs Include a wtp module in the household questionnaire Estimate QALYs or DALYs These weights have been estimated for most common health outcomes For different contexts