1. The Mysteries of Assessing Value For Money in HIV Service Delivery Unlocked: Principles, Group Exercises and Examples Part 2 Excel exercises: Mead Over Senior Fellow Center for Global Development International AIDS Society Kuala Lumpur, Malaysia July 3, 2013

2. Overview of this session Using Excel to compute cost-benefit and cost- effectiveness numbers The impact of discounting on the breakeven point for Treatment as Prevention Revisiting the cost-effectiveness of MC

3. Please copy a thumb drive onto your computer’s desktop Verify that your thumb drive looks like this Copy onto your computer Pass the thumb drive on to someone else

4. Drummond's check-list for assessing economic evaluations 1. Well-defined question? 2. A comprehensive description of the competing alternatives given? 3. Was effectiveness established? 4. All costs and consequences for each alternative identified? 5. Costs and consequences measured accurately? 6. Cost and consequences valued credibly? 7. Costs and consequences adjusted for differential timing (discounting)? 8. Incremental analysis of costs and consequences of alternatives? 9.Allowance for uncertainty? 10. Did the discussion of study results include all issues of concern to users? (Source: (Drummond M et al. Methods for the economic evaluation of health care programmes. 2nd ed. Oxford. Oxford University Press. 1997 from http://www.nlm.nih.gov/nichsr/edu/healthecon/drummond_list.html)

5. USING EXCEL TO COMPUTE COST- BENEFIT AND COST-EFFECTIVENESS NUMBERS

6. Let’s build a cost-benefit analysis from the ground up See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis

7. In CBA, we can compute net benefits each year See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (2)

8. For an introduction to discounting in CEA for health see p.155-157 Source: Over, M., Economics for Health Sector Analysis: Concepts and Cases, World Bank, 1993

9. Discounting future costs and benefits See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (3)

10. Experiment with changing the discount rate See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (4)

11. An investment “breaks even” when the initial cost is recovered: “The payback period” See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (5)

12. How does the discount rate affect the time until an investment breaks even? See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (6)

13. As a bridge to CEA, note that CBA could be split into two parts… See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (7)

14. As an alternative to the NPV, CBA can present a CB ratio See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (8)

15. The cost-benefit ratio changes with the time horizon See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CB Analysis (9)

16. CEA calculations look a lot like the computation of a cost-benefit ratio See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CE Analysis

17. CE ratio also depends on the time horizon See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: CE Analysis (2)

18. THE IMPACT OF DISCOUNTING ON THE BREAKEVEN POINT FOR TREATMENT AS PREVENTION

19. Granich et al compare the costs of UTT to the 2010 WHO guidelines: CD4 < 350 See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: Granich Brkevn

20. With a zero discount rate, by the year 2055, UTT would be cost-saving See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: Granich Brkevn

21. With a 3% discount rate, by the year 2075, UTT would be cost-saving See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: Granich Brkevn (2)

22. With a 10% discount rate, UTT would never be cost-saving See: Mead_Over_CBA_CEA_Exercises_KL_2013.xls, Sheet: Granich Brkevn (3)

23. REVISITING THE COST-EFFECTIVENESS OF MALE CIRCUMCISION

24. Inputs on costs and effects Source: Spreadsheet for Kahn JG, Marseille E, Auvert B. Cost-effectiveness of male circumcision for HIV prevention in a South African setting. PLoS Med 2006

25. One of these, the infection rate, is a bit tricky Define the following variables: – S be the proportion susceptible (i.e. not infected). Here it is given by cell D15 as: – I be the proportion infected. Here it is 1 - S or: – D is the duration of an individual in the infected status: Authors assume this equals: In a stable equilibrium, I/S = D * Incidence rate So the cell D16 is making this assumption to derive the incidence rate from the prevalence rate, I. – 0.256/0.744 = 9 * Infection rate

26. Based on these inputs the paper calculates the CE ratio Cost per infection averted is only $181

27. But …. New evidence on the cost of MC suggests it varies a great deal and in small scale facilities can be as high as $1,000 per circumcision And Ministry of Finance decision makers are more likely to use a discount rate as high as 10% or 12% in evaluating projects

28. MC: Cost per client 28 Cost per MC performedCoefficientp-valueAdj-R 2 Unadjusted-0.42330.0000.3495 cost per MC performed = (test kits+ staff ) )/(MC clients)

29. What if cost is $1000 and r = 10% ? Cost per infection averted goes up to $6,000

30. Check how the discounting was done

31. Now Michelle we lead a discussion of some other papers www.CGDev.org