Cost-Effectiveness Analysis of Results-Based Financing in

Zimbabwe and Zambia

Donald S Shepard, PhDWu Zeng, MD, PhD

Brandeis University, Waltham, MA

Nov 3, 2016, World Bank Headquarters, Washington, DC

Schema for cost-effectiveness analysis (CEA) for RBF programs

Cost Effects on coverage Effects on quality

Administrator’s costOther donors’ costProvider’s cost(User’s cost)

Household surveyFacility surveyHMIS dataQuality score card

 

Incremental cost Incremental lives saved, DALYs or QALYs

Incremental cost-effectiveness ratio (ICER)

Inputs

Intermediate results

Component outcomes

Cost-effectiveness outcomes

Costs Financial costs Government and donor

perspective Effectiveness—coverage

Impact evaluation with districts compared

Lives Saved Tool (LiST) software

Literature and country data Effectiveness--quality

Facility surveys Exit interviews Expert opinion (Delphi

panel)

ToolkitWeb: http://documents.worldbank.org/curated/en/2015/09/25069701/cost-effectiveness-analysis-results-based-financing-programs-toolkit

Evaluate cost-effectiveness by the ICER, the price of one unit of good health. The lower the better!

Incremental cost-effectiveness ratio (ICER)

𝐼𝐶𝐸𝑅=𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒𝑖𝑛𝑐𝑜𝑠𝑡𝑠

𝐷𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑖𝑛h h𝑒𝑎𝑙𝑡 𝑜𝑢𝑡𝑐𝑜𝑚𝑒𝑠Numerator: Added costs of RBF (difference in costs between

RBF and control districts)

Denominator: Added effectiveness or health outcomes (difference in health outcomes between RBF and controls), often expressed as quality-adjusted life years, QALYs

Both quantity (coverage) and quality contribute

CEA of RBF in Zimbabwe

Annual operating costs of RBF program

RBF subsidy payments, $7,045,211

Staff costs, $1,434,096

General administration*, $699,311

Capacity building (meetings, workshops, training)*, $426,644

HQ support costs*, $372,845

Transport costs, $299,412

Capital items for Cordaid*, $298,745

Supplies / equipment for facilities*, $128,209

Total, $10,704,473

$0.00 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50

$2.04

$0.41

$0.20

$0.12

$0.11

$0.09

$0.09

$0.04

$3.09

$2.04

$0.41

$0.10

$0.06

$0.05

$0.09

$0.04

$0.02

$2.82

Mature per capita costs

Current per capita costs

Per capita annual operating cost

The number after each category on the left is the current aggregate annual cost for the inter-

vention districts (population 3.46 million). For categories marked with asterisks, half of the

current costs were considered start-up expenses and would be reduced in a mature program. The labels on the right are per capita costs

Aggregate costs from Nat Pharm (US$)*

Group

Pre-period (Jan 2011-Mar 2012)

Post-period (Apr 2012-Jun 2014)

Spending /year (Pre)

Spending/ year (Post) Net difference

Popu-lation

Spending /capita

Control

6,771,163

33,466,940

5,416,930 14,874,196 2,229,897 $6.67

Intervention

6,062,025

29,478,515

4,849,620 13,101,562 3,461,010 $3.79

AdjustedIntervention 13,316,434 -1.63% 3,461,010 $3.85

Difference $0.06

*Source: Nat Pharm data base of drugs distributed representing 92,000 orders to 354 control and 359 intervention customers. Due to the substantial change in expenditure per year, we computed the difference in differences based on the ratios of aggregate expenditure. We calculated the pre-period ratio of intervention to control (0.8953). We computed the “adjusted intervention” by applying this ratio to the control spending/year (post), and computed the net difference by comparing actual and adjusted intervention values.

Financial net costs of current RBF per capita per year (USD)

Cost components Cost SubtotalIncremental RBF operational costs $3.09

Incremental costs at World Bank headquarters $0.10 Subtotal $3.19Net costs of consumables from Nat Pharm -$0.06Less Health Transition Fund payments to control districts (no administrative costs included)

-$0.81

Subtotal -$0.87Net cost $2.32

Quantity of care Institutional delivery: 13.4% Postpartum care: 13.3%

Quality of care

Impact of RBF in quantity and quality of services

Calculated lives and QALYs saved for selected services with RBF and projected from controls:

Quantitative results Annual number of lives saved is 772, i.e., (72+1,471)/2, Equivalent to 18,288 QALYs gained With population of 3.46 million in RBF districts, RBF generates 528 QALYs/100,000 population/year

Site visits suggested coaching strengthened RBF

Effectiveness (RBF vs. control): quality & quantity

Year RBF ControlLives saved

2012 9,705 9,705 0

2013 8,613 9,345 732

2014 8,136 8,875 739

Total 26,454 27,925 1471

Deaths in children under five and lives saved

Year RBF ControlLives

saved

2012 416 416 0

2013 370 414 44

2014 365 393 28Total 1,151 1,223 72

Maternal deaths and lives saved

Contributions of quality and quantity

Quantity (Coverage

improvement); 66%

Quality im-

provement; 34%

Relative shares of quality and quantity

0

100

200

300

400

500

600

350

178

528

Projected health impacts

QAL

Ys g

aine

d pe

r 100

,000

pop

ulat

ion

per

year

Incremental per capita costs: US $2.32QALY impacts (per 100,000 population per year)

Quantity (coverage) alone: 350 QALYsQuality and quantity (effective coverage): 528 QALYs

ICERs ($/QALY gained) Quantity (coverage) impacts alone: $2.32/0.00350 = $663 Combined coverage and quality impacts: $2.32/0.00528 = $439

Cost-effectiveness results: RBF vs. control

CEA of RBF in Zambia

Study design

Incentivized services (indicators) and unit prices

No IndicatorUnit Price

US$

1 Curative consultation 0·20

2 Institutional delivery by skilled birth attendant 6·40

3 Antenatal care (ANC) - prenatal and follow up visits 1·60

4 Postnatal care visit (PNC) 3·30

5 Full immunization of children under one year 2·30

6 Pregnant women receiving 3 doses of malaria intermittent preventive treatment (IPTp) 1·60

7 Family planning (FP) users of modern contraceptive methods 0·60

8 Pregnant women counselled and tested for HIV 1·80

9 HIV+ pregnant women given niverapine (NVP) and zidovudine (AZT) 2·00

Results

RBF vs INP RBF vs CON INP vs CON0.00

2.00

4.00

6.00

8.00

10.00

12.00

HQ costs

Program costs

MSL costsIn

crem

enta

l cos

t per

cap

ita ($

)

Program costs (RBF + input financing) and distribution of incentives

Curative consultations30.0%

Institutional deliveries 14.0%ANC

1.4%PNC6.6%

Full vaccination6.3%

Third dose of IPTp3.7%

Modern FP methods 28.5%

Pregnant women counselled and tested for HIV

9.3%

Pregnant women given NVP and AZT0.2%

Incentive payment

51.4%

Consultancy costs16.3%

Trainings6.9%

Meetings/ Workshops

2.2%

M&E0.9%

Operational costs7.6%

Equipment14.6%

Coverage and quality of key maternal and child health services at baseline and endline

ServicesBaseline   Endline   DIDs

RBF INP CON   RBF INP CON   RBF vs INP RBF vs CON

INP vs CON

Coverage of key maternal and child servicesIns Del 68·3% 56·4% 70·9%   80·8% 74·3% 71·2%   -5·4% 12·2%** 17·6%***

ANC 97·5% 96·2% 96·3%   98·9% 99·0% 99·1%   -1·4% -1·4% 0·0%

PNC 70·3% 56·0% 76·4%   82·4% 73·8% 80·7%   -5·7% 7·8%* 13·5%***

BCG 95·6% 97·8% 97·6%   100·0% 99·5% 95·6%   2·7% 6·4%* 3·7%*

DPT 97·1% 95·2% 95·8%   98·6% 97·6% 91·8%   -0·9% 5·5%* 6·4%*

HIB 82·5% 88·3% 81·8%   97·9% 88·7% 78·1%   15·0%*** 19·1%*** 4·1%

IPT 92·0% 92·4% 95·1%   98·0% 96·1% 98·1%   2·3% 3·0%** 0·7%

FP∆ 6·5% 9·9% 7·7%   34·0% 15·6% 15·7%   21·8%** 19·5%** -2·3%

Quality index of key maternal and child servicesIns Del 65·5% 66·8% 67·0%   73·5% 74·1% 71·9%   0·7% 3·1% 2·4%

ANC 66·9% 69·1% 68·6%   75·0% 77·2% 73·8%   0·0% 2·9% 2·8%

PNC 66·7% 68·4% 68·3%   74·1% 76·6% 73·4%   -0·8% 2·3% 3·0%

Vaccination 78·7% 80·7% 81·7%   81·2% 80·0% 80·4%   3·2% 3·8% 0·6%

FP 77·7% 78·6% 80·6%   81·6% 77·6% 74·8%   4·9% 9·7% 4·8%

QALYs gained from the RBF program in comparison with controls

 RBF vs INP RBF vs CON INP vs CON

Mid-point (lower bound-upper bound) Mid-point (lower bound-upper bound) Mid-point (lower bound-upper bound)

PopulationQALYs gained

(unadjusted for quality)

QALYs gained (adjusted for quality)

QALYs gained (unadjusted for

quality)

QALYs gained (adjusted for quality)

QALYs gained (unadjusted for

quality)

QALYs gained (adjusted for quality)

Pregnant women 237 (216-302) 302 (237-345) 475(425-539) 604(539-626) 237(176-302) 302(237-345)

Children under 5 5 088(3 733-6 015) 6 300(4 826-7 323) 11 816(10 480-13 100) 14 574(13 195-15 953) 6728(5 171-8 131) 8 274(6 704-9 843)

Total 5 325 (3 948-6 317) 6 602(5 064-7 688) 12 291(10 905-13 639) 15 178(13 734-16 579) 6 966(5 347-8 433) 8 576(6 942-10 188)

Incremental cost-effectiveness ratios

Comparison

Cost/life saved (US$) Cost/QALY gained (US$)

Mid-point (lower bound- upper bound)

Mid-point (lower bound-upper bound)

RBF vs INP (unadjusted) 39 621 (33 388 - 53 381) 1 674 (1 411 - 2 258)

RBF vs INP (quality adjusted) 31 952 (27 514 - 41 657) 1 350 (1 163 - 1 761)

RBF vs CON (unadjusted) 25 553 (23 024 - 28 767) 1 079 (972 - 1 216)

RBF vs CON (quality adjusted) 20 689 (18 945 - 22 865) 874 (800 - 966)

INP vs CON (unadjusted) 14 786 (12 211 - 19 235) 624 (515 - 813)

INP vs CON (quality adjusted) 12 280 (10 110 - 14 837) 507 (427 - 626)

Discussion

Reference: Zimbabwe’s 2012 GDP/capita was $980If ICER < GDP/capita, program highly cost-effective (WHO)ICER of current RBF

Improved coverage alone: $663 or 0.68x GDP/capita, highly cost-effective

Including quality gains: $439 or 0.45x GDP/capita, highly cost-effective

Mature RBF program would lower cost by 9.0% to $2.11 per capita

Discussion: Interpretation of RBF in Zimbabwe

Calculated average is 528 DALYs vs. mature program (704)Potential increase for mature program: 33%

Discussion: program maturity (Zimbabwe as an example)704

528

0

DALYs per100 population per

year

Phase I periodPhase I period Phase I period

Calculated averageEstimated phase in Mature program

Projected cost per capita $2.11Projected impact is 704 QALYs per 100,000 population per yearProjected ICER is $300

i.e. $2.11 / (704 / 100,000) or 0.31 x GDP/capita

Projected ICER of mature RBF program

Reference: GDP/capita $1,759 (2013)

ICER of RBF Compared to Input-financing: $1,350 or 0.77 GDP/capita, highly cost-effective Compared to pure control: $874 or 0.50 GDP/capita, highly cost-effective

ICER of input financing Compared to pure control: $507 or 0.29 GDP/capita, highly cost-effective

Comparison with Zambia RBF

Reproductive health vouchers in Uganda (African Strategies for Health, 2015)

$302 / QALY or 0.59 x GDP/capita ($510)Simulated maternal community-based health insurance in Uganda (African Strategies for Health, 2015)

$298 / QALY or 0.58 x GDP/capita ($510)RBF is among the very highly cost-effective interventions

Comparison with other maternal-child health programs

1.Use both penalties and rewardsHuman nature: people work hard to avoid penalties

2.Establish a threshold and pay only for activities above ite.g. antenatal care: pay only for incremental coverage over 90%

3.Pay for improvements over last year’s average as well as attainmente.g. Last year’s average 4; this quarter 5; improvement 1

4.Pay a fixed dollar amount for remoteness Current incentives as % of volume are too small

5.Combine RBF with more formative supervision and demand sideHelps providers learn to improve quantity and quality

Potential refinements to RBF

Ministry of Finance, Zimbabwe

Ministry of Health and Child Care, Zimbabwe

World Bank, Zimbabwe

Cordaid, Zimbabwe

Acknowledgments Ministry of Health, Zambia

World Bank, Zambia

World Bank Headquarters

Financial support World Bank Health Results

Innovation Trust Fund

Donald S Shepard, PhD

shepard@brandeis.edu

+1 781 736 3975

www.brandeis.edu/~shepard

ContactsWu Zeng, MD, PhD

wuzengcn@brandeis.edu

+1 781 736 3888

www.brandeis.edu