Health Economics module from Peoples-uni:

Introduction to Health Economics and learning outcomes

Introduction to Health Economics

There is never enough money to provide all the health care for everyone who needs it, but some
countries and health systems have used their limited resources well and nearly obtained Universal
Health Coverage (UHC). The study of their successes and failures is the key to international health
policy and health economics.

This brief survey of health economics is oriented toward achieving Universal Health Coverage
(UHC). This is now the single most important health policy objective in the developing world as well
as in middle and high income countries (notably the USA) where it is still a work in progress.
Health economics encompasses several of the social sciences besides economics We seek
evidence for appropriate public policies and best practices in diverse areas such as economic
development, demography, epidemiology/burden of disease, household finances and behaviour,
costs and effectiveness of treatments, financing methods, health system organization, and
comparative country studies.

Health economics is not only about money, but money is indeed important. This is mainly because,
even in rich countries, there is never money (and human resources) to provide all health services
to satisfy the needs and demands of all people. At the core of economics is the study of how
individuals, organisations, and governments deal with limited resources – how they can be
allocated fairly and used effectively to meet needs. (Equity and efficiency are related terms). This
module will help you understand why economics is especially relevant to public health and health
policy and will give you a deeper understanding of how public healthcare is organised and
financed, how healthcare consumers make choices, how alternatives for treatment and services
choices can be evaluated and prioritised, and how health systems can cope with emerging
problems.

Hardly a week passes without an article in the media about a new innovation in healthcare, and
often about how expensive it is. Importantly, we will see in this decade the roll-out of large-scale
health insurance schemes in many low and middle-income countries. Even the conventional
wisdom that disease prevention programs are very cost-effective has been challenged. At the end
of the day, politics often overrules science because decisions must be made about whose needs
should be met and who should pay for it. Barraged with information of varying quality, politicians
who are rarely trained in this field enact laws and regulations that affect a country’s health and
economic development. You will learn enough in this module to critically judge the value of
research findings and policy recommendations. Once you understand the relationships between

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Health Economics module from Peoples-uni:

money and health, you will be able to make informed decisions about how to improve your own
health system, from basic operational matters to higher-level program and policy matters.
No previous background in economics is required nor is any advanced maths involved, but there is
a fair amount of required reading. In UNIT 1 you can access a specially prepared slide
presentation to learn some of the basic economic that are relevant to what we will discuss in this
module.

The tutor will help you, but we will also challenge your understanding of concepts. It will be most
useful to other learners if you share your thoughts/discussion with them on the various activities.
Your tutor will also provide you with a practice quiz.

Our Topics are:

UNIT 1: Introduction to Health Economics: What health economics is about, some important
concepts and everyday examples that illustrate them, consumer choice, and how healthcare
“markets” differ from others. Universal Health Coverage and opportunities for achieving it.

UNIT 2: Health and Socio-Economic Development (The Backdrop for UHC):

Health is determined by many factors other than medical care. We discuss concepts and
definitions of poverty and equity and how they are related to health, household health
expenditures, "catastrophic costs", and the rationale behind UHC. You will also learn the
relationships between economic development and health.

UNIT 3: Healthcare Financing:

We learn about the main methods for financing national health systems and their pros and cons.
We discuss how the goal of universal coverage can be affected by the level and modes of health
financing, and how higher efficiency is important for good health system performance. We see how
subsidies and incentives can work in both the supply (providers) and the demand for healthcare.

UNIT 4: Introduction to Economic Evaluation:

Countries can't afford to provide all health services, so it is necessary to choose services that
provide the most value for money. Various approaches to and examples of economic evaluation
are presented. This results in evidence to be used for allocating limited resources effectively and
efficiently.

UNIT 5: Health systems and national health priorities:

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Health Economics module from Peoples-uni:

We examine how balancing priorities and making efficient use of resources are necessary for good
health system performance. How is your health system performing? How can good decisions be
made about national health priorities? What would you do if you were Minister of Health?

All of the topics are related in a recent document published by the WHO called Making Fair
Choices on the Path to Universal Health Coverage. It is fairly short and you will need to read
only one or two chapters for each Topic. There will be other required and optional readings that will
be provided to you.

Learning outcomes for each of the 5 units in the course.

The competences (learning outcomes) are general outcomes you will be expected to have gained
from each unit, and the assessment criteria are the details that you would be expected to be able
to provide in an assignment or assessment.

UNIT 1
Title: An introduction to health economics

Headline competence (learning outcome):

1. Demonstrate a systematic understanding of how objectives such as equity and efficiency apply
to health care in the setting in which you live or work.

Assessment criteria:
1a. Relate the following issues to the setting in which you work:

Relevance of health economics to health care,

The expansion of the health care sector,

Does economics apply to health and health care?

Is health care different?

How does health economics help you think about how health care resources should be
allocated?

What objectives should we set in determining priorities for allocation?

UNIT 2
Title: Health and Socio-Economic Development

Headline competence (learning outcome):

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Health Economics module from Peoples-uni:

2. Demonstrate a systematic understanding of the relationships between economic development

and health; Household and national income and other socio-economic determinants of health; the
concept of equity.

Assessment criteria:
2a Describe the ways that health affects economic development, and how development and socio-
economic factors affect health, and typical reasons why there are differences in health and access
to healthcare between income groups.
2b Discuss the evidence that spending on health (national and household-level) is related to health
outcomes, and why some poor countries have good health indicators and vice-versa.
2c Discuss different kinds of inequalities and how they can affect health status

UNIT 3
Title: Health care Financing

Headline competence (learning outcome):

3. Apply knowledge and understanding to discuss the role of various forms of health financing and
health insurance, with relevance for Developing Countries.

Assessment criteria:
3a. What are the basic principles and rationale for the main methods of health financing (taxation,
social insurance, OOP), and what challenges are associated with them?
3b. What is the track record of various financing methods AND provider payment mechanisms in
your country, and in other LMICs? What are the pros and cons of each method in terms of
efficiency and equity?
3c. How can the main obstacles to universal coverage be overcome? Describe other recent reform
attempts (pay-for-performance, health equity funds, community-based health insurance), and the
changing roles of donors.

UNIT 4
Title: Introduction to Economic Evaluation

Headline competence (learning outcome):

4. Demonstrate a critical awareness of the use and methodological aspects of: Cost Effective
Analysis, Cost Utility Analysis and Cost Benefit Analysis

Assessment criteria:
4a. Describe the way that costs, effectiveness and utility are measured

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4b. Conduct a critical appraisal of an economic evaluation article, reflecting on the application of
the results to data that are available in your country's setting.

UNIT 5
Title: Health system efficiency and national health priorities

Headline competence (learning outcome):

5. Critically assess the factors contributing to a well performing health system and to assess the
performance of the health system in your own country

Assessment criteria:

5a. Define the nature of a health system and how it relates to other sectors

5b. Bring together the competences of previous modules to recognize the influence of GDP,
financing, income distribution and efficient allocation of resources in the overall health of the
community

5c. Identify indicators of health and targets such as the Millenium Development Goals, and to
consider the constraints in reaching these goals and targets

5d. Understand measures of a well performing health system, such as efficiency and equity, and to
assess the quality of these measures in your own country

Formal Assessment for module

The module will be assessed by a written assignment which will be given to you towards the end of
the module.

Please note:
Where in presentations and material it refers to Discussion Forum please note that the
material is written for distance learning only. You will have face to face tutorials with your
tutor. However you may wish to discuss the material with your fellow learners.

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UNIT 1: Introduction to Health Economics

UNIT 1: Introduction to Health Economics:

What health economics is about, some important concepts and everyday examples that illustrate
them, consumer choice, and how healthcare “markets” differ from others. Universal Health
Coverage and opportunities for achieving it.

Headline competence (learning outcome):

1. Demonstrate a systematic understanding of how objectives such as equity and efficiency apply
to health care in the setting in which you live or work.

Assessment criteria:
1a. Relate the following issues to the setting in which you work:

Relevance of health economics to health care,

The expansion of the health care sector,

Does economics apply to health and health care?

Is health care different?

How does health economics help you think about how health care resources should be
allocated?

What objectives should we set in determining priorities for allocation?

Resources UNIT 1 Health Economics: An Introduction to Health Economics

There are two presentations and two articles relating to this unit which you will find in the resource
file for Unit 1.

- Topic 1: What is Health Economics? presentation

- Introduction To Microeconomics For Basic Health Economics Presentation

- World Health Organization 2014, "Making fair choices on the path to universal health
coverage”
- Lancet Global Health 2035 article (Global health 2035: a world converging within a generation.
volume 328, 2013)

Welcome to UNIT 1 of the Health Economics module.

Economics is about how individuals, organisations, and governments deal with limited resources –
how they can be allocated most fairly and used effectively to meet needs. We will find out how

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economics is especially relevant to public health and health policy. Knowing about the basic
economic factors related to health and healthcare will provide you with a deeper understanding of
how healthcare is organised (and why), how consumers make choices, how health policies are
developed, and how well health systems serve different groups, deliver essential services, and
cope with emerging problems.

Health economics can play an important role in deciding how we, as a society, best use our
available health sector resources. Economics provides a way of thinking that guides us to allocate
resources to maximise the benefit achieved for society. Given this admirable goal, why then do
economists so often disagree amongst themselves (as well as with non-economists) when it
comes to formulating policy?

The primary Resource for this module is a recent report by the World Health Organization, "Making
fair choices on the path to universal health coverage." We will refer to this as "WHO 2014"

Please read the Executive Summary and Chapter 1 of WHO 2014 in preparation for the UNIT 1
discussion. In only 8 or 9 pages, the goals of UHC and the necessary components are clearly
explained. You will read the rest of the report over the remaining Topics. Since the required readings
have been kept brief, students are expected to have read them before attending the tutorial.

A secondary resource for the UNIT is the Executive Summary of "the Lancet article" (Global health
2035: a world converging within a generation. volume 328, 2013). It is only 1-1/2 pages long but
sets out the major issues in global health economics and policy. You can find this article in the
resource file for UNIT 1.

For those of you with little or no background in economics the aim of this module is to challenge
the way in which you may think about the problem of allocating scarce health care resources
across competing needs. For those of you who want to know more about the theoretical
underpinnings of health economics, please see the slide set "Introduction to Microeconomics" that
was especially prepared for this module. You can find it in the resource file for UNIT 1.

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UNIT 2: Health and Socio-Economic Development (The Backdrop for

Universal Health Care UHC):

Introduction and Study Guide

UNIT 2: Health and Socio-Economic Development (The Backdrop for Universal Health Care UHC):

Health is determined by many factors other than medical care. We discuss concepts and
definitions of poverty and equity and how they are related to health, household health
expenditures, "catastrophic costs", and the rationale behind UHC. You will also learn the
relationships between economic development and health.

Headline competence (learning outcome):

2. Demonstrate a systematic understanding of the relationships between economic development

and health; Household and national income and other socio-economic determinants of health; the
concept of equity.

Assessment criteria:
2a Describe the ways that health affects economic development, and how development and socio-
economic factors affect health, and typical reasons why there are differences in health and access
to healthcare between income groups.
2b Discuss the evidence that spending on health (national and household-level) is related to health
outcomes, and why some poor countries have good health indicators and vice-versa.
2c Discuss different kinds of inequalities and how they can affect health status

UNIT 2: Study Guide for the Resource Materials

As we have seen in UNIT 1, health economics builds on microeconomics and epidemiology to help
answer and provide evidence about questions like, what is health and how do people value it? Is
health a "good investment" for governments? What influences health, other than medical care?
What influences the demand for healthcare and healthcare-seeking behaviour? What are the costs
of health care, what can people and governments afford to pay?

We know now that good health is critical to the overall well-being of families and communities.
Population health along with education, is “human capital” that plays a key role in national
development. The linkages between health and development operate in both directions.

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In UNIT 2, we begin to focus on the quest for Universal Health Care (or Coverage) and Equity.

• Good health is critical to the overall well-being of families and communities. Population
health along with education, is “human capital” that plays a key role in national
development. The linkages between health and development operate in both directions.

• Population and individual health are determined by many factors other than medical care
(“determinants of health”). There is ample evidence that social factors, including education,
employment status, income level, gender and ethnicity have a marked influence on how
healthy a person is. In all countries – whether low-, middle- or high-income – there are wide
disparities in the health status of different social groups. The lower an individual’s socio-
economic position, the higher their risk of poor health.

• Poorer countries have worse average health statistics that better-off countries but countries
that focus resources on universal access to PHC and safe water and sanitation, and on
education, especially female, have risen above their expected level. Poor health and the
problems poor people have accessing healthcare often results in deeper and long-lasting
poverty.

• Levels of impoverishment is known to be related to low government spending on

healthcare. A major objective of “Health Reform” around the world is to raise the coverage
of affordable health services for everyone, giving high priority to reaching the poor.
Reducing health inequities and providing good health services are possible even in low
income countries. Providing high coverage involves efficiency and prioritization, and good
health systems, as we shall see in the remaining three topics.

• We will work together to illustrate key concepts by using data from learner’s own
countries. You will need to identify the main sources of global health and
development data, found on websites of WHO, World Bank, and UNICEF. Hint - this
data sometimes turns up in a final assignment question.

UNIT 2 Please read or watch all the following resources

Resources UNIT 2 Health and Socio-Economic Development (The Backdrop for Universal Health
Care UHC):
There are five files plus two introduced in unit 1 relating to this unit which you will find in the resource
folder for Unit 2.

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Health Economics module from Peoples-uni:

- Socioeconomic Determinants of Health: The Backdrop for Universal Health

Coverage presentation

- The Role of Health in Economic Development

- Global health 2035: a world converging within a generation, (Lancet article from Unit 1)

- Report of The Commission on Macroeconomics and Health (Macroeconomics and Health:

#40;CMH#41

- 17-minute video break with Professor Richard Wilkinson.

http://www.youtube.com/watch?v=cZ7LzE3u7Bw

- Tackling the wider social determinants of health and health inequalities: Evidence from
systematic reviews.

Resource 2.1) This is a very short but thorough summary of the relationships between health and
development from New Zealand. A pdf copy entitled The Role of Health in Economic
Development is posted in UNIT 2 Resources.

Resource 2.2) http://www.who.int/features/factfiles/health_inequities/facts/en/index3.html A brief

but interesting set of photos from WHO: 10 facts on health inequities and their causes. This fact
file looks at what health inequities are, provides examples and shows their cost to society.

Resource 3.3) Slide Set: Socioeconomic Determinants of Health: The Backdrop for Universal
Health Coverage (The file is named "UNIT2 main presentation")

Please download this and look at all the slides (PDF). Some slides include links to online
information. This set of slides covers the concepts of economic development, and individual and
population health from the perspective of a health economist. We introduce the concept of income
inequality and health equity and why attention needs to be focused on the poor. Additional aspects
of health economics relate to the ways that good health care is possible at low cost. These will be
amplified in Topic 3 on Health Financing and Topic 4 on Economic Evaluation.

The principles of economics apply everywhere, but the actual issues facing the industrialized
countries and the developing countries are somewhat different. While most illness in higher-income
countries is chronic and expensive to cure (but not to prevent!), most illness in the developing
world is preventable and curable with well-known and inexpensive interventions. Social and
environmental factors are intermediate factors between wealth and health.

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Total expenditures on health (public plus private expenditures) vary widely among all countries, but
are generally within a range of 3% to 10% of a country’s GDP. There are several good sources of
reliable data about health and related socioeconomic factors on the internet. A basic fact is that the
poorest countries have most of the world’s illness, but spend just a small fraction of what the
wealthiest countries do on health. International statistics show a relationship between wealth and
health. Life expectancy and child mortality rate are two often-used indicators. The Millenium
Development Goals derive in large part from an analysis that prioritises the needs of the poor, and
demonstrates how it is to the benefit of everyone to do this, not only the wealthier members of the
society, but also the wealthier countries. Some countries have made important progress in this
direction, but in most there will need to be large increases in total spending on health and in
focusing inputs on the poor. We will discuss in UNIT 3 ways of financing healthcare that can
accomplish this through universal coverage.

Resource 3.4: If you haven't already downloaded the key paper from Lancet for this module
Global health 2035: a world converging within a generation, please do so.
http://globalhealth2035.org/sites/default/files/report/global-health-2035.pdf We will refer you
to different sections in other Units, and you will find it a valuable reference for assignments. For
this Unit, please read Section 1 (pp 1901-1912).

UNIT 2 Please look at the remaining resources and be prepared to participate in

discussions.

Optional Resource 3.1: Take a 17-minute video break with Professor Richard Wilkinson.
http://www.youtube.com/watch?v=cZ7LzE3u7Bw Note: you can skip this if you have
time/connectivity difficulties, but it is very interesting!

Resource 3.6: Report of The Commission on Macroeconomics and Health (CMH) (abridged
version for P-U) Note: this resource was also posted in Resources.

The Commission on Macroeconomics and Health was launched by WHO in 2000, to examine the
links between health and poverty and to demonstrate that health investment can accelerate
economic growth. The Commission focused its work on the world’s poorest people in the poorest
countries. The summary chapter (which itself has been much shortened for this course) draws
together the detailed findings of the six main studies. It is a thorough examination of the linkages
between health and economic development. It includes estimates data on current disease burden,
discusses cost-effective interventions, and the expected reductions in mortality and morbidity if
those interventions are used effectively in developing countries.

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It estimates the costs of implementation, and uses those costs to calculate the “funding gap”
that donor countries will need to fill. It is in the end primarily a plea to developed countries to
increase development aid to developing countries, demonstrating that it is not only the “right
thing” to do, but that it is also in their own long term interest to do so (this particular emphasis is
absent in the shortened version of the paper).The value of this document for us is how it illustrates
quantitative approaches to efficient, effective, and affordable health and poverty-reduction policies.

Pages 1-6: Improving health (as per the Millenium Development Goals) is an end in itself, but also
a means of achieving other development and poverty-reduction goals. Look at the great
differences in health statistics shown in Table 1. The relationship between high infant and child
mortality and low LEB should be obvious to you. But as national income increases from low levels,
there is a big jump between Low Income and Low-Medium income countries.

Pages 7-9: There is much evidence of the relationships between population health and economic
development, and a model that shows how development is a multisectoral process. Household
effects of disease are discussed here – the "poverty trap" of catastrophic healthcare costs.

Pages 10-16 The overall burden of disease is measured using disability-adjusted life years (DALY),
a time-based measure that combines years of life lost due to premature mortality and years of life
lost due to time lived in states of less than full health. You should understand the meaning of
DALYs as a measure of because it is necessary for economic evaluation of interventions (Unit 4).

“One goal of economic analysis is to convert these disease-induced losses into dollar terms, in
order to assess the economic benefits that would accrue to reducing the disease burden.” This is
a central theme of health economics.

There are both financial and non-financial constraints such as health system weaknesses that
countries face to improve healthcare delivery. Note the claim that great improvements in the health
of the poorest people can be achieved by targeting (prioritizing) a relatively few conditions, and that
effective interventions already exist for them. The paragraph goes on to say that it is necessary to
both strengthen health systems to deliver these interventions, and to improve the access of the
poor to health systems.

You should understand how the total costs of the priority interventions were estimated. The main
factors are: unit costs of treatment, disease incidence, and coverage goals. (Accurate costing is an
important aspect of health economics but is not covered in this Module.) Become familiar with the
well-known cost estimate of these basic interventions of US$34-$38 per capita. Methods of
selecting interventions, estimating their effectiveness, and their costs will be discussed in the later
Topic on Economic Evaluation.

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The CMH estimated that the minimum cost of scaling up a set of essential interventions is on
average US$ 40 (current US$) per person/year, including those needed to fight the AIDS
pandemic. In least-developed countries, most spending for health is from out-of-pocket
expenditures (1997). The CMH was above all intended to encourage increased external aid from
the rich world by showing that big improvements were possible at relatively low cost, but the major
objective of current health reform policies is to reduce out-of-pocket spending.

Optional Resource 3.2 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2921286 Tackling the wider

social determinants of health and health inequalities: Evidence from systematic reviews.
{Document included in Unit 2 Resources}

What are "systematic reviews"? This article is an example of the “gold standard” of systematic
reviews for evaluating evidence. It informs us as to the strength of evidence on determinants of
health (in developed countries only), and finds that housing and work environment interventions
are most strongly supported by evidence. There are apparently too few studies in developing
countries to be included in a systematic review, but education, and especially female literacy
appears to have the greatest influence on health apart from healthcare.

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UNIT 3: Healthcare Financing:

UNIT 3: Healthcare Financing:

We learn about the main methods for financing national health systems and their pros and cons.
We discuss how the goal of universal coverage can be affected by the level and modes of health
financing, and how higher efficiency is important for good health system performance. We see how
subsidies and incentives can work in both the supply (providers) and the demand for healthcare.

Headline competence (learning outcome):

3. Apply knowledge and understanding to discuss the role of various forms of health financing and
health insurance, with relevance for Developing Countries.

Assessment criteria:
3a. What are the basic principles and rationale for the main methods of health financing (taxation,
social insurance, OOP), and what challenges are associated with them?
3b. What is the track record of various financing methods AND provider payment mechanisms in
your country, and in other LMICs? What are the pros and cons of each method in terms of
efficiency and equity?
3c. How can the main obstacles to universal coverage be overcome? Describe other recent reform
attempts (pay-for-performance, health equity funds, community-based health insurance), and the
changing roles of donors.

Introduction and Study Guide

Welcome to UNIT 3 of Introduction to Health Economics. Universal health coverage (UHC) should
now be a familiar concept. The only compulsory reading is the slide set that we have prepared
especially for this UNIT (file entitled Topic 3 HeathE Main resource, title slide TOPIC 3:
HEALTH FINANCING FOR ACHIEVING UNIVERSAL HEALTH COVERAGE)

However, you may choose optional readings based on your interests and our learning objectives
and expectations (optional reading list is given below).

In recent years, there has been much attention given to UHC globally. The World Health
Organization (WHO) recommends that member states should commit to developing their health
financing systems to ensure that “all people can use health services, while being protected against
financial hardship associated with paying for them.” In fact, only a few countries have implemented
some significant level of UHC. You will learn from the slide set that UHC is indeed a

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multidimensional construct. No single policy instrument can achieve multiple goals simultaneously.

In this UNIT, you will have to think about how healthcare is financed, and the pros and cons of
different healthcare financing methods and relevance of each methods with reference to the goals
in general. The current economic climate and the pressure of adopting costly and increasingly
advanced technologies have tightened the supply side constraints on implementing UHC. The
demand side constraints (financial barriers, as you learned in UNIT 2) also occupy a central role in
healthcare policy. Health insurance is gaining popularity in many countries, because it is assumed
to be an efficient and equitable healthcare financing strategy (We will review this assumption in
UNIT 5).

The low and middle-income countries (LMICs) seem to be on different paths towards UHC. A few
LMICs have already developed national health insurance systems, and others still struggle to
provide universal access to ‘basic’ healthcare. In these countries, most care is financed by out-of-
pocket spending (OOP). Various countries are experimenting with alternative healthcare financing
methods including health insurance with properties of cost containment, cost sharing and risk
pooling.

You are expected to know:

(1) The main sources and methods of health finance and the respective pros and cons,
(2) The goal of universal coverage can be affected by the level and modes of health financing, and
(3) How subsidies and incentives work in both the supply and demand sides of healthcare, and be
able to critically discuss the applications in the context of your country.

Optional reading list:

Optional Resource 3.1

Jamison, Dean T, Lawrence H Summers, George Alleyne, Kenneth J Arrow, Seth Berkley, Agnes
Binagwaho, Flavia Bustreo, et al. 'Global Health 2035: A World Converging within a
Generation'. The Lancet 382, no. 9908 (December 2013): 1898-1955. doi:10.1016/S0140-
6736(13)62105-4. (This article was mentioned in Units 1 & 2)
⚫ While this is “optional”, the entire module is now framed around this paper, and
section 6 is directly related to this UNIT.

Optional Resource 3.2

Sachs, Jeffrey D. 'Achieving Universal Health Coverage in Low-Income Settings'. The Lancet
380, no. 9845 (2012): 944-47.
⚫ This is one of the building block papers of our slide set.

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Optional Resource 3.3

Lagomarsino, Gina, Alice Garabrant, Atikah Adyas, Richard Muga, and Nathaniel Otoo. 'Moving
towards Universal Health Coverage: Health Insurance Reforms in Nine Developing
Countries in Africa and Asia'. The Lancet 380, no. 9845 (September 2012): 933-43.
doi:10.1016/S0140-6736(12)61147-7.
⚫ This paper presents evidence of implementing insurance and UHC in nine
under-developed countries.

Optional Resource 3.4

Moreno-Serra, Rodrigo, and Peter C. Smith. 'Does Progress towards Universal Health
Coverage Improve Population Health?' The Lancet 380, no. 9845 (2012): 917-23.
doi:10.1016/S0140-6736(12)61039-3.
⚫ This paper discusses UHC and some empirical evidence.

Optional Resource 3.5

Kutzin, Joseph. 'Health Financing for Universal Coverage and Health System Performance:
Concepts and Implications for Policy'. Bulletin of the World Health Organization 91, no. 8 (1
August 2013): 602-11. doi:10.2471/BLT.12.113985.
⚫ This is a long paper discussing health finance and UHC explicitly and critically.

Optional Resource 3.6

Schieber, George J., Pablo Gottret, Lisa K. Fleisher, and Adam A. Leive. 'Financing Global
Health: Mission Unaccomplished'. Health Affairs 26, no. 4 (2007): 921-934.
doi:10.1377/hlthaff.26.4.921.
⚫ We do not discuss external assistance (donor aid) much, but it is important
because donors influence the health policy agenda. The crucial lesson is that
external assistance may not help in resolving the financial burden.

Optional Resource 3.7

Sharma, Nithya, and Sayaka Koseki. The Path to Universal Coverage in Africa: Focus on
Community-Based Health Insurance, 1 September 2012.
http://www.healthsystems2020.org/content/resource/detail/104166/.
⚫ Experience about applications of community-based health insurance can be
found from this paper.

Optional Resource 3.8

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(file entitled WHR health system financing) (a) World Health Organization (WHO), The World
Health Report 2010 - Health Systems Financing: The Path to Universal Coverage. 2010.
http://www.who.int/whr/2010/en/. (b)
http://www.youtube.com/watch?v=VQ3sHfYzcv8&feature=youtu.be.
⚫ You may want to know WHO's perspective of UHC. Reading the summary will
be adequate if you are interested in the report. If you have good access to the
Internet, you may wish to watch the YouTube clip.

You can use these questions as the basis for your contributions to the Discussion:
i. What are the basic principles and rationale for the main methods of health financing
(taxation, social insurance, OOP and external assistance), and what challenges are
associated with them?

ii. What is the track record of various financing methods including provider payment
mechanisms in your country? Can you compare the situations with those in other LMICs?
What are the pros and cons of each method in terms of equity/fairness (the rationale for
UHC) and efficiency?

iii. How may your country overcome the main obstacles to universal coverage? What are the
features of recent health finance reform attempts in your country; e.g., pay-for-performance,
health equity funds, community-based health insurance, etc.? Do you think the
arrangements fit the situations of your country? And why? What will be the expected
outcome(s)? What would you propose to improve the situations? If no reform has been
undertaken, please discuss the situations of a country of the same income group.

We are looking forward to discussing the slide set and the optional resources with you. Critique of
the resource materials is particularly welcome, and will help the future learners.

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UNIT 4: Introduction to Economic Evaluation:

UNIT 4: Introduction to Economic Evaluation:

Countries can't afford to provide all health services, so it is necessary to choose services that
provide the most value for money. Various approaches to and examples of economic evaluation
are presented. This results in evidence to be used for allocating limited resources effectively and
efficiently.

Headline competence (learning outcome):

4. Demonstrate a critical awareness of the use and methodological aspects of: Cost Effective
Analysis, Cost Utility Analysis and Cost Benefit Analysis

Assessment criteria:
4a. Describe the way that costs, effectiveness and utility are measured
4b. Conduct a critical appraisal of an economic evaluation article, reflecting on the application of
the results to data that are available in your country's setting.

Resources UNIT 4: Introduction to economic evaluation.

Resource 4.1
Please start with the presentation ‘Introduction to Economic Evaluation’ which covers key
issues and sets the scene for the whole UNIT of economic evaluation.

Resources 4.2
Another lecture from Johns Hopkins School of Public Health, (entitled: John Hopkins Lecture1 in
Resources) also titled ‘Introduction to Economic Evaluation’ provides just an introduction to the
idea and some of the evaluation methods used

An old paper from Anne Mills in the World Health Statistics Quarterly, 1985, states: "Economic
evaluation of health programs in developing countries differs from that in developed countries
because evaluation techniques draw on the cost benefit methodologies developed specifically to
suit the economies and developmental policies of developing countries, because the productivity
consequences of improved health remain an important question, because there is a close
association between the application of economic evaluation techniques and the involvement of aid
agencies, and because a wider range of potential interventions to improve health must be
evaluated. Aspects of the methodology of economic evaluation of particular relevance in
developing countries include: 1) establishing effectiveness, generally by controlled trials, most

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Health Economics module from Peoples-uni:

commonly in the case of interventions directed at specific diseases or conditions; 2) identifying

costs and consequences, particularly with respect to changes in physical, social, or emotional
functioning, changes in resource use, and changes in the quality of life of the patient and his
family; 3) measuring costs and consequences, especially the identification of the resources used
by a program when they are shared with other activities and of a suitable measure of the effect of a
program on health; 4) the valuation of costs and consequences, which may be difficult to determine
because the local prices of goods and services often provide an unreliable guide to their costs but
which may be estimated by shadow or accounting prices; and 5) the affordability and recurrent cost
consequences for the government. As the techniques described above are those of microeconomic
analysis, they are most useful when programs are relatively self-contained and unlikely to have
widespread economic consequences." Despite the age of this paper, the principles are still
relevant!

Economic evaluation checklist. This is a guideline for people wanting to report economic
evaluations, but it gives a very useful summary of the issues involved in economic evaluations. The
paper is rather long and detailed, but here is a summary of the main types of economic evaluation
from it.

Study type Measurement of benefits Question posed

Cost minimisation Benefits found to be Which is the most efficient way of

analysis equivalent achieving a given goal or objective?

Cost effectiveness Natural units (eg life years What is the most efficient way of
analysis gained) Healthy years (eg spending a given budget
(or Cost-utility quality adjusted life years,
analysis) healthy years equivalents)

Cost-benefit Monetary terms Should a given goal (or objective)

analysis be pursued to a greater or lesser extent?

Resources 4.3
Introduction to economic evaluation - more detail (Taken from the fourth in a series of six
modules)
Commentary: This is a summary of a longer document produced for INCLEN, which goes into
more detail about the methods for economic evaluation (including cost effectiveness analysis and
cost utility analysis)

Resources 4.4
Outcome measures in economic evaluation (summary taken from the third in a series of six

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modules).
Commentary: This is a summary of a longer document produced for INCLEN, which goes into
some detail about the outcome measures required for use in economic evaluation

Resources 4.5
Example of a cost-effectiveness evaluation (file entitled Bachman s Cost Effectiveness example
included in the Unit 4 Resources)
Commentary: The summary of this paper is as follows: "Children aged under five years with severe
acute malnutrition (SAM) in Africa and Asia have high mortality rates without effective treatment.
Primary care-based treatment of SAM can have good outcomes but its cost effectiveness is largely
unknown”. “This study estimated the cost effectiveness of community-based therapeutic care
(CTC) for children with severe acute malnutrition in government primary health care centres in
Lusaka, Zambia, compared to no care”. Methods: “A decision tree model compared the costs (in
year 2008 international dollars) and outcomes of CTC to a hypothetical 'do-nothing' alternative.
The primary outcomes were mortality within one year, and disability adjusted life years (DALYs)
after surviving one year”. The author concluded that: “CTC is relatively cost effective compared to
other priority health care interventions in developing countries, for a wide range of assumptions”.

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Health Economics module from Peoples-uni:

UNIT 5: Health systems and national health priorities

Introduction and Study Guide

UNIT 5: Health systems and national health priorities:

We examine how balancing priorities and making efficient use of resources are necessary for good
health system performance. How is your health system performing? How can good decisions be
made about national health priorities? What would you do if you were Minister of Health?

Headline competence (learning outcome):

5. Critically assess the factors contributing to a well performing health system and to assess the
performance of the health system in your own country

Assessment criteria:

5a. Define the nature of a health system and how it relates to other sectors

5b. Bring together the competences of previous modules to recognize the influence of GDP,
financing, income distribution and efficient allocation of resources in the overall health of the
community

5c. Identify indicators of health and targets such as the Millenium Development Goals, and to
consider the constraints in reaching these goals and targets

5d. Understand measures of a well performing health system, such as efficiency and equity, and to
assess the quality of these measures in your own country

UNIT 5 Introduction

Welcome to the final UNIT within the Health Economics module.

Previous topics have identified the complex links between the wealth of a country and the health of
its population. While increased wealth generally correlates with increased health, there are
nevertheless many resource poor nations which have succeeded in delivering quality health care
to their communities through a) maintaining equity in health financing and income distribution and
b) maximizing efficiency, such as in the prioritization of basic services (for example immunization),
and minimization of costs (for example through using telemedicine). Hence the delicate and difficult
balance of how best to prioritise resources can be extremely important, not only for the country’s
health and welfare but for its economy as a whole and for the global health system generally.

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Resource 5.1
The presentation for UNIT 5 is entitled Topic 5 Health Systems quality and global health’ and
has been prepared to introduce the main issues. Please read it first. It introduces the importance of
measuring the quality of a health system and takes you through to the discussion UNIT on the last
slide.

The following was mentioned in the presentation and available in the Resources folder
EVERYBODY’S BUSINESS Strengthening Health Systems To Improve Health Outcomes WHO’s
Framework For Action

Resource 5.2
The core reading has been used in previous units and all chapters feed into this topic, but the most
important one for our discussion will be Chapter 6 which introduces strategies for achieving
Universal Health Coverage (UHC) in order to overcome barriers to achieving basic health care for
all people in all countries. http://www.who.int/choice/documents/making_fair_choices/en/
(WHO Making fair choices on the path to universal health coverage document in previous unit
resource file)

Resource 5.3
A useful reading is also Chapter 2 (How well do Health Systems Perform) of The World Health
Report 2000. (included in the resource folder) This document was an important milestone in the
comparison of health systems around the world, demonstrating relative achievements in health
outcomes compared with resource inputs, in order to promote better health through better
efficiency, better accessibility and better responsiveness. Chapter one provides an overview of
health systems – what they are, how they work and what they set out to achieve.

Chapter 2 is of particular relevance to this UNIT in that it describes the main components of health
system performance including health indicators, equity and responsiveness. It also addresses
variation in efficiency, which depends on the relative ability of the system to provide services,
finance health, generate health resources and effectively manage them.

Resource 5.4
The UHC commitment follows on from the The Millenium Project, which was an ambitious
undertaking beginning in 2000, to improve global development in 8 key areas by 2015. The MDG
project’s targets were achieved to a varying degree - you might like to access the interactive site
which provides comparisons across all included regions and countries to explore the attainment by
your own country. http://vizhub.healthdata.org/mdg/

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The ‘The Millennium Development Goals Report 2015’ is therefore a relevant resource which
reports on the successes to date and the challenges yet to be achieved. It is available in the
resource file or can be accessed at:
(http://www.un.org/millenniumgoals/2015_MDG_Report/pdf/MDG%202015%20rev%20%28July%2
01%29.pdf

This UNIT aims to assist you to critique your own health system in terms of its performance and to
identify areas where resource allocation could be improved to attain better health outcomes
overall, in particular within the framework of UHC.

Further optional reading:

Optional Resource 5.1

The following reading focusses on targets set for dramatic health improvement by 2035 and
provides a comprehensive insight into the potential returns on investment in health.
Jamison et al. Global health 2035: a world converging within a generation The Lancet 2013
382:1898-1947
http://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/Global%20health%202035%2
0-%20a%20world%20converging%20within%20a%20generation

Optional Resource 5.2

Toward a Consensus on Guiding Principles for Health Systems Strengthening
Robert C. Swanson, Annette Bongiovanni, Elizabeth Bradley, Varnee Murugan, Jesper Sundewall,
Arvind Betigeri, Frank Nyonator, Adriano Cattaneo, Brandi Harless, Andrey Ostrovsky, Ronald
Labonte

Optional Resource 5.3

The New Partnership For Africa’s Development (NEPAD) Health Strategy

Optional Resource 5.3

Health Policy Development in Sub-Saharan Africa: National and International Perspectives
By Doyin Oluwole,

Optional Resource 5.4

THIRD SESSION OF THE AFRICAN UNION CONFERENCE OF MINISTERS OF HEALTH
JOHANNESBURG, SOUTH AFRICA 9– 13 APRIL 2007 Theme: “Strengthening of Health
Systems for Equity and Development in Africa”

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