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The Economics of Global Health and Microbial Threats

To open the workshop and provide context for the subsequent presentations and discussions, Lawrence H. Summers, president emeritus and Charles W. Eliot University Professor of Harvard University, offered his perspective on the value of understanding the economics of global health and microbial threats. After Summers’s address, Peter Sands, executive director of The Global Fund to Fight AIDS, Tuberculosis and Malaria, reflected on the keynote presentation and spoke about the desired outcomes of the workshop.

PERSPECTIVES ON PRIORITIES FOR USING ECONOMICS FOR GLOBAL HEALTH

In his keynote address, Lawrence H. Summers, president emeritus and Charles W. Eliot University Professor of Harvard University, began by asserting that economic analysis has the potential to make significant contributions to the field of global health. He said,

With an issue of such great magnitude, Summers stated that there are two major perspectives surrounding the role of economics in global health.

One perspective affirms that to apply economic analysis to health

trivializes a profound moral issue, he said. This viewpoint, he explained, states that it is wrong to think in terms of money, prices, and trade-offs, such as trading off one disease against another or trading off availability of one kind of treatment against another kind of treatment. Rather, it asserts that the issue is better framed in absolute moral commitments. According to Summers, there is a role for this perspective, and its advocates have been successful in raising the issue of health on the global agenda over recent decades. The Alma Ata Declaration is an example of such progress, which defined health as a human right and called for “health for all” to be achieved through a primary health care approach (WHO, 1978). The Millennium Development Goals (MDGs),¹ which guided the global development agenda from 2000 to 2015, as well as the more recent Sustainable Development Goals (SDGs),² which succeeded the MDGs in 2016, have similarly elevated health to the status of a global priority.

The second perspective, Summers described, considers the use of economic analysis to be a moral imperative given the scale and importance of global health challenges. Actions and policies are constrained by limited resources, he said, and this means that difficult choices must be made related to investment priorities. Summers added that proponents of economic analysis believe that the choices related to resource allocation and strategic planning are best made on the basis of rational analysis and data as opposed to reflex or emotional instinct. Summers supported this second viewpoint, believing that economic analysis can make important contributions to global health decision making.

From this point of view, Summers outlined four priority areas of economic analysis for global health that he believed would benefit for further discussion during the workshop (see Box 2-1). Firstly, he said that economic analysis should demonstrate the effect of global diseases on economic performance, as well as the high rate of return on well-designed interventions devised to counter them. The Global Health 2035 Lancet Commission Report established the case that the economic value of improvements in health was substantial relative to the overall economic growth of countries. For instance, reductions in mortality from improved health services were estimated to account for 11 percent of economic growth in low- and middle-income countries over recent years, and certain health investments demonstrated attractive economic benefits exceeding costs by a factor of

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¹ The MDGs included five goals specifically focused on health: goal 1 on poverty and hunger; goal 4 on child mortality; goal 5 on maternal health; goal 6 on HIV/AIDS, malaria, and other diseases; and goal 7 on environmental sustainability, including safe water and sanitation (WHO, 2015).

² SDG 3, on good health and well-being, lists 13 targets pertaining to maternal and child health, infectious diseases, noncommunicable diseases, and universal health coverage (UNDP, 2016).

about 9 to 20 between 2015 and 2035 (Jamison et al., 2013). Summers noted that there is more work needed on this priority area, such as further economic analyses performed on a country-by-country basis and for other health-sector interventions.

Regarding the second priority area, Summers said economic analysis can guide decisions on resource allocation within the health sector. Summers highlighted three questions that could be answered with economic decision making:

1. Which diseases are associated with the most cost-effective treatments?
2. Where are research funds best spent to reduce pain and suffering or extend life?
3. What are the benefits of different types of investments?

Over recent years, the global health community has developed common metrics to evaluate the global burden of disease and the resulting suffering and loss of life. Despite these common metrics, he said every disease seems to have its own advocacy strategy to determine payoff for investment. He added there is currently no method to make strategic choices across resource allocation options. As an example, Summers described the challenge health systems face when deciding between increased funding directed toward care provision versus clinical research.

Regarding the third priority area, Summers stated that economic analysis can be used to evaluate and strengthen the effect of international development assistance for health. In particular, he said it could raise the issue of the fungibility of international aid. Fungibility is a term that refers to a product or resource’s interchangeability. As an illustrative example, Summers explained that donor funds for health provided to a country do not necessarily translate into an equivalent amount spent in the health sector. The country’s government can decide to reduce its funding to the health sector by the same amount and reallocate funds for a different use, he said. According to Summers, there is growing evidence from the evaluation of donor funds for social sectors like health and education that assistance can lead to government budget reallocation rather than incremental spending. Fungibility can occur both between sectors, as in health care versus other broad areas, and also within the health sector. When donor resources are provided to primary health care, Summers said it can often lead to increased government spending in other health sectors (e.g., tertiary care), rather than increasing the pool of resources for primary health care. Summers outlined potential ways to counter this effect, including matching grants tied to government expenditure and careful monitoring of donor efforts. Given the need for greater economic reasoning around the incentives of international assistance, Summers noted that this priority area is an opportunity for collaboration between economics and health researchers.

Regarding the fourth priority area, he said economic analysis can provide insight into designing incentives around health care provision and medical product development. Summers shared the example of physicians in the United States being reimbursed for gastroenterological procedures but not for diet and weight loss counseling, often leading to more procedures being performed and less counseling being provided. These incentives work against the provision of preventive care. Similarly, he noted that many global health institutions have called for the development of new antibiotics to be held in reserve in case of future outbreaks of antibiotic-resistant pathogens. There is no incentive structure in place, however, to encourage pharmaceutical companies to undertake this mission, according to Summers. If they were to develop such a product, he noted they would likely not be able to charge its true value.

Summers concluded by reflecting on the recent trends in global health. While the international community has been able to celebrate the control of infectious diseases in certain parts of the world, they persist in many other parts. As some countries benefit from falling rates of communicable diseases and rising incomes, they are now confronted with rising rates of noncommunicable diseases. Summers said that facing these challenges will require a multifaceted approach with collaboration among experts from the fields of health science, pharmaceutical science, and economics.

REFLECTIONS FROM THE KEYNOTE PRESENTATION

Peter Sands, executive director of The Global Fund to Fight AIDS, Tuberculosis and Malaria, provided a few remarks in response to Summers’s presentation and then outlined the desired outcomes of the workshop. Sands noted that while the huge economic and human costs posed by microbial threats may be obvious to those attending this meeting, policy makers rarely consider these threats when making economic decisions. This consideration would only happen in exceptional circumstances such as during a major infectious disease outbreak, he said. Despite the availability and value of economic tools, such as the ones described by Summers, Sands argued that based on his experiences, the world of global health is sometimes reluctant to use these tools. However, resources are limited and using available data and tools to make explicit decisions on trade-offs and investments seems the most reasonable path to follow, in his view.

Sands further reflected on the challenges of using economics to understand microbial threats. He noted that while a number of academic institutions and organizations have done a large amount of work to assess the economic burden and costs of microbial threats, the evidence base for this field is quite fragmented with varying methodologies being used. For example, the methodologies being used to understand the economics of antimicrobial resistance are different from those being used for endemic infectious diseases. Additionally, much of the economic cost of emerging infectious disease outbreaks stems from people getting scared of contracting the disease and subsequently changing their behaviors to avoid being infected—this factor may also call for a different type of modeling. While different methodologies may be needed at times to understand the complexities of the economics of microbial threats, Sands suggested that research silos could be reduced in this field. These silos may be the result of failures of communication between those working in public health and clinical medicine, and those working in economics, he said.

Finally, Sands highlighted the need to use economics to ensure there are appropriate medical products to counter microbial threats. He emphasized the importance of addressing the economic misalignment of incentives and market failure issues as described by Summers, which explain the lack of investment in preparedness efforts such as the development of new antibiotics. According to Sands, changing the incentives is necessary to make a sustainable improvement to the current situation for medical products research and development (R&D).

Reflecting on the breadth of topics to be covered in the workshop, Sands highlighted a few desired outcomes of the workshop. First, he hoped that the workshop would help create a shared vision on the best ways of illuminating the economic impact of microbial threats as well as to identify

the role of economic tools in facilitating the financing of pandemic preparedness. Additionally, he anticipated that the workshop would shed light on better approaches using economic tools to unblock some of the impediments to preparedness, mitigation strategies, and accelerating R&D of medical products. Finally, Sands hoped that the workshop would uncover where and how economic tools could be leveraged to inform choices on investing in critical health interventions.