by
August 01, 2012
This is a joint post with Rachel Silverman and Amanda Glassman
Christmas came early this year for the wonkiest of PEPFAR-watchers. Our gift: the preliminary report on the pilot of PEPFAR’s Expenditure Analysis Initiative, an important and exciting move by PEPFAR towards evidence-based decision making and greater transparency.
For the uninitiated, expenditure analysis (EA) is what it sounds like; it provides an account of where money gets spent and on what. Here’s why it could be a game changer: This seemingly simple tool is essential for realizing huge potential gains in both technical and allocative efficiency, two core components of value for money. For PEPFAR to improve the efficiency of its investments, PEPFAR must regularly assess in detail what it is paying for. For example, by tracking the unit costs of service delivery in a specific area, such as testing and counseling in Mozambique, PEPFAR calculated the relative cost-effectiveness of different service delivery models and implementing partners. Using this data, it was able to reallocate resources toward the most efficient delivery strategy (provider-initiated testing and counseling) and to identify and reprogram low-performing grants.
The report is not comprehensive; rather, it provides a curated sample of EA initiatives in six PEPFAR countries. In addition to the analysis itself, the report also provides cases studies of EA’s role in PEPFAR program management. This “sampler” approach makes it difficult to draw any concrete conclusions from the data, and a few shortcomings are evident. For example, prevention classifications may be too aggregated to be useful, and spending data is not clearly related to programmatic information. Moreover, although expenditure is broken down by general cost category or program area, it is not available by target population and whether it reached populations most at-risk (excluding orphans & vulnerable children). Distinguishing between what is delivered (the intervention), and who receives the intervention (what population) is important for tailoring a set of interventions to a country’s epidemic and modes of transmission. In sum, the report is mostly illustrative in its presentation of EA finding, and we hope that further information, data, and analysis (including the standardized EA instrument) will be made public soon.
Nonetheless, the report demonstrates the wide range of potential applications for using EA to improve value for money, which is particularly encouraging given PEPFAR’s plans to institutionalize EA into its routine annual reporting. For example:
- EA helps PEPFAR to better understand the cost components of “program management” expenses above the facility level in Zambia.
- Calculations of unit costs for different prevention approaches helps to inform PEPFAR’s portfolio allocations in Uganda.
- Analysis of expenditures by program area helps PEPFAR to align its funding with South Africa’s National Strategy Plan and to support a future transition of the program to the Government of South Africa.
- Using EA, PEPFAR identified secondary-care facilities as the most cost-effective venue for the prevention of mother to child transmission (PMTCT) of HIV in Nigeria (see illustration below).
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CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.