Governments are under continuous pressure to make difficult trade-offs about the use of scarce public resources. This applies to the budget as a whole, but also within sectors like health.
CGD Policy Blogs
As middle income countries transition from donor support and increasingly use domestic funds to finance health programmes that have previously received substantial external aid, it is imperative that they build and use Health Technology Assessment capacities so that they can prioritise investment in good value technologies and services.
As countries reaffirm their commitments to achieving Universal Health Coverage, governments face extraordinary pressure to allocate scarce resources in a publicly justifiable manner. The growing list of available health interventions and increasing demand for health services mean that tough spending decisions have to be taken, with unavoidable trade-offs. How can such hard choices be made?
Though there are various definitions of HTA, and different approaches for considering evidence on clinical effectiveness, economics, social values, and ethics, there is a universal emphasis on generating transparent and evidence-informed recommendations for health coverage decisions.
Policymakers and clinicians in global health often face considerable uncertainty when making decisions. While statistical uncertainty can be accounted for by placing confidence intervals on the estimated impacts of different policies and treatment regimes, “deep” uncertainty poses a more fundamental challenge to decision-making.
Back in February, the US Council of Economic Advisers issued a white paper on drug pricing implying that other rich countries should stop “free riding” off American innovation by negotiating drug prices to unfairly low levels after the US fronts the research and development costs. Perhaps in response, President Trump recently announced a proposal to bring down US drug prices. But until the US corrects the structural flaws in its own healthcare system, these efforts are bound to fall short.
Cost-effectiveness analysis (CEA) can help countries attain and sustain universal health coverage (UHC), as long as it is context-specific and considered within deliberative processes at the country level. Institutionalising robust deliberative processes requires significant time and resources, however, and countries often begin by demanding evidence (including local CEA evidence as well as evidence about local values), whilst striving to strengthen the governance structures and technical capacities with which to generate, consider and act on such evidence. In low- and middle-income countries (LMICs), such capacities could be developed initially around a small technical unit in the health ministry or health insurer. The role of networks, development partners, and global norm setting organisations is crucial in supporting the necessary capacities.
This is a joint post with Kate McQueston.
"Every country, no matter how wealthy or how impoverished, cannot afford to waste money in healthcare on health technology that does not contribute to health."
These words were spoken by Harvey V. Fineberg, the President of the Institute of Medicine, at a recent event co-hosted by CGD and PAHO, which highlighted the importance of supporting health technology assessment (HTA) in the Americas. Low-and middle-income countries are increasingly interested in building capacity for priority setting, particularly in regards to public funding in a time where pressures to incorporate costly new technologies are on the rise and donor contributions are stagnating. Over the past five years Brazil, Chile, Costa Rica, Colombia, Croatia, Estonia, the Republic of Korea, Malaysia, and Uruguay have also added health technology assessment agencies—tasked with varying responsibilities, including the generation or coordination of health technology assessment and budget impact analysis, as well as the creation recommendations for coverage or reimbursement decisions related to public spending.
Given a small budget, would it make sense to vaccinate 10 children against childhood diseases, or provide medicines to one woman which would prevent transmission of HIV to her unborn child?
In today’s global health arena where resources are limited and demands are growing, policy makers constantly face such budgetary dilemmas with little expert guidance.