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Introduction to the IAEN forum

April 28, 2011
spitcher at futuresgroup.com

I would like to formally welcome you to the International AIDS and Economics Network. IAEN has been in existence for over 17 years, yet we continue to evolve as an organization. When this organization began, it represented the only forum in which "AIDS economists" in Washington DC could meet and discuss issues such as the macroeconomic impact of AIDS, AIDS and its impact on agriculture and the workplace, the cost and cost-effectiveness of HIV/AIDS programs, etc.

Over time IAEN has managed to expand its scope, both in terms of reaching individuals globally as well as expanding its focus beyond the small number of economists who work exclusively in the field of HIV/AIDS. IAEN members are not only researchers in the field of AIDS and economics, but also policymakers and other decisionmakers who are ultimately the consumers of information which gets collected on the issue of AIDS and economics. IAEN has also expanded beyond being just an organization with "face-to-face meetings", by utilizing virtual social media (e.g., Linkedin) to encourage the dissemination of the latest research as well as encouraging discussions on topics of critical interest.


As a member of the IAEN, we would ask for your participation in a number of ways. First, we ask that you take the chance in your busy schedules to read the relevant documents which we place online, both on the IAEN Linkedin group and as part of the IAEN website (www.iaen.org). Second, we would ask that you provide feedback and comments on these articles. Finally, we would ask you to identify articles that you believe would be of interest to other members of the IAEN and to share these whenever possible.


Introduction to the IAEN Forum on Effectiveness and Efficiency


The next step in the evolution of the IAEN is this forum, a discussion among economists and policymakers on the topic of efficiency and effectiveness of HIV/AIDS resources. The IAEN has requested that a number of researchers write short (generally no less than 1 page) thought pieces on the topic of HIV and AIDS. These will then serve as a starting point for our discussions on this topic.


The topic for this forum, "efficiency and effectiveness of HIV/AIDS interventions" was selected for a number of reasons. While this has been an issue of concern for economists for many years, it has not been a topic which was on the top of the agenda for donors throughout most of the last decade. Not surprisingly, effectiveness and efficiency has become a bigger and more critical issue as resources stopped growing throughout the last three years. By all indications, the current period of "flat line funding", especially by PEPFAR and the Global Fund, will become a regular and long-term part of our vocabulary. While in the past it was necessary to adjust to the reality of rapid growth, we now face the very real situation of long-term stagnant funding. How should we, as economists and policymakers, respond to this new reality?


When discussing "value for money" (which IÆll used interchangeably with "effectiveness and efficiency") in regards to HIV and AIDS, I tend to focus on 3 issues: 1) How much money do we need (cost), 2) Are we allocating it in a way to achieve the greatest possible impact (effectiveness) and 3) Are we truly spending our resources so that we achieve the best quality output for the resources we are spending (efficiency)?


How Much Money Do We Need?


Do we have enough money? By most accounts, we must conclude: 1) the level of resources available for prevention and treatment has increased dramatically in the last decade (reaching $15.9 billion in 2009), and 2) these resources remain inadequate to assure that the goal of universal access is achieved (UNAIDS estimates that over $25 billion was required in 2010). Even more worrying, data indicate that the level of international resources spent on HIV and AIDS declined for the first time ever in 2009.


When UNGASS was first being launched, economists projected that funding would need to increase to about $10 billion by 2005, an increase of nearly 10 fold from existing levels. As someone involved in those early predictions, I was very pessimistic about the feasibility of achieving such an optimistic goal in generating new resources. However, new spending (especially from the US government under the auspices of PEPFAR and from the global community under the Global Fund) did increase dramatically, reaching $8.3 billionby 2005. Yet the good news about resource generation was tempered by the fact that many of the other UNGASS targets were not achieved.


One of the challenges economists and policymakers face in terms of estimating resource needs is that despite over 30 years of progress, we still donÆt have a solid understanding of what interventions should really cost. Some of the most comprehensive data collection on costs from PANCEA indicated that unit costs were wildly different, not only across countries but also within them. Meanwhile research on the costs of orphan programs indicate further wild variations, ranging from as low as $63 in Ethiopia and as high as $946 in Botswana. This raises the question of how donors should be budgeting their increasingly limited resources? What does it really cost to effectively and efficiently reach an orphan with at least a minimum package of useful services?


The reality of "flat line funding" has perhaps most dramatically affected countries which had the greatest initial success in moving towards universal access. Latin America, for example, rapidly expanded ARV coverage, reaching 49% by 2008. However, by 2009, coverage had only inched up by an additional 2%. Similarly in North Africa and the Middle East, ARV coverage only increased from 10% in 2008 to 11% in 2009. 


Are We Allocating Available Funds Wisely?

Given an environment of severely constrained resources, one solution is to reallocate funds in order to assure that the greatest possible impact is achieved. 


"The resource availability for the AIDS response has always fallen short of what is needed. National programmes have had to ensure that programme choices are effective and efficient to have the maximum impact in averting new HIV infections and AIDS-related deaths. Countries have seen best results when resources are tailored to epidemic patterns and have followed evidence: for example, treatment programmes that use the most effective combination of drugs and male circumcision as a priority component of prevention in generalized epidemics. In many countries, programmes promoting abstinence received far more resources than efforts to increase condom use or reduce multiple partners. Evidence from Zambia shows that, without the right mix of behavioural interventions, gains are minimal." - UNAIDS. "Global Report 2010".


The issue of allocative efficiency has been discussed widely in a number of publications, with numerous and disturbing examples of HIV prevention resources being allocated to interventions which are unlikely to have an impact on the epidemic. The most striking examples include cases of resources being focused on the general population when the epidemic is actually spreading among most-at-risk populations (MARPs).  


There is a need to determine what is the optimal allocation of resources for any one country. The nature of the epidemic in any country, as well as issues of cost and culture, should all play a role in determining what is optimal allocation of HIV and AIDS resources. However, at this point in time, insufficient economic or epidemiologic research is available to guide countries in their determination of the optimal allocation of funds.


Are We Using Funds Efficiently?


In addition to allocative efficiency, we should also consider whether funds are actually being used in the most efficient way possible. Male circumcision presents a particularly interesting example of how important efficiency can be. In this case, task sharing and task shifting have been shown to be essential in any roll-out of MC services. 


Efficiency also requires that we have a clear understanding of which services within an intervention are actually going to improve the quality of life of the clients receiving these services. Programs designed to reach orphans and vulnerable children (OVC) have consumed a significant quantity of all HIV and AIDS resources, yet little is known about which OVC interventions actually increase the quality of life of the children being reached. Should OVC programs, for example, focus more on food and nutrition, legal rights, shelter, income-generating activities, education, etc? How effective is the delivery of these services? Sadly there are significant gaps in our understanding about what is meant by "efficient OVC programs".




Throughout this forum, I hope that we will make progress in better understanding how much is required, how those resources should be allocated and how we may be better placed to efficiently spend those resources which are available.


Steven Forsythe

IAEN President






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