Defining the Value of Global Health Investment

Public awareness campaign for using bed nets in Guédiawaye, Senegal. Picture from author's collection.

Public awareness campaign for using bed nets in Guédiawaye, Senegal. Picture from author's collection.

By Marlee Tichenor

In a recent PLoS Medicine study, economist Aleksandra Jakubowski and her colleagues argue that the US’ President’s Malaria Initiative (PMI) has helped 19 Sub-Saharan African countries save the lives of 1.7 million children under 5 since the organization was established in 2006. The group of researchers compared the mortality rates due to malaria and the coverage of antimalarial technologies between 1995 and 2014 in 19 countries that receive funding from PMI to 13 countries that do not.

As development assistance for health has plateaued since 2010 and as the global health community grapples with the implications of potentially devastating US divestment in the field, health economists’ research about the impact of US investment in global health initiatives has been taken up by journalists and advocates to convince politicians and donors of the importance and power of global health investment. In this blog post, I briefly introduce the rise of health economics in the 20th century and a few methods for economically measuring health investment as a means to provide some context to current health care financing debates. Global health economics is a large field and will take much longer than one blog post to discuss, so look forward to coming introductory posts on the global burden of disease (GBD) and disability-adjusted life years (DALYs), among other topics.

As some scholars have argued, including historian Aaron Shakow, one origin of the economization of global health is the economization of health care in America following the roll out of Medicare and Medicaid in the 1960s and the justification of the large economic burden the programs put on the US budget. A foundational piece for extending cost-effectiveness analysis to health care was an analysis of certain treatments for chronic renal disease, conducted by Herbert Klarman and his colleagues in 1968. A few years later, in 1972, Michael Grossman – coming out of Gary Becker’s school of human capital – laid the groundwork for theorizing health as human capital, arguing that health was both a consumption and investment commodity. These analyses then led to Richard Zeckhauser and Donald Shepard to quantify the value of a life saved and introduce the metric of quality adjusted life years (QALY) in 1976, which I will discuss further in a future post. These applications of economic theories to the question of health and health care served as a starting point for many health economics attempting to value US investment in its own health care systems.

These techniques would be taken up in the 1980s and 1990s by Anne Mills, Chris Murray, Adam Wagstaff, and other health economists working with the World Health Organization and the World Bank in order to analyze the impact of international health development and advocate for more and better prioritized investment of the same. Economic analysis of health investment – through cost-effectiveness, difference-in-differences, amenable mortality, and other kinds of input and output analyses of health care – has become a crucial component of proposing and measuring health interventions. In the decades since the rise of health economics, there has been a proliferation of methods to measure the impact and effectiveness of global health aid.  

In the study mentioned at the beginning of this post, Jakubowski and her colleauges used a difference-in-differences approach to measure the impact by comparing trends in PMI-recipient countries to non-recipient countries. Controlling for other malaria development assistant aid, the team did a statistical analysis based on the presence and intensity (i.e., number of PMI dollars invested in the country) of PMI aid in order to determine how many live were saved by their interventions. They also incorporated into their analysis the differences in the availability and coverage of important antimalarial technologies, like insecticidal mosquito nets, artemisinin-based combinational therapies, and indoor residual spraying. The US is far and away the top funder of malaria control efforts, through PMI but also through its contributions to the Global Fund to Fight AIDS, Tuberculosis, and Malaria and the support of US non-governmental and private organizations, including the Bill & Melinda Gates Foundation. The authors’ point is very clear in the current political moment – lives are being saved by American global health investment and the value of those lives are equal to those in America, in opposition to the morally problematic assumptions that are built into the “America First” political rhetoric.

In the accompanying analysis piece to the PLoS study, Eran Bendavid makes the careful distinction between the efficacy of global health interventions, which can be found in trial settings, and effectiveness. Effective health aid is determined by three features – it “(i) supports large programs (ii) that finance highly efficacious interventions (iii) in populations with high-burden and low-met need.” Effectiveness is often difficult to empirically prove for global health interventions – this PLoS study being an important exception – because there are multiple beneficial impacts of global health aid that cannot be carefully measured. As we continue to investigate the nature of economic analysis and the role of quantified metrics in global health investment in this era of potential global health austerity, it is important to remember that what cannot be quantifiably measured is also important to understanding the impact of global health aid.