"ECONOMICS OF IMMUNIZATION"
Oslo Workshop: 22-23 August 2002
That vaccines are a good 'buy' is not in question. But would immunization still be a good buy if vaccines cost dollars instead of pennies, if reaching the most inaccessible communities would cost the system $50 per immunized child, instead of $20? How much are governments and donors willing to commit to long-term investments in vaccines and immunization? What about other preventive health services?
The GAVI Financing Task Force (FTF) has been exploring these questions, with two major efforts scheduled to elicit results in the next few months. An immunization financing database is being developed to document funding flows from both internal and external sources to low-income countries' immunization programs, and the health systems in which they operate. Financial Sustainability Plans, a requirement for countries to continue receiving Vaccine Fund resources, will be prepared by November 2002 in the first 13 countries that received GAVI awards.
These efforts will bring valuable information. But with the environment for aid funding growing increasingly outcome-oriented, and the aid funding picture more complex, more information is clearly needed. And at its June meeting in Paris, the GAVI Board emphasized the need for more solid data demonstrating the link between immunization and better health and economic outcomes in developing countries.
To complement the efforts of the FTF, the GAVI Secretariat organized Economics and Immunization, a small workshop held in Oslo on 22 and 23 August, with developing country health and finance officials, health economists, public health experts, and bilateral donors and foundations (see Participants' List attached). The meeting was organized by ECON1 .
The group was asked to consider and provide input to help shape a research agenda to:
a. quantify the link between investing in immunization and prospects for economic development;
b. clarify the information that decision makers need to justify increased investments in immunization, and to identify the sources from which such investments must be met; and
c. explore different mechanisms to increase equitable access to immunization.
The group agreed on the following main points:
Improving immunization programs is doable Improving immunization programs to increase access in most developing countries today is doable and affordable. According to preliminary estimates, significantly more children could be reached in the next five years with incremental increases in spending of less than $100 million per year. Ghana has shown that increases in immunization coverage can be achieved, in a health system basket funding approach, through deliberate policy decisions. Further analysis is needed to determine the cost-effectiveness of different strategies for reaching remote populations.
Vaccines contribute to the MDGs Immunization against childhood killers is an example of an essential health service that will contribute to reducing child mortality, one of the Millennium Development Goals (MDGs) - the guiding targets for the development community.
The two-way health/poverty link: the case still needs to be made The causal relationship between improved health outcomes and economic growth has been widely accepted within the health policy community. Outside this community, however, the causal link has not been as universally accepted, including among some of those with fiscal responsibility in developing and donor countries, and in multilateral agencies and development banks. It will be important to determine whether this is due to a lack of awareness of the data that exist or a rejection of these data. Depending on the outcome of this analysis, the most appropriate response may be better communication, more data, or a combination thereof.
Macroeconomic conditions-- It is clear that the economic benefits of improved health can only be attained in countries that also have sound economic policies that provide for economic stability. However, in some countries, the economic indicators may not tell the whole story. There are reports that the IMF has constrained donor spending on health in certain countries for fear of destabilizing longer term capacity for government spending. Immunization may be a good case study to examine this dilemma and determine the limitations of such defined constraints and whether they harm a countries' ability to improve the health of its population.
Diversity of countries-- Even a cursory review of data reveals wide disparity in country situations. A 'one size fits all' approach to improving access to immunization or securing long-term financial sustainability for immunization programs will not work.
Long-term, predictable donor commitments In order to succeed at long-term financial planning, developing countries will need longer-term and more reliable commitments of support from donors. This is especially true for the poorest countries, and for those whose health budgets rely upon significant external support. Donor commitments to these countries should be untied to provide the country with decision-making power, and include an exit strategy if a country rises above a certain income. Performance targets could be agreed upon and monitored.
Internal vs. external funding While increasing self-sufficiency will always be the ultimate goal, a new definition of financial sustainability has been adopted by the GAVI Board, as a country's ability to mobilize and efficiently use domestic and supplementary external resources on a reliable basis. Countries' internal allocation of commitments to immunization need to be based on country situations; initial analysis of commitments within countries shows wide variance. In many countries, increased financial commitments from the national budgets could in fact be made a condition for further donor funding, but where external support is pooled (e.g. sector support and general budget support) increased fungibility makes the distinction between internal and external support for immunization less meaningful.
The importance of health system, development and poverty reduction strategies At the country level, decisions on financing for immunization are not made in isolation but within the wider context of funding for the health system and public spending in general. Immunization coverage is included in many PRSPs as an indicator of health system performance. The challenge for GAVI is to help secure increased flows of resources for health by demonstrating results, rather than to focus too narrowly on immunization in isolation.
As a result of the discussions, the GAVI Secretariat will ask partners to consider funding for three research projects. Considering the need to have rapid results and minimize burdens on under-staffed and over-burdened developing country health ministries, the researchers will probe existing data sources instead of launching new investigations.
1. Immunization and Development
Researchers Bloom and Canning2 will be commissioned to analyze the economic benefits of increasing investment to expand immunization coverage, especially as compared to investing in other interventions including new vaccines and other poverty alleviation efforts such as education, malaria control and family planning programs. The analysis should include:
- a distinction between the cost/benefits of increasing coverage of:
- the basic 6 vaccines,
- the above plus the additional antigens against hepB and Hib,
- the above plus future new vaccines (against pneumo and rota, for example)
2. Immunization and Donor Behavior
ECON will be commissioned to undertake a project to identify appropriate donor and developing country commitments to immunization programs in health systems. The project will aim to produce an information-based advocacy strategy to secure high-level political commitment. Components will include:
- A grouping of countries based on their current macroeconomic, health and budgetary situations.
- In collaboration with the FTF, an in-depth analysis of data from one representative country from each of the above groups. Analysis will include:
- donor contribution to health system,
- government spending on health as a proportion of GDP and budget, and the nature of spending
- overall MTEF and PRSP priorities and commitments
- predicted costs of expanding coverage with basic vaccines; with hep B; Hib; and adding new vaccines
- key health outcome indicators
- Based on the above analysis, assessment of the prospects for investments from internal budgets versus external funding.
3. A Strategic Framework for Increasing Access to Immunization
An access team has been identified from within the GAVI Implementation Task Force. To complement the team's efforts, the GAVI Secretariat and partners will work further with McKinsey Consulting to develop a strategic framework for how the Alliance can support countries to increase access not only to immunization but to other essential health services as well. The project, which will be conducted in close collaboration with the GAVI Implementation and Financing Task Forces and health system experts, will include the following:
- Grouping of countries based on their current DTP3 coverage and future targets
- Exploration of possible incentive schemes at the district level.
- Identification of important district-level tools 'best practices' that could be shared with other countries to improve the quality of all primary health care.
- Analysis of the roles of the different actors government officials, national, regional and global representatives of GAVI partners, and local communities.
The Partners Meeting in Dakar from 20-22 November will provide an important opportunity to continue the discussions launched in Oslo and review the progress to date on the activities stemming from the meeting. By February/March of 2003, the work on the projects will be near completion and brought together with the work of the FTF on financial sustainability plans and the immunization financing database.
1 ECON Centre for economic analysis, Oslo, Norway.
2 David Bloom, professor of economics and demography; and David Canning, professor of economics, both at Harvard University's School of Public Health.