AIDS Treatment in South Asia: Equity and Efficiency Arguments for Shouldering the Fiscal Burden When Prevalence Rates are Low

The slower spread of AIDS in South Asian countries, combined with the fact that most South Asian countries have higher per capita incomes than the most severely affected countries of other regions imply that the various impacts of the disease will be smaller in South Asia than in the worst affected countries in other regions. While justified with respect to the impact of the disease on economic output, on poverty, or on orphanhood, this conclusion does not follow with respect to the health sector, where the relatively minor public role in health care delivery and the entrepreneurial and heterogeneous private health and pharmaceutical sectors combine to magnify the potential impact of the epidemic. This paper uses recent epidemiological data on the extent and rate of spread of HIV/AIDS in South Asian countries and alternative scenarios regarding future government efforts to expand access to AIDS treatment in order to estimate the future need for antiretroviral treatment in South Asian countries and the fiscal burden that their governments will shoulder if they decide to provide or finance all of the needed care. Since AIDS treatment cannot be presumed to slow HIV transmission and may speed it, the usual argument for paying for such treatment with public funds is on equity grounds—that it will prevent poverty and orphanhood. Indeed this paper estimates that public financing of AIDS treatment might avert poverty for about three percent of the Indian population, for example. However, data on the quality of private health care in India suggests that another effect of publicly produced AIDS treatment would be to crowd out lower-quality private AIDS treatment, thereby preventing some of the negative spillovers of poor quality private treatment. The paper closes by arguing on efficiency grounds that the government role in AIDS treatment should encompass both regulation of the private sector and support for quality “structured” AIDS treatment in the public sector.AIDS, HIV, South Asia

Sources of financial assistance for households suffering an adult death in Kagera, Tanzania

The AIDS crisis in Africa and elsewhere compels us to design appropriate assistance policies for households experience a death. Policies should take into account and strengthen existing household coping strategies, rather than duplicate or undermine them. The authors investigate the nature of coping mechanisms among a sample of households in Kagera, Tanzania in 1991-1994. They estimate the magnitude and timing of receipts of private transfers, credits, and public assistance by households with different characteristics. Their empirical strategy addresses three common methodological difficulties in estimating the impact of adult death: selection bias, endogeneity, and unobserved heterogeneity. The authors find that less-poor households (those with more physical and human capital) benefit from larger receipts of private assistance than poor households. Resource-abundant households are wealthy in social assets as well as physical assets. Poor households, on the other hand, rely relatively more on loans than private transfers, for up to a year after a death. This suggests that credit acts as insurance for households where informal interhousehold assistance contracts are not enforceable. A donor in Kagera can be sure that assistance to a wealthy household may not be able to return the favor. Assistance to the poor is more likely to come with more formal arrangements for repayment. Formal-sector assistance is targeted toward the poor immediately following the death. The impact of adult deaths on households may be mitigated either ex ante, through programs that minimize poverty and vulnerability, or ex post, by assistance targeted to the poorest and most vulnerable households. In addition, to the extent to which micro-credit programs improve access and lower the total costs of borrowing, they may not only stimulate growth and investment but also help resource-poor households overcome the impact of an adult death in the areas hard-hit by the AIDS epidemic.Rural Poverty Reduction,Safety Nets and Transfers,Services&Transfers to Poor,VN-Acb Mis -- IFC-00535908,Housing&Human Habitats

Antiretroviral therapy awareness and risky sexual behaviors : evidence from Mozambique

This paper studies the effect of increased access to antiretroviral therapy on risky sexual behavior, using data collected in Mozambique in 2007 and 2008. The survey sampled both households of randomly selected HIV positive individuals and households from the general population. Controlling for unobserved individual characteristics, the findings support the hypothesis of disinhibition behaviors, whereby risky sexual behaviors increase in response to the perceived changes in risk associated with increased access to antiretroviral therapy. Furthermore, men and women respond differently to the perceived changes in risk. In particular, risky behaviors increase for men who believe, wrongly, that AIDS can be cured, while risky behaviors increase for women who believe, correctly, that antiretroviral therapy can treat AIDS but cannot cure it. The findings suggest that scaling up access to antiretroviral therapy without prevention programs may not be optimal if the objective is to contain the disease, since people would adjust their sexual behavior in response to the perceived changes in risk. Therefore, prevention programs need to include educational messages about antiretroviral therapy, and address the changing beliefs about HIV in the era of increasing antiretroviral therapy availability.Population Policies,HIV AIDS,Disease Control&Prevention,Gender and Health,Adolescent Health

The cost and cost-effectiveness of alternative strategies to expand treatment to HIV-positive South Africans: scale economies and outreach costs

This repository item contains a single issue of the Health and Development Discussion Papers, an informal working paper series that began publishing in 2002 by the Boston University Center for Global Health and Development. It is intended to help the Center and individual authors to disseminate work that is being prepared for journal publication or that is not appropriate for journal publication but might still have value to readers.The South African government is currently discussing various alternative approaches to the further expansion of antiretroviral treatment (ART) in public-sector facilities. We used the EMOD-HIV model, a HIV transmission model which projects South African HIV incidence and prevalence and ARV treatment by age-group for alternative combinations of treatment eligibility criteria and testing, to generate 12 epidemiological scenarios. Using data from our own bottom-up cost analyses in South Africa, we separate outpatient cost into nonscale- dependent costs (drugs and laboratory tests) and scale-dependent cost (staff, space, equipment and overheads) and model the cost of production according to the expected future number and size of clinics. On the demand side, we include the cost of creating and sustaining the projected incremental demand for testing and treatment. Previous research with EMOD-HIV has shown that more vigorous recruitment of patients with CD4 counts less than 350 is an advantageous policy over a five-year horizon. Over 20 years, however, the model assumption that a person on treatment is 92% less infectious improves the cost-effectiveness of higher eligibility thresholds, averting HIV infections for between $1,700 and$2,800, while more vigorous expansion under the current guidelines would cost more than $7,500 per incremental HIV infection averted. Based on analysis of the sensitivity of the results to 1,728 alternative parameter combinations at each of four discount rates, we conclude that better knowledge of the behavioral elasticities could reduce the uncertainty of cost estimates by a factor of 4 to 10

Food crisis, household welfare and HIV/AIDS treatment : evidence from Mozambique

Using panel data from Mozambique collected in 2007 and 2008, the authors explore the impact of the food crisis on the welfare of households living with HIV/AIDS. The analysis finds that there has been a real deterioration of welfare in terms of income, food consumption, and nutritional status in Mozambique between 2007 and 2008, among both HIV and comparison households. However, HIV households have not suffered more from the crisis than others. Results on the evolution of labor force participation suggest that initiation of treatment and better services in health facilities have counter-balanced the effect of the crisis by improving the health of patients and their labor force participation. In addition, the authors look at the effect of the change in welfare on the frequency of visits to a health facility of patients and on their treatment outcomes. Both variables can proxy for adherence to treatment. This is a particularly crucial issue as it affects both the health of the patient and public health, because sub-optimal adherence leads to the development of resistant forms of the virus. The paper finds no effect of the change in welfare on the frequency of visits, but does find that people who experienced a negative income shock also experienced a reduction or a slower progression in treatment outcomes.Health Monitoring&Evaluation,Disease Control&Prevention,Food&Beverage Industry,Gender and Health,Food Security

Impregnated nets cannot fully substitute for DDT : field effectiveness of Malaria prevention in Solomon Islands

The incidence of malaria in Solomon Islands has been declining since 1992, but there is a large geographical variation between areas in the incidence level and the rate of decline. The authors used a mix of control interventions, including DDT residual house spraying and insecticide-treated mosquito nets. Data on monthly incidence and control activities performed from January 1993 to August 1999 were gathered for 41 out of the 110 malaria zones in the country. Monthly reports on the number of fevers seen at outpatient health clinics in the same zones over the same period were also extracted from the clinical health information system. The authors used multivariate random effects regression, including calendar month as an instrumental variable, to investigate the relationship between the number of malaria or fever cases and the control measures applied by month and zone, while adjusting for rainfall and proximity to water. The results showed that DDT house spraying, insecticide treatment of nets, and education about malaria were all independently associated with reduction in incident cases of malaria or fever, while larviciding with temephos was not. This was true for confirmed malaria cases even when a variable representing the passage of time was included in the models. The results show how much each method used was contributing to malaria control in Solomon Islands and how it can be used to design the most cost-effective package of interventions. The evidence suggests that impregnated bednets cannot easily replace DDT spraying without substantial increase in incidence, but impregnated nets do permit a substantial reduction in the amount of DDT spraying.Health Monitoring&Evaluation,Public Health Promotion,Climate Change,Disease Control&Prevention,Early Child and Children's Health,Health Monitoring&Evaluation,Climate Change,Malaria,Early Child and Children's Health,Health Indicators

On the care and feeding of a gift horse: The recurrent cost problem and optimal reduction of recurrent inputs

In contrast to the existing literature, which explains the recurrent cost problem as largely the result of institutional impediments to LDC welfare maximization, this paper analyzes the problem by constructing a series of scenarios in which the less developed country would be led to reduce the flow of recurrent inputs to a development project in order to maximize its own welfare. A distinction is drawn between situations in which the project design is correct ex ante, and those in which it is wrong ex ante. If the project design is correct ex ante, then the recipient country which deviates from the project design does so at a cost to its own welfare unless one or more of the assumptions embodied in the project design have turned out to be false. This paper develops a typology of the possible "surprises" that could lead a host country to reduce recurrent input to a project in order to maximize social welfare. It is proposed that donors use such a typology to help determine the true cause of recurrent input reduction in any given instance. An alternative possible reason for the host country to reduce recurrent inputs to a project is that the project was incorrectly designed in the first place: i.e. the project design could be wrong ex ante. The paper uses a simple model of donor and recipient nation objectives to describe the contractarian relationship between the two nations with respect to the project design and implementation process. According to the model, the donor and recipient countries have a common interest in the output of the development project, but their interests are not identical. In the situation described by the model, both nations have an incentive to agree to a project design that is wrong ex ante. Subsequently the LDC’s reduction of recurrent input can be viewed as its attempt to do the best it can given the inappropriate project with which it is saddled. The analysis is illustrated with a modified Edgeworth-Bowley box diagram. Finally, the paper demonstrates that, like the free-rider problem, the recurrent cost problem can be formulated as a variety of the “prisoner’s dilemma” game form. This observation leads to several policy recommendations for the resolution of the recurrent cost problem which are analogous to the solutions that have been developed for the general free-rider problem as it is characterized by the prisoner’s dilemma. The paper concludes by summarizing the major policy recommendations of the analysis and by discussing some of the possible difficulties that would arise in attempting to implement the recommended policies

On the care and feeding of a gift horse: The recurrent cost problem and optimal reduction of recurrent inputs

In contrast to the existing literature, which explains the recurrent cost problem as largely the result of institutional impediments to LDC welfare maximization, this paper analyzes the problem by constructing a series of scenarios in which the less developed country would be led to reduce the flow of recurrent inputs to a development project in order to maximize its own welfare. A distinction is drawn between situations in which the project design is correct ex ante, and those in which it is wrong ex ante. If the project design is correct ex ante, then the recipient country which deviates from the project design does so at a cost to its own welfare unless one or more of the assumptions embodied in the project design have turned out to be false. This paper develops a typology of the possible "surprises" that could lead a host country to reduce recurrent input to a project in order to maximize social welfare. It is proposed that donors use such a typology to help determine the true cause of recurrent input reduction in any given instance. An alternative possible reason for the host country to reduce recurrent inputs to a project is that the project was incorrectly designed in the first place: i.e. the project design could be wrong ex ante. The paper uses a simple model of donor and recipient nation objectives to describe the contractarian relationship between the two nations with respect to the project design and implementation process. According to the model, the donor and recipient countries have a common interest in the output of the development project, but their interests are not identical. In the situation described by the model, both nations have an incentive to agree to a project design that is wrong ex ante. Subsequently the LDC’s reduction of recurrent input can be viewed as its attempt to do the best it can given the inappropriate project with which it is saddled. The analysis is illustrated with a modified Edgeworth-Bowley box diagram. Finally, the paper demonstrates that, like the free-rider problem, the recurrent cost problem can be formulated as a variety of the “prisoner’s dilemma” game form. This observation leads to several policy recommendations for the resolution of the recurrent cost problem which are analogous to the solutions that have been developed for the general free-rider problem as it is characterized by the prisoner’s dilemma. The paper concludes by summarizing the major policy recommendations of the analysis and by discussing some of the possible difficulties that would arise in attempting to implement the recommended policies