Communicable Disease

General Subject Area
Communicable diseases account for one of the largest and most avoidable losses of welfare in the world. Estimates place mortality at about 90% of all avoidable diseases in most age and sex groups. Much of the global harm caused by imperative healthcare factors exists in Sub-Saharan Africa, including 90% of malaria cases. These types of illness negatively impact welfare by causing direct effects through death and loss of productivity. With a smaller workforce, the GDP of countries decreases and families relying on those wages to be earned also suffer. Indirectly, shorter life spans decrease the value of education. A workforce with less education is less innovative, not as productive, and the country as a whole will lag behind developed countries. As people choose not to save, there are less capital funds available to invest into the economy. This further stagnates economic growth in developing countries and would be circumvented through reformed healthcare.
Projects in Detail
Three opportunities are discussed. (1) Malaria is estimated to cause 1 to 3 million deaths every year. This project includes the use of insecticide-treated mosquito nets for children, a two-stage treatment of pregnant women in their first pregnancy, and a switch to more effective drug combination for treatment of those affected. (2) HIV/AIDS is a problem that drastically effect’s the developing world. Over 5% of all deaths worldwide are the cause of AIDS and it is estimated that in 2003 2.5 to 3.5 million died due to this disease. The specific project posed focuses primarily on the prevention of HIV/AIDS in high-risk areas. (3) The strengthening of health services would follow the World Bank’s 1993 World Development Report. This report called for a package that includes: comprehensive immunization, various public health programs, and clinical care for pregnancy and sick children.
Benefits
Based on estimates from the macroeconomic models provided at the Copenhagen Consensus, the economists predicted that the annualized net benefits of eliminating just 50% of malaria cases would cost Int$10-37 billion, with benefit-cost ratios between 1.9-4.7. When looking at the benefits of intervening in the HIV/AIDS crises, the study directed their attention to North Africa, the Middle East, and Asian countries that represent the worst off. They estimated that intervening would result in saving 15-30% of 2000 GNP by 2025. The annualized net benefit of HIV/AIDS control was Int$3.4 billion and a benefit-cost ratio of 14.2. Lastly, when considering just improving the basic health services of developing countries, the models predicted that the annualized net benefit would result in Int$18.2 billion and a benefit-cost ratio of 2.1.
Costs
The costs of Malaria control were based on providing the insecticide treated nets for children and infection treatment drugs. Costs based on macroeconomic models were $18 per capita with a total annualized cost of $10.177 million. A package of Malaria interventions did not have a per capita cost, however total annualized costs were $2,942 million. Costs in HIV/AIDS control include prevention programs and healthcare services. Prevention methods include blood safety using hospital testing. The promotion and distribution of condoms, AIDS education and out reach to high-risk groups. Treatment includes voluntary counseling and testing and available health care services. Based on the Thai program of prevention costs came to $4.25 per capita or $260 million total costs annualized. A Package prevention of HIV/AIDS in six regions came to $1.42 per capita or $7,345 million total costs annualized. Costs of reforming basic healthcare included providing greater immunization and school health programs. Costs based on increase health expenditure: thirteen HIPCs was $584 per child with a total annualized cost of $16,080 million. The 1993 world Development Report minimum package: low-middle-income countries costs came to $65 per capita or $337,073 million total costs annualized.
Quantifying—Dollar Value
Placing a dollar value on human life was very hard to derive for the researches considering the projects. The relation between illness and income were complex for the project managers. They came up with sources to help give those feasible numbers to attach to their projects to control diseases. The project managers looked at the microeconomic and macroeconomic studies to help determine the relationships of disease and economic outcomes on the individual level as well as a wide range of outcomes on a national level. In the end, these studies were used to evaluate efficiency of health interventions and a monetary value could be placed on human life. When looking at the specific projects of HIV/AIDS and Malaria several areas were examined to quantify the value of life. Some of the sources used were macroeconomic impact of disease, studies of cost effectiveness of intervention programs, and evidence of costs and health benefits of large country scale programs already in place. For the basic health services project, regression models were analyzed that measured the efficiency of health expenditures in generating health outcomes. Also, costs and health benefits of the package of interventions recommended in the 1993 World Development Report was considered. A year of life lost was valued at 2003 per capita Gross National Income; this was the ceiling ratio.
Discount Rate
According to the World Health Organization’s (WHO) 2002 World Health Report, the discount rate for the costs of a health program is the opportunity cost of capital, which is the rate of return that investors could be making in financial markets. In the current bear market, a good representation of the opportunity cost of capital is the rate of return of U.S. treasury bonds, because they are viewed as safe investments; the rate of return of 10-year treasury bonds as of March 13, 2009, is 2.87%, according to Google finance. The discount rate for the potential benefits of a program, however, is debatable, and the WHO report states that studies have used discount rates for benefits that range from zero to 5%. Nevertheless, the WHO report recommends that the same discount rate be used for costs and benefits. Therefore, we will use the discount rate of 3% for our cost/benefit analysis because it is the WHO discount rate, and it is a good representation of the current opportunity cost of capital.
Conclusion
When looking malaria, HIV/AIDS, and basic health services, all three produced positive net benefits. Benefits for a package of malaria interventions outweighed those based on evidence from macroeconomic models, by more than $10,000 mil in the best-case scenario. Package for prevention of HIV/AIDS greatly outweighed that of the Thai prevention program, $359, 424 mil to $3,444 mil. The benefit shown in the World Development Report for basic health services was $534,084 mil compared to the increased health expenditures net benefit of $18,236 mil. The benefits vary based on the value of life attributed, with a rather low net benefit with the US$1,250 value compared to the US$100,000 which produced a much greater net benefit. The three categories are interconnected in the fact that strengthening basic health services will improve control of malaria and HIV/AIDS, suggesting that there may be less benefits between the benefit-cost ratios when looking at disease specific interventions and general health interventions separately. Although, there is a lack of evidential base for the findings a clear message stems from the calculations—investments in communicable disease eradication or control greatly exceeds the costs.