MALARIA ECONOMICS

• Introduction
• Methods of malaria economic analysis
• Usefulness and Outputs from malaria economic Analysis
• Malaria Poverty & the Human Development Challenge in Southern Africa

Introduction
Malaria health economics can be split into three distinct areas

• The cost of malaria
• The cost effectiveness of interventions
• The cost of malaria control

1. Economics and Health Economics

Economics is the study of how best to allocate scarce resources when we are faced with unlimited demands on those resources. Over the years the theory and practice of health economics has evolved specifically to answer these questions in the health sector. Health economics has a lot to offer health professionals when they are making difficult decisions on how best to allocate and distribute resources.

Malaria remains a priority health problem in Southern Africa with economic consequences within a context of declining resource allocation in real terms to the health sector. This is exactly the type of problem that health economics has evolved to answer and it has a number of tools to help provide those answers.

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2. Why Measure the Cost of Malaria

There is a need to quantify the economic burden of malaria in countries in Southern Africa, for a number of reasons:

• On humanitarian grounds alone, recognition of the scale of the problem is important.
• An estimate of the cost of malaria in a country will give an indication of the potential benefits to be gained by its control or even its elimination.
• Once the burden of malaria is quantified in economic terms the public and private sectors will, in theory, be able to allocate the optimal amount of available funds to its control and prevention. Once these funds have been allocated, taking into account all other expenditure priorities, work can begin on the best way to spend the given budget. This is where the need for a different kind of economic analysis, that of cost-effectiveness analysis, will arise.
  
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3. The Economics of Malaria and Malaria Control

The health of a nation is of primary importance to economic progress and development. Aside from the value of health per se to the individual and society, health is also directly relevant to economic performance at all levels including the household, private business sector, government and macro economy.

3.1. Economic Effects of Malaria morbidity and Mortality on the Household

Malaria in the household may lead to:

• Absenteeism from work or school
• Important domestic jobs such as cultivation of crops and water/food gathering may be neglected
• Reduced household income
• Reduced household expenditure on food
• Increase in nutritional deficiencies
• Children taking time off school to care for family or earn money
• Reduced expenditure on school fees
• Under performance at school and lack of achievement of personal potential
• Increased financial and time costs of attending health centres and buying drugs
• Increased numbers of orphans and foster children
• Long term losses in household productivity in the case of mortality
• Funeral Costs

3.2. Economic Effects of Malaria on the Private Business Sector

The private business sector may be adversely affected by the problems of a sick workforce.

• The level of productivity may decline (especially in agriculture if an epidemic coincides with harvest or planting time)
• The costs of providing sick pay if it is paid will rise. The cost of private healthcare provided by employers may also rise dramatically.

These factors may lead to a reduction in performance and profits of companies, which in turn may

• Reduce long-term investment
• Reduce overall macroeconomic performance in the country
• If this is the case the revenue available for government expenditure will be less overall as governments cannot spend what they don’t have.
• Tourism may also suffer
• Reducing the amount of foreign currency generated.

3.3. Economic Effects of Malaria on the Government

A government is responsible for the health and wellbeing of its people, rising malaria costs can have the following effects:

• Stretch resources
• Use up funds that could be employed in other important areas to benefit the country
• Drain the healthcare resources
• Reduce revenue available to the Government.
• Hospitals, clinics and health workers may be stretched beyond capacity placing increased pressure on staff and resources
• A reduction in the standard of care to all patients.
• Reduced incomes may lead to reduced income tax revenues and falling consumer expenditure, which will again reduce tax revenue.
• A reduction in private sector profits caused by declining productivity, reduced expenditure, and falling tourism may also reduce tax revenue raised by the government.

3.4. Economic Effects of Malaria on the Macro Economy

The burden of malaria affects all areas of the economy, the overall effect of this is likely to be damaging to the economic performance of Zimbabwe in a number of ways.

• The poor may be unable to care for themselves and may even become poorer as a result of the disease
• The gap between rich and poor may widen
• The rate of development may slow down
• Further pressure may be put on the governments limited resources.
• The private business sector may face reduced investment and growth, limiting success on the world market

This in turn may

• Reduce the inflow of foreign currency and foreign investment.
• Leave the government with even harder choices of how to allocate reduced resources to increased problems.
  
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4. Methods of malaria economic analysis

Objective

Table 1 Aspects of malaria Cost and Control and Specific levels of Evaluation.

A breakdown of the areas to be examined is listed below. They will first be examined at the macro level, i.e. from the perspective of the government and the Ministry of Health. Once these costs have been established, the cost of the different strategies will be estimated at the microeconomic level through case studies at the indicated level. N.B. Dark shading indicates case management strategies, non-shaded areas represent preventative strategies, light shading represents the area should be part allocated to prevention and case management. 

5. Usefulness and Outputs from malaria economic Analysis

5. 1. Establish Validity of Current Resource Allocation

The cost of malaria should be used by decision-makers in the allocation of resources to its control. There are many different areas that have claims on resources both within health (e.g. other major diseases such as HIV/Aids, ARI etc.) and outside the health sector (e.g. education, housing etc.). The magnitude of the problem of malaria and cost which it imposes should be compared to other areas and resource allocation set accordingly to achieve the optimum benefit from utilisation of scarce resources.

The Cost of Malaria Indicates the Priority that Should be Given to it in Relation to all Other Health Problems

The specific output from the analysis that addresses this issue will be an estimate of the burden of malaria in Zimbabwe compared to other major diseases. The analysis will be confined to the health sector only and will not include areas outside the MoH’s jurisdiction. The burden will be based on estimates of days of productivity lost in different age groups due to malaria morbidity and mortality. Sufficient data exists from both the 1992 census and National Health Profile to estimate the burden of all major diseases in Zimbabwe.

5.2. To Advocate for Resources

The economic cost of a particular disease is valuable information to encourage Governments, Private sector, NGOs’s and Households to devote resources to the prevention and treatment of it. If people and sectors are aware of the cost of malaria they can be persuaded to devote more time and resources to its control. This is true for all sectors, for example householders are more likely to spend money on bednets if they understand that they will prevent malaria and the healthcare costs and losses of productivity and life associated with it. Similarly Governments will be more likely to devote resources to malaria control and prevention if they are aware of the vast cost which it imposes on all levels of the economy. Also the private sector will be more inclined to become involved in malaria control when it is made aware of the magnitude of cost which malaria imposes upon it. Essentially, economic data can give weight to arguments for funding, resources and support for malaria control efforts. The reason for this can be explained by a simple equation:

The Cost of Malaria = Potential Benefits of Reducing Malaria

The specific output which addresses this issue will be a report on the costing and breakdown of all the resources employed by the MoH in the National Malaria Control Programme.

5.3. What is the Optimal Strategy?

The costs to the MoH as outlined above can be divided into two categories. Firstly those resources that are allocated to aiming to prevent malaria (e.g. drug prophylaxis, vector control operations and a part allocation of the health education and support services expenditure). And secondly those resources which are aimed at treating malaria (e.g. case management of malaria in the health centres, clinics and hospitals, and a part of the health education and support services). The cost of providing each service will be identified and if combined with effectiveness indicators (probably at a later date due to time constraints) it can be used to identify the most cost-effective methods of controlling and treating malaria. Because the malaria control and healthcare delivery system in have a large number of dispersed delivery units it will not be possible to visit and gather data from every one, therefore a sample must be taken. Stratified sampling will be used to gather data from hospitals, health centres and clinics. Experts will be consulted as to which units should be included in the sampling to give the most accurate estimates. Case studies will be carried out in hospitals, clinics and health centres to gather detailed breakdowns of the individual processes involved in the admission, treatment and care of malaria patients. In order that these processes can be individually costed and used to build up an accurate picture of the economic costs of treating malaria, data on the time spent by each particular member of staff for each task, equipment used and the salaries of staff will be gathered.

Data on vector control operations should be available in the Ministry of Health (MoH), however sampling may need to be employed to estimate the area covered by spray teams or the number of dwellings treated.

5.4. Other uses of Cost analysis are listed briefly below.

-To examine Sustainability - how much it will cost to keep the programme running in the future.

-To calculate the effects on the cost of the programme of changes in the number of malaria cases, for example the cost implications of a large epidemic.

-To answer basic questions on efficiency - it will help to highlight where wastage occurs and show where budgets may be underestimating costs, which may lead to shortages.

-Help in Planning by providing estimates of the future costs as the programme changes and develops.

-Help in Budgeting - budgets can be drawn up more accurately in the future if there is a clear understanding of how much things actually cost. This will help to reduce the problems of overspending or running out of funds for a particular item.

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MALARIA POVERTY AND THE HUMAN DEVELOPMENT CHALLENGE IN SOUTHERN AFRICA

Health & Malaria & Development

The health of a nation is of primary importance to social and economic development. Within Southern Africa, malaria is a major impediment to socio-economic development and an important cause of poverty. Malaria impacts on the economy at a number of levels including within households and communities, the private sector, government and the macro economy.

Malaria and Poverty

Within households and communities, the direct economic costs of malaria comprise prevention and treatment costs. Indirect economic costs may include absenteeism from work or school, neglect of domestic jobs, reduced income and poor scholastic performance. Social costs include bereavement, sickness and death. Such factors are likely to both cause and deepen poverty. Moreover, the burden of malaria is often greatest among the very poor as they are least able to protect themselves and seek treatment. Hence, malaria can exacerbate existing inequalities.

Malaria Health Expenditure

Within the Ministry of Health, malaria uses up resources for its prevention and control. In addition, to expenditure on insecticides, drugs, equipment etc., large numbers of malaria patients may lead to health facility staff being stretched beyond capacity and, thereby, reducing the standard of care received by all patients. Malaria also exerts a major burden on other Government ministries, notably education. Malaria causes staff and student absenteeism and death, poor concentration in class and poor scholastic performance.

Malaria and Economic Productivity

Malaria affects the productivity of the private sector. Key businesses that are particularly affected by malaria are likely to include agriculture, tourism, mining and construction industries. Employees may be affected by the problem of a sick workforce causing declining productivity and costs of providing sick pay. In the long term this may lead to a reduction in the performance and profits of companies. In addition, for tourism the threat of malaria can negatively affect visitors to the country.

Ultimately, the economic burden of malaria damages the economic performance of the SADC region.

Malaria and Equity

Poverty and inequalities are exacerbated, government resources come under increasing pressure, and the private sector faces reduced investment, growth, profits and inflow of foreign currency. Together, this will result in a decline in gross domestic product and socio-economic development being hindered.

Consequently, within Southern Africa, there is need to increase investment in malaria control as well as to understand, investigate and mitigate the relationships between malaria and socio-economic development.

In particular:

• The burden of malaria in terms of illness, deaths and its socio-economic consequences
• The economic cost of malaria control activities within the health sector
• The additional financial requirements needed to significantly strengthen malaria control in Southern Africa
• The socio -economic cost of malaria within households, communities, the private sector and government
• How poverty and social factors interact with malaria within communities and how together they may exacerbate inequalities within society

Improved understanding of these issues will allow policy-makers to advocate for additional resources, strengthen public-private sector partnerships, target resources more effectively and increase equity.

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