IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0186496.html
   My bibliography  Save this article

Revealed willingness-to-pay versus standard cost-effectiveness thresholds: Evidence from the South African HIV Investment Case

Author

Listed:
  • Gesine Meyer-Rath
  • Craig van Rensburg
  • Bruce Larson
  • Lise Jamieson
  • Sydney Rosen

Abstract

Background: The use of cost-effectiveness thresholds based on a country’s income per capita has been criticized for not being relevant to decision making, in particular in middle-income countries such as South Africa. The recent South African HIV Investment Case produced an alternative cost-effectiveness threshold for HIV prevention and treatment interventions based on estimates of life years saved and the country’s committed HIV budget. Methods: We analysed the optimal mix of HIV interventions over a baseline of the current HIV programme under the committed HIV budget for 2016–2018. We calculated the incremental cost-effectiveness ratio (ICER) as cost per life-year saved (LYS) of 16 HIV prevention and treatment interventions over 20 years (2016–2035). We iteratively evaluated the most cost effective option (defined by an intervention and its coverage) over a rolling baseline to which the more cost effective options had already been added, thereby allowing for diminishing marginal returns to interventions. We constrained the list of interventions to those whose combined cost was affordable under the current HIV budget. Costs are presented from the government perspective, unadjusted for inflation and undiscounted, in 2016 USD. Results: The current HIV budget of about $1.6 billion per year was sufficient to pay for the expansion of condom availability, medical male circumcision, universal treatment, and infant testing at 6 weeks to maximum coverage levels, while also implementing a social and behavior change mass media campaign with a message geared at increasing testing uptake and reducing the number of sexual partners. The combined ICER of this package of services was $547/ LYS. The ICER of the next intervention that was above the affordability threshold was $872/LYS. Conclusions: The results of the South African HIV Investment Case point to an HIV cost-effectiveness threshold based on affordability under the current budget of $547–872 per life year saved, a small fraction of the country’s GDP per capita of about $6,000.

Suggested Citation

  • Gesine Meyer-Rath & Craig van Rensburg & Bruce Larson & Lise Jamieson & Sydney Rosen, 2017. "Revealed willingness-to-pay versus standard cost-effectiveness thresholds: Evidence from the South African HIV Investment Case," PLOS ONE, Public Library of Science, vol. 12(10), pages 1-9, October.
    • Handle: RePEc:plo:pone00:0186496
    DOI: 10.1371/journal.pone.0186496
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0186496
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0186496&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0186496?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Paul Revill & Jessica Ochalek & James Lomas & Ryota Nakamura & Beth Woods & Alexandra Rollinger & Marc Suhrcke & Mark Sculpher & Karl Claxton & Peter Berman, 2020. "Cost-Effectiveness Thresholds: Guiding Health Care Spending for Population Health Improvement," World Scientific Book Chapters, in: Paul Revill & Marc Suhrcke & Rodrigo Moreno-Serra & Mark Sculpher (ed.), Global Health Economics Shaping Health Policy in Low- and Middle-Income Countries, chapter 3, pages 75-97, World Scientific Publishing Co. Pte. Ltd..
    2. Samuel Shillcutt & Damian Walker & Catherine Goodman & Anne Mills, 2009. "Cost Effectiveness in Low- and Middle-Income Countries," PharmacoEconomics, Springer, vol. 27(11), pages 903-917, November.
    3. Viscusi, W Kip, 1993. "The Value of Risks to Life and Health," Journal of Economic Literature, American Economic Association, vol. 31(4), pages 1912-1946, December.
    4. Jessica Ochalek & Karl Claxton & Paul Revill & Mark Sculpher & Alexandra Rollinger, 2016. "Supporting the development of an essential health package: principles and initial assessment for Malawi," Working Papers 136cherp, Centre for Health Economics, University of York.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krishna P. Reddy & Kieran P. Fitzmaurice & Justine A. Scott & Guy Harling & Richard J. Lessells & Christopher Panella & Fatma M. Shebl & Kenneth A. Freedberg & Mark J. Siedner, 2021. "Clinical outcomes and cost-effectiveness of COVID-19 vaccination in South Africa," Nature Communications, Nature, vol. 12(1), pages 1-10, December.
    2. Caitlin M Dugdale & Tamsin K Phillips & Landon Myer & Emily P Hyle & Kirsty Brittain & Kenneth A Freedberg & Lucy Cunnama & Rochelle P Walensky & Allison Zerbe & Milton C Weinstein & Elaine J Abrams &, 2019. "Cost-effectiveness of integrating postpartum antiretroviral therapy and infant care into maternal & child health services in South Africa," PLOS ONE, Public Library of Science, vol. 14(11), pages 1-18, November.
    3. Jacob Bor & Anna Gage & Dorina Onoya & Mhairi Maskew & Yorghos Tripodis & Matthew P Fox & Adrian Puren & Sergio Carmona & Koleka Mlisana & William MacLeod, 2021. "Variation in HIV care and treatment outcomes by facility in South Africa, 2011–2015: A cohort study," PLOS Medicine, Public Library of Science, vol. 18(3), pages 1-18, March.
    4. Nicola Foster & Lucy Cunnama & Kerrigan McCarthy & Lebogang Ramma & Mariana Siapka & Edina Sinanovic & Gavin Churchyard & Katherine Fielding & Alison D Grant & Susan Cleary, 2021. "Strengthening health systems to improve the value of tuberculosis diagnostics in South Africa: A cost and cost-effectiveness analysis," PLOS ONE, Public Library of Science, vol. 16(5), pages 1-21, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. François Gardes, 2021. "On the value of time and human life," Documents de travail du Centre d'Economie de la Sorbonne 21023, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    2. Elizabeth T Cafiero-Fonseca & Andrew Stawasz & Sydney T Johnson & Reiko Sato & David E Bloom, 2017. "The full benefits of adult pneumococcal vaccination: A systematic review," PLOS ONE, Public Library of Science, vol. 12(10), pages 1-23, October.
    3. Marcela Parada-Contzen & Andrés Riquelme-Won & Felipe Vasquez-Lavin, 2013. "The value of a statistical life in Chile," Empirical Economics, Springer, vol. 45(3), pages 1073-1087, December.
    4. Forkenbrock, David J., 1999. "External costs of intercity truck freight transportation," Transportation Research Part A: Policy and Practice, Elsevier, vol. 33(7-8), pages 505-526.
    5. Ryan Edwards, 2013. "The cost of uncertain life span," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1485-1522, October.
    6. Svetlana Pashchenko & Ponpoje (Poe) Porapakkarm & Mariacristina De Nardi, 2017. "The Lifetime Costs of Bad Health," 2017 Meeting Papers 533, Society for Economic Dynamics.
    7. Becker, Gary S. & Rubinstein, Yona, 2011. "Fear and the response to terrorism: an economic analysis," LSE Research Online Documents on Economics 121740, London School of Economics and Political Science, LSE Library.
    8. Nikolaos Georgantzis & Efi Vasileiou, 2014. "Are Dangerous Jobs Paid Better? European Evidence," Research in Labor Economics, in: New Analyses of Worker Well-Being, volume 38, pages 163-192, Emerald Group Publishing Limited.
    9. Joseph Findlay & Caleb Piche-Larocque & Akhter Faroque, 2022. "Cost Estimation and Health Benefits Determinants of Medical Innovations Across Canadian Provinces," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 14(9), pages 1-25, September.
    10. Friedrich Breyer & Stefan Felder, 2002. "The Dead-Anyway Effect Revis(it)ed," Discussion Papers of DIW Berlin 302, DIW Berlin, German Institute for Economic Research.
    11. Orley Ashenfelter & Michael Greenstone, 2004. "Estimating the Value of a Statistical Life: The Importance of Omitted Variables and Publication Bias," American Economic Review, American Economic Association, vol. 94(2), pages 454-460, May.
    12. Richard A. Epstein, 2008. "The Human and Economic Dimensions of Altruism: The Case of Organ Transplantation," The Journal of Legal Studies, University of Chicago Press, vol. 37(2), pages 459-501, June.
    13. Farzin, Y. Hossein & Akao, Ken-Ichi, 2005. "Non-pecuniary Work Incentive and Labor Supply," Working Papers 190910, University of California, Davis, Department of Agricultural and Resource Economics.
    14. Buzby, Jean C. & Ready, Richard C. & Skees, Jerry R., 1995. "Contingent Valuation in Food Policy Analysis: A Case Study of a Pesticide-Residue Risk Reduction," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 27(2), pages 613-625, December.
    15. Groot, Wim & Maassen van den Brink, Henriette, 2007. "The health effects of education," Economics of Education Review, Elsevier, vol. 26(2), pages 186-200, April.
    16. Johannesson, Magnus & Johansson, Per-Olov, 1996. "The economics of ageing: on the attitude of Swedish people to the distribution of health care resources between the young and the old," Health Policy, Elsevier, vol. 37(3), pages 153-161, September.
    17. Laura A. Bakkensen & Robert O. Mendelsohn, 2016. "Risk and Adaptation: Evidence from Global Hurricane Damages and Fatalities," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(3), pages 555-587.
    18. Chen, Keith & Lange, Fabian, 2008. "Education, Information, and Improved Health: Evidence from Breast Cancer Screening," IZA Discussion Papers 3548, Institute of Labor Economics (IZA).
    19. James Hines & Hilary Hoynes & Alan Krueger, 2001. "Another Look at Whether a Rising Tide Lifts All Boats," Working Papers 833, Princeton University, Department of Economics, Industrial Relations Section..
    20. Gibson, John & Barns, Sandra & Cameron, Michael & Lim, Steven & Scrimgeour, Frank & Tressler, John, 2007. "The Value of Statistical Life and the Economics of Landmine Clearance in Developing Countries," World Development, Elsevier, vol. 35(3), pages 512-531, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0186496. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.