Using economic analysis to inform health resource allocation: lessons from Malawi

Abstract

Despite making remarkable strides in improving health outcomes, Malawi faces concerns about sustaining the progress achieved due to limited fiscal space and donor dependency. The imperative for efficient health spending becomes evident, necessitating strategic allocation of resources to areas with the greatest impact on mortality and morbidity. Health benefits packages hold promise in supporting efficient resource allocation. However, despite defining these packages over the last two decades, their development and implementation have posed significant challenges for Malawi. In response, the Malawian government, in collaboration with the Thanzi la Onse Programme, has developed a set of tools and frameworks, primarily based on cost-effectiveness analysis, to guide the design of health benefits packages likely to achieve national health objectives. This review provides an overview of these tools and frameworks, accompanied by other related analyses, aiming to better align health financing with health benefits package prioritization. The paper is organized around five key policy questions facing decision-makers: (i) What interventions should the health system deliver? (ii) How should resources be allocated geographically? (iii) How should investments in health system inputs be prioritized? (iv) How should equity considerations be incorporated into resource allocation decisions? and (v) How should evidence generation be prioritized to support resource allocation decisions (guiding research)? The tools and frameworks presented here are intended to be compatible for use in diverse and often complex healthcare systems across Africa, supporting the health resource allocation process as countries pursue Universal Health Coverage.

Keywords: Cost-effectiveness analysis; Health benefits packages; Health efficiency; Malawi; Prioritization; Resource allocation.

Fig. 1

This figure represents a real case study example illustrating how net health benefit can inform the scale of HBP. We selected six interventions from Malawi's EHP, each with varying net health benefits and costs. Based on Malawi’s health opportunity cost of $61 (2015) per DALY averted, interventions on essential newborn care, labour and delivery management, prevention of mother to child transmission (PMTCT-HIV), and first line treatment for retreatment of TB cases (adults), can be included in the EHP as they generate positive net benefits, while interventions on depression treatment and hypertension shouldn’t as they yield negative health benefits. The budget line shows the cumulative spending limit for interventions included in the EHP; exceeding it results in a decline in overall population health. We recognise that the cost-effectiveness database used for developing the EHP (2017) has undergone significant updates since the original publication [12]. With newer evidence available, future decisions regarding the inclusion or exclusion of interventions could be influenced. ^ Hypertension and depression are real and growing problems in Malawi healthcare system especially at primary and secondary levels of care. The Ministry of Health continues to explore ways to provide services for these conditions cost effectively. * PMTCT intervention refers to Option B, a CD4-count based PMTCT program. However, in late-2011, Malawi pioneered the Option B + , a modification of the WHO Option B, which was designed to offer all pregnant and breastfeeding women free lifelong ART at diagnosis, regardless of CD4 count or clinical stage. Subsequently, since 2015, option B + was subsumed in the policy of initiation of ART in all people with diagnosed HIV regardless of CD4 count. Cost effectiveness evidence on this emerged after this research was published. The future EHP revision process should incorporate this new evidence, as it aligns with Malawi's treatment guidelines

Fig. 2

This figure represents the percentage shifts in district allocation from current to EHP need-based formulas

Fig. 3

This figure presents the net benefits (obtained as direct effects net of opportunity costs) according to the perspective of each of the stakeholders involved in Malawi’s SCTP