Is it cost effective to treat the world's poor?

Is it cost effective to treat the world's poor?

Is it cost effective to treat the world's poor?

Health and medicine explained.
July 17 2007 12:02 PM

Wrong Number

Is it cost effective to treat the world's poor?

Joseph Jeune before treatment. Click image to expand.
An HIV-infected boy in 2003 before drug treatments

Last month, I received a desperate e-mail from a former medical student of mine, now working in a remote Zambian medical clinic. A 3-year-old boy weighing only 15 pounds—about the same as a typical 6-month-old—was admitted to the never-empty malnutrition ward. The student found the boy's heart made a loud rushing noise instead of the usual lub-dub, indicating a serious malformation of the heart. Ruing the lack of surgical options, she asked, "[A]re there any inexpensive drugs we could give?" Sadly, I wrote back, there are none. Without heart surgery, the child almost certainly will die.

Pediatric heart surgery is fabulously expensive, often costing hundreds of thousands of dollars per case in the United States. Thus it would be foolhardy, goes the thinking, to offer surgery to poor African children who live on less than a few dollars per week. Isn't it better to invest in more cost-effective public-health measures, like mosquito netting to prevent malaria and vaccines against diarrhea? For decades, this kind of reasoning has been used to deny expensive but lifesaving treatments to the world's poor, most notably for HIV infection, in favor of more cost-effective measures focused on prevention. Dollar-for-dollar prevention is supposed to yield greater aggregate quality-of-life benefits than actual treatment.


Yet this seemingly reasonable argument is not only weak, but unfairly rigged, so the world's poor can never win.

The case against expensive treatments hinges on a statistic that economists use to compare medical interventions, called the "quality-adjusted life year." Here's how the sausage is made: How good a person feels is ranked on an arbitrary numeric scale and amortized over time. One QALY means the same thing as one year of perfect health, two years of half-perfect health, or four years of one-quarter perfect health. QALYs are an exchange unit that theoretically permits comparison between apples and oranges. Take a hypothetical example: pills that cost $200 for diabetics and give two years of half-normal health, versus a pancreas transplant that costs $5,000 and gives 10 years of one-fifth-normal health. The pills cost $200 per QALY, while the surgery costs $2,500 per QALY. If you believe that anyone really can tell half-normal health from one-fifth-normal health—and if you're a health economist, you probably do—the pills deserve funding more than the transplant.

Joseph Jeune after treatment. Click image to expand.
The same boy, holding his neice six months later, after drug treatments provided by Partners in Health

To ration care, a government or insurer determines how much a QALY is worth, and cuts health services with costs above where that line is drawn. This methodology hasn't really changed medical care in the United States because the threshold for QALY-based rationing is set high. In an unprecedented 1972 decision to fund a specific medical problem, Medicare began paying for kidney dialysis, which costs roughly $50,000 per QALY. In effect, this created a de facto cost-benefit threshold, and people have gamed the system ever since. It's not hard. As the British Medical Journal pointed out last year, most published studies of medical treatments in the United States find that all manner of medical treatments cost— voilà!—less than $50,000 per QALY. This also goes for HIV treatment in the United States. In 2001, for example, a group of Harvard researchers estimated in the New England Journal of Medicine that HIV medicines cost roughly $13,000 to $23,000 to give somebody a single QALY. The authors concluded the drug treatment for HIV was "highly cost effective and should be made available to all patients who can benefit from it."

What's easily affordable in rich countries, though, seems out-of-reach in poor ones where rationing thresholds are lower. Unfortunately, needy nations are stuck with figures conjured for countries where the ceiling is $50,000 per QALY. And the illusion of unaffordable treatment in poor areas is further bolstered by another insidious feature of QALY-based economics. In an experiment in the early 1990s, Oregon sought to ration health care by ranking all medical treatments, based on which yielded the most QALYs for the buck. Several odd findings emerged. Most notably, treatment of thumb-sucking and certain dental problems placed higher than treatment for cystic fibrosis and AIDS. Once these findings hit the media, Oregon abandoned the project and never rationed care.


What does thumb-sucking in Oregon have to do with AIDS in Africa? Oregon's experience showed how small improvements in huge numbers of relatively healthy young people (for example, millions of kids whose happiness is 1 percent higher since they don't thumb-suck, whatever that means) rack up QALYs faster than big improvements in a small number of really sick people (for example, a few dozen chronically ill folks with cystic fibrosis whose happiness is 10 percent higher from pricey antibiotics to treat their pneumonias). That's why—to economists, if to almost nobody else—it seemed fine to rank the treatment of thumb-sucking over cystic fibrosis, since it yielded the greatest overall QALY benefit.

With this logic, Africans with AIDS and expensive heart troubles never will qualify for life-saving drugs or surgeries. As the thumb-sucking example shows, QALYs dictate that paying for cheap preventive care will always win over expensive treatments, like those for AIDS. In 2002, the Lancet reviewed the medical literature and concluded that preventing HIV transmission to uninfected Africans (for example, via condoms distribution and education) was almost 1,000 times more cost-effective at generating QALYs than treating AIDS victims with expensive antiviral medications.

So, QALYs are unscientific, subject to powerful bias, recklessly applied out of context, and inherently biased toward prevention and away from treatment. But they make for devastating—and powerfully misleading—sound bites. The argument comes down to this: Doesn't it seem absurd to pay $23,000 to buy drugs to get one year of good health for an African with AIDS, when you can get the same amount of wellness for 1,000 Africans for the same cost?

But because they are based on retail prices of drugs and existing infrastructure in rich countries, such figures often overestimate costs for large-scale relief and treatment efforts in the developing world. The seeming high cost of treatment over cheaper prevention encourages inertia.


Enter physicians like Dr. Paul Farmer of the aid group Partners in Health, who endured all kinds of naysaying and began treating poor rural Haitians with antivirals for AIDS by getting donations from wealthy Western donors and buying the drugs outright at retail prices. They were tired of seeing HIV-infected people die. In late 2005, a revealing NewEnglandJournalofMedicine report proved that Haitians with AIDS—though living in impoverished conditions—were organized enough to handle all the drugs and did just as well medically as patients treated in the United States. Suddenly, treating AIDS in poor countries seemed possible.

And an obvious truth emerged: Health-care costs, upon which the entire pyramid of QALY-based analysis sits, are totally elastic and negotiable. As demand for the drugs in poor countries skyrocketed, countries like Thailand and India took advantage of their arcane patent laws and began manufacturing generic versions of the expensive drugs. When Brazil also threatened to allow generic manufacture of AIDS antivirals, drug companies rapidly negotiated local manufacturing licenses and deep discounts. Today, almost all 186,000 Brazilians needing AIDS drugs get them for free from the government.

In addition to the availability of generic drugs, collective bargaining has lowered costs. Consider this example of a 96 percent discount for a tuberculosis antibiotic. The lesson here is that one's economic paradigm powerfully influences what seems possible. Assessing AIDS treatment in poor countries with QALY-based economics is like desultorily asking, "We can't really afford this, can we?"

On the other hand, groups like Partners in Health take a radically different approach. They start with a goal—simply to save people with AIDS, and damn the QALYs—and invent ways to make it affordable.

Which brings me back to the Zambian child with the heart defect. In the end, spending hundreds of thousands of dollars for his heart surgery isn't a good QALY buy, if one is inclined to think in that erroneous way. But you can also think like Dr. Aldo Castaneda, the former chief of pediatric cardiac surgery at Harvard Medical School. At the height of his career in the 1990s, he moved to Guatemala to help found a children's heart center, and there has operated on thousands of children at a tiny fraction of the costs in America.

Recalling how people responded when he announced his intention to treat heart disease among poor Guatemalans, Casteneda says, "They told me that I was crazy." His patients, one can assume, disagree.