GLOBAL THINKING                                   

 Read the article on " Value for Money: An Agenda for Global Health Funding Agencies" by Center for Global Development (CGD).  It is an important discussion on efficient use of scarce resources. (

 Long lasting insectide treated bed nets for Malaria: 

Results for Development (R4D) outlined certain market dynamics strategies that will save the global community $600 million over 5 years and this saving can finance bed nets to protect additional 300million people.



A OECD health policy report indicates cost efficiencies in health care systems through better use of information and communication technologies.  While the study covers developed countries, many of the findings are equally applicable to developing world.

ICT implementation can benefit: (i) quality of care and efficient service delivery; (2) reduction in operating costs of clinical services; (3) lowering administrative/overhead costs; (4) introducing entirely new modes of care.



A 1999 study of Mexico’s Ministry of Health family planning program indicated that the program was spending $29 per person per year on contraceptive services.  The study recommended that the system can be made more efficient by increasing more contraceptive protection at each visit (i.e. provide more condoms or pills), increasing the proportion of time provider spends with the clients during each visit, thus reducing the number of visits, and increasing the length of provider’s workday.  These measures would allow the Ministry to provide services to more people without increasing costs.



Efficiency gains through smarter transportation and pooled procurement:


Anti-retroviral drugs for HIV/AIDS patients:

By improving selection of existing ARVs, we can save over $85million over 5 years and up to $200 million through accelerated introduction of potential new first-line ARVs, with no reduction – but potential increases – in clinical benefits.   The report from R4D has other suggestions for efficiencies and reduction in total costs.(



Comparative Cost-Effectiveness Analysis to Inform Policy in Developing Countries:

A General Framework with Applications for Education: Iqbal Dhaliwal, Esther Duflo, Rachel Glennerster, Caitlin Tulloch1; Abdul Latif Jameel Poverty Action Lab (J-PAL), MIT

This is a paper that discusses ‘how comparative cost-effectiveness analyses can help inform policy in developing countries and the underlying methodological assumptions necessary for performing this kind of analysis using data gathered as part of rigorous impact evaluations. This paper does not suggest a single set of “correct” assumptions, because the assumptions adopted in a cost-effectiveness analysis should reflect the perspective of the intended user.’ The paper also defines cost-effective analysis and why it is an important tool. ‘Cost-effectiveness analysis, in the simplest terms, calculates the ratio of the amount of “effect” a program achieves for a given amount of cost incurred, or conversely the amount of cost required to achieve a given impact. For program evaluation, this means measuring the impact of a program in achieving a given policy goal (for example, the extra years of schooling induced) against the cost of the program. This ratio, when calculated for a range of alternative programs addressing the same policy goal, conveys the relative impacts and costs of these programs in an easy and intuitive way.”  It is important to quantify program impacts in a standard manner and also decide which costs should be included. See the link for the full report:


Better drug use, greater efficiency, Amanda Glassman's blog in Center for Global Development.  Responsible use of medicines can bring more efficiencies, as indicated by IMS Institute study.


Efficiency measures in Malaria programs


Value for Money case studies of International HIV/AIDS Alliance:

Value for Money in Norway looks at reforms that are aimed at improving the quality of services (more value) and efficiency (less money) in central government:

Value for Money: New Zealand Aid Programme:



Calculating efficiency measures must reflect true costs of care, evidence-based, adjusted for risks, comparability, within certain period,  detailed verifiable costing, and take into account contextual factors.   

Managers sometimes use a tool called Cost-effectiveness analysis (CEA) in deciding efficiency of allocation of resources but such decisions are considered alongside other types of information.  Certain assumptions normally are used during such CEA analysis such as usage rate, inflation,  capacity utilisation, political and economic situations, etc. It is important that our work be guided by certain acceptable definitions.  The following definitions have been taken from international sources.Definitions:

Efficiency: The Development Assistance Committee of the Organisation for Economic Co-operation and Development (OECD DAC) defines efficiency as ‘a measure of how economically resources/inputs (funds, expertise, etc) are  converted to result’. It is also getting the most out of the resources used. Efficiency  is a broader concept focusing on both benefits and costs: a set of actions is “efficient” if it maximizes total net benefits (where “net benefits” are benefits minus costs). The resources can be time or expertise, but are most commonly financial or economic. Results can be outputs or impacts, but efficiency is also sometimes assessed on the basis of outreach and activities (e.g. cost per training or cost per beneficiaries).

Effectiveness: Effectiveness is “the extent to which the development intervention’s objectives were achieved, or are expected to be achieved, taking into account their relative importance”. Effectiveness aims to analyse the achievement of an operation’s development objectives, whereas the analysis of efficiency entails assessing the resources used and results achieved.

Cost-effectiveness: Cost-effectiveness is a concept that focuses on costs: a set of actions is “cost-effective” if it minimizes costs in achieving a stated goal.

Cost-benefit analysis: Cost-benefit analysis is a method of reaching economic decisions by comparing the costs of doing something with its benefits (Economics A-Z, by The Economist).    More specifically, cost-benefit analysis is a basic tool of economic analysis in which the actual and potential costs (both private and social) of various economic decisions are weighed against actual and potential private and social benefits. Those decisions or projects yielding the highest benefit/cost ration are usually thought to be most desirable (Economic Development in the Third World (4th edition) by Michael Todaro)

Economic Definitions (source: Pay for Performance in Health Care: Methods and Approaches, RTI study;

Health economists sometimes differentiate between three types of efficiency: technical efficiency, productive efficiency, and allocative efficiency (Palmer & Torgerson, 1999; Varian, 1992).

Technical efficiency refers to the physical relation between physical inputs and outputs (in which outputs can be health care services or health outcomes). Technical efficiency is achieved when the level of output is maximized from a given set of physical inputs, but it cannot be used to compare alternative interventions, for example, in which one intervention produces the same output with less of one resource and more of  another.

Productive efficiency refers to either the maximization of output for a given cost or the minimization of cost for a given level of output (note that when outputs are defined as health care services, then productive efficiency is equivalent to cost efficiency). Productive efficiency permits assessment of relative value for interventions with directly comparable outputs. It cannot, however, address the impact of reallocating resources at a broader level.

Allocative efficiency accounts for both productive efficiency and the efficiency of output distributed across the community. This type of efficiency occurs when resources are allocated to maximize the welfare of the community. Allocative efficiency implies productive efficiency, which in turn implies technical efficiency.


Strategic purchasing:






Make a free website with Yola