Pan American Progress on Priority Setting in Health Strengthened Network Meets Needs Set Out in Center for Global Development Report

October 16, 2012
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Nancy BirdsallThe Pan American Health Organization (PAHO) is moving to tackle one of the most difficult and important challenges of health policy: strengthening regional mechanisms for assessing which health technologies are cost effective and therefore appropriate for public funding. It’s a sensitive issue that vexes poor and rich countries alike—including the United States.

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A recent PAHO resolution signed by the United States, Canada, and countries in Latin America and the Caribbean will strengthen a network created last year to improve the quality of Health Technology Assessment (HTA) studies and their use in the allocation of public budgets. The improved network would address problems identified in a working group report from the Center for Global Development (CGD) that urges the creation and strengthening of national and regional priority-setting institutions to improve the effectiveness of public spending on health.

The PAHO resolution to strengthen the Health Technology Assessment Network of the Americas (RedETSA), signed two weeks ago, will be celebrated on October 23 at the US launch of the CGD working group report, Priority-Setting in Health: Building Institutions for Smarter Public Spending. Speakers will include the president of the US Institute of Medicine, Dr. Harvey Fineberg; the director of the Pan American Health Organization, Dr. Mirta Roses Periago; and Amanda Glassman, director of global health policy and senior fellow at CGD.

The CGD report shows that global health donors and both developed and developing countries could greatly reduce suffering from ill-health and save many more lives—and often money, too—by taking into account the cost-effectiveness of health interventions to better allocate healthcare funds. RedETSA aims to do just that.

“This is critically important work,” says Dr. Fineberg. “Poor and rich countries alike are faced with the challenge of allocating finite resources across a range of national priorities, new and existing technologies, and unmet need. Yet, health spending decisions often fail to take account of the costs and benefits of health interventions, and of the opportunity to reduce waste, and the result is less health than could be attained with the available resources.”

The CGD report calls for creating or strengthening national or regional HTA facilities to share know-how in areas such as economic evaluation, budget impact analysis, and deliberative processes for priority-setting.

It shows that regional institutions can help countries avoid repeating health technology assessments already done by others, instead pooling resources to carry out joint evaluations. The findings can then be made available to participating countries for deliberation and possible use in allocation decisions. The PAHO resolution provides the framework for this type of cooperation. Member countries may use the results in allocating healthcare funds but they are not required to do so.

“Using cost-effectiveness data in allocating healthcare funds shouldn’t be controversial. It’s a no-brainer,” says CGD’s Glassman.

“Without priority-setting institutions, countries face impossible situations, like the recent case in Brazil where a man successfully sued the government to pay for medicine that costs $440,000 per year. Just imagine how much more beneficial that money could have been had it been spent on eliminating the neglected tropical diseases that still afflict the poor in Brazil,” she adds.

“I’m delighted that PAHO members have agreed to strengthen  this important network and that the US has demonstrated support,” Glassman says. “This can serve as an example for regional networks in other parts of the world.”  

While the need for health technology assessment can seem straightforward, efforts to create institutions to do this work have sometimes been politically explosive. A proposal to include such assessments in the US healthcare reform legislation in 2008 sparked unfounded allegations that the government was moving to create “death panels.”

The legislation that eventually passed, the Patient Protection and Affordable Care Act, aims to control healthcare costs. But the organization established to evaluate health interventions, the Patient-Centered Outcomes Research Institute (PCORI), is instructed to consider only whether a specific treatment works. The law prohibits it from evaluating cost-effectiveness and using measures such as “dollars per quality-adjusted life year,” commonly used in global health circles to assess the value of healthcare interventions.

Although the US has signed the resolution and voiced its support, it has yet to identify an institution that will be actively involved in the network. Still, Glassman welcome US participation as a step in the right direction.

“US participation in RedETSA is good for the network and its developing country members, because of the vast wealth of medical knowledge we have in this country,” says Glassman. “And it’s good for the United States, too. I hope that the cost-effectiveness knowledge generated within the network can eventually be tapped to help improve health outcomes here at home.”

The CGD working group report, Priority-Setting for Health: Building Institutions for Smarter Public Spending, is available on the CGD website.

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The Center for Global Development: CGD works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for all people. As a nimble, independent, nonpartisan, and nonprofit think tank, focused on improving the policies and practices of the rich and powerful, the Center combines world-class scholarly research with policy analysis and innovative outreach and communications to turn ideas into action.