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COMMENTARY |
The authors are with the Department of Epidemiology and Public Health, Yale University School of Medicine, New Haven, Conn. Edward H. Kaplan is also with the Yale University School of Management, New Haven, Conn. Both were members of the Institute of Medicine’s Committee on HIV Prevention Strategies in the United States.
Correspondence: Requests for reprints should be sent to Edward H. Kaplan, PhD, Yale University School of Management, PO Box 208200, New Haven, CT 06520–8200 (e-mail: edward.kaplan{at}yale.edu).
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ABSTRACT |
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 TOP ABSTRACT INTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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The primary goal of HIV prevention is to prevent as many infections as possible. This requires allocating HIV-prevention resources according to costeffectiveness principles: those activities that prevent more infections per dollar are favored over those that prevent fewer. This is not current practice in the United States, where prevention resources from the federal government to the states flow in proportion to reported AIDS cases.
Although such allocations might be considered equitable, more infections could be prevented for the same expenditures were cost-effectiveness principles invoked. The downside of pure cost-effective allocations is that they violate common norms of equity. In this article, we argue for a middle ground that promotes both equity and efficiency in allocating federal HIV-prevention resources.
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INTRODUCTION |
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TOPABSTRACTINTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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Many view the allocation of HIV-prevention resources principally as a political issue. Community-based organizations, advocacy groups, state health departments, and other stakeholders clamor for their fair share of the federal HIVprevention pie. Indeed, the existing federal allocation processes (for example, HIV-prevention community planning) and funding outcomes (for example, funding proportional to AIDS cases) are consistent with the view that fair division, and not cost-effectiveness, is the predominant concern in allocating HIV-prevention resources.
We do not deny that equity and fairness are important considerations that must be factored into any resource allocation process. However, it is not often realized that the choices of which, and at what levels, HIV interventions will be funded have important consequences for the overall success of the national HIVprevention effort. Changing the way that available HIV-prevention dollars are allocated across different activities can have an even greater impact than increasing the overall level of spending on prevention. Viewed in this light, it is clear that the nation pays a price
measured in infections that could be averted but are notfor maintaining our current approach to resource allocation for HIV prevention.
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PROPORTIONAL ALLOCATION AND EQUITY |
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TOPABSTRACTINTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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for fiscal year 1997). In the figure, each point corresponds to a different state. For each order-of-magnitude increase in the number of newly reported AIDS cases, there is a corresponding order-of-magnitude increase in the amount of prevention funds awarded.
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Some would argue that proportional allocation is fair, in that HIV-prevention dollars awarded per AIDS case are roughly the same across the states. We would argue, however, that state health departments should be rewarded for preventing new HIV infections as opposed to reporting AIDS cases. Perversely, under proportional allocation, state health departments fielding successful interventions that lead to reductions in HIV infections—and, ultimately, in AIDS cases—would lose funds, while health departments with ineffective programs that lead to the continued spread of HIV and AIDS would gain resources.
There are other objections to this proportional allocation pattern. For one example, AIDS cases are the result of past infections, while new infections can be prevented in the future—this renders AIDS case reports a questionable index for allocating prevention dollars. More problematic, however, is the fact that the existing approach ignores the differential cost-effectiveness of competing HIV-prevention interventions. Since the number of infections that can be averted is the product of the HIV incidence rate absent intervention and the fraction of new infections that can be prevented at a given expenditure level, ignoring the cost-effectiveness of prevention activities when allocating resources is untenable.
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COST-EFFECTIVE ALLOCATION AND EFFICIENCY |
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TOPABSTRACTINTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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Rather than attempt to model HIV incidence rates directly, the committee employed 1996 estimates of annual new HIV infection rates in 3 risk groups—men who have sex with men, drug injectors, and heterosexuals at high risk—in each of the 96 metropolitan statistical areas in the United States with populations over 500 000.2 Despite the imperfections of these estimates,3 they were (and remain) the only figures sufficiently disaggregated for examining the implications of resource allocation patterns such as that shown in Figure 1
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To estimate the effectiveness of HIV intervention programs serving the 3 risk groups identified above, the committee reviewed the HIV-prevention literature. HIV interventions for each group were characterized initially by 2 key measures: the average cost per program participant and the percentage reduction in HIV incidence that could be expected among program participants. From this review, the committee developed 3 scenarios—base case, optimistic, and pessimistic—for each risk group. The base-case scenario reflected average program effectiveness in reducing the rate of new infections and average costs per program participant. The optimistic scenario combined above-average program effectiveness with below-average costs, while the pessimistic scenario combined below-average effectiveness with above-average costs. In addition to cost and effectiveness measures, the committee noted that most HIV-prevention studies report at least some degree of client dropout; at times, these rates are appreciably high. This led the committee to impose constraints restricting the maximum fraction of the population at risk that could be retained by HIV interventions irrespective of expenditures. These constraints were set to 25%, 50%, and 75% for the pessimistic, base-case, and optimistic scenarios, respectively.
The resulting model took the form of a linear program (the mathematical details appear in Appendix D of the IOM report1). As a function of the HIV-prevention budget, the model suggests the amount of money to allocate to prevention programs serving different risk groups in different states to prevent as many new infections as possible. The committee also estimated, as a function of the budget, the effectiveness of proportional allocation in preventing infections. The analysis suggested that at current budget levels (the CDC spent roughly $412 million in 1999 on HIV-prevention interventions as detailed in Appendix C of the IOM report1), the estimated annual number of infections prevented by federally sponsored interventions could be increased by at least 30% beyond what is achieved with proportional allocation. The price paid for adhering to proportional allocation thus equals this 30% improvement, which translates to 900 infections annually in the IOM example. To achieve this same 30% increase in effectiveness with proportional allocation would require increasing the prevention intervention budget from $412 million to more than $700 million, which is another way of viewing the inefficiency of the current approach. Costeffective allocation retained at least a 30% edge compared with proportional allocation for annual budgets of $500 million or less in both the base-case and pessimistic scenarios.
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BALANCING EFFICIENCY AND EQUITY |
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TOPABSTRACTINTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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What we are faced with is a tradeoff between efficiency and equity in HIV prevention. Proportional allocation represents the equity extreme of this tradeoff, whereby cost-effectiveness is completely ignored. Cost-effective allocation represents the efficiency extreme, whereby equity receives no weight. We propose here an intermediate solution that promotes the best features of both approaches and enables one to view the equity–efficiency tradeoff inherent in this resource allocation problem.
Our proposal is that all risk groups currently receiving federally funded intervention services continue to do so through the proportional allocation of some fraction of the total budget in accordance with current practice. This fraction would be earmarked for proportional allocation. The remaining funds, which we term discretionary, would be allocated in accordance with the principles of cost-effectiveness.
The performance of this proposal is illustrated in Figure 2, which was derived from the same base-case model and data employed in the IOM report. The vertical axis reports the estimated number of HIV infections averted annually by federally sponsored prevention activities. The horizontal axis reports the fraction of the $412 million prevention budget that is earmarked for proportional allocation. The curve thus illustrates the decline in the annual number of HIV infections prevented as the amount of funds earmarked for proportional allocation increases.
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The IOM committee stated, and we concur, that allocation decisions regarding HIV-prevention resources represent the single most important set of HIVprevention decisions made. We believe that it is possible to prevent more infections while preserving an acceptable degree of equity and fairness in allocation outcomes. Perhaps more important is that all concerned with HIVprevention policy recognize the centrality of resource allocation in HIV-prevention policy. Resource allocation is not simply an argument for how to divide the pie; some allocations are arguably better than others. We encourage analysis, debate, and discussion with the hope of converging on federal and state allocation plans that are both effective and fair.
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Acknowledgments |
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Footnotes |
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Accepted for publication January 31, 2002.
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References |
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TOPABSTRACTINTRODUCTIONPROPORTIONAL ALLOCATION AND...COST-EFFECTIVE ALLOCATION AND...BALANCING EFFICIENCY AND EQUITYReferences |
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2. Holmberg SD. The estimated prevalence and incidence of HIV in 96 large US metropolitan areas. Am J Public Health. 1996;86:642–654.
3. Samuel MC, Osmond DE. Uncertainties in the estimation of HIV prevalence and incidence in the United States. Am J Public Health. 1996;86:627–628.
This article has been cited by other articles:
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  G. S. Zaric and M. L. Brandeau A Little Planning Goes a Long Way: Multilevel Allocation of HIV Prevention Resources Med Decis Making, January 1, 2007; 27(1): 71 - 81. [Abstract] [PDF]
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