Health Gains and Financial Risk Protection Afforded by Treatment and Prevention of Diarrhea and Pneumonia in Ethiopia: An Extended Cost-Effectiveness Analysis

Universal health coverage (UHC) continues to receive considerable attention from the global health community. UHC was the main topic of the 2010 World Health Report (WHO 2010), the main topic in 2012 issues of The Lancet (2012) and Health Policy and Planning (McIntyre and Mills 2012), and the theme of the Second Global Symposium on Health Systems Research in Beijing in 2012. Margaret Chan, Director-General of the World Health Organization (WHO), stated that “universal health coverage [is] the single most powerful concept that public health has to offer” (Chan 2012). This continued attention led to the 2013 World Health Report, which discusses the role that research can play in answering important questions about UHC (WHO 2013).Although substantial variation is a hallmark of UHC initiatives, UHC is generally viewed along three dimensions: who is covered, what services are covered, and the proportion of the costs that are covered (WHO 2010). One financing option, universal public finance (UPF), involves the government shouldering the entire cost of specific services, regardless of who receives them. The potential benefits of UPF include improved health outcomes and improved financial risk protection (FRP). However, the evidence available to policy makers is limited with respect to the magnitude and distribution of these benefits.Extended cost-effectiveness analysis (ECEA) (Verguet, Gauvreau, and others 2015; Verguet and Jamison 2015; Verguet, Laxminarayan, and Jamison 2015; Verguet, Olson, and others 2015; Verguet and others 2013) provides a tool with which to gain a more complete understanding of the health and financial benefits associated with different health policies and interventions. ECEA combines the traditional health system perspective of cost-effectiveness analysis (CEA) with the patient perspective, notably through the quantification of the benefits associated with avoiding medical impoverishment and the assessment of the distributional consequences, that is equity, of policies (Verguet, Laxminarayan, and Jamison 2015). This tool helps policy makers make decisions based on the joint benefits and tradeoffs associated with different policies and interventions, specifically in health gains, FRP and equity benefits.In 2013 in Ethiopia, about 60,000 children under age five years died as a result of pneumonia or diarrhea, the fifth-highest absolute level worldwide (IVAC 2013). Studies have associated the incidence of both conditions with socioeconomic status (Fekadu, Terefe, and Alemie 2014; Mihrete, Alemie, and Teferra 2014), suggesting that an evaluation of the impact of prevention and treatment services by income quintile would be suitable.This chapter uses ECEA methods to examine UPF of the prevention and treatment of pneumonia and diarrhea in Ethiopia, with a focus on children under age five years. The combination of prevention and treatment options illustrates health and FRP benefits brought by the different intervention packages available to decision makers. This analysis also examines these benefits by income quintile so that policy makers can better understand how each package affects different segments of the population—a critical element of UHC. A 20 percentage point increase in coverage is modeled. Our purpose is to expose with simplicity the broad implications for policy makers rather than to provide them with definitive estimates, hence the presentation of limited rudimentary sensitivity analyses. After we summarize current child health services in Ethiopia, we outline the methods used in this chapter, which draw from the ECEA methodology (Verguet, Laxminarayan, and Jamison 2015). Then, we present results—both health and financial protection—for the following:Finally, we discuss the implications of the findings and conclude.