1. Role of Referral Hospitals DCP2 workshop Tanzania 21-23 August Max Price Martin Hensher Sarah Ademakoh

2. What are we talking about? Almost all levels are referral Almost all levels are referral Tertiary – Specialist, sub-specialist, high cost Tertiary – Specialist, sub-specialist, high cost Size – 300 to 1500+ Size – 300 to 1500+ Academic – Academic – Linked to Faculty of Health Sciences Linked to Faculty of Health Sciences Teaching Teaching Research Research Outreach Outreach Support Support Inconsistency in National Accounts Inconsistency in National Accounts

3. Debate: What value  What resources? LESS Consume too large a share of budget Consume too large a share of budget Benefit very few Benefit very few Urban bias Urban bias Middle class bias Middle class bias Don’t address major public health problems Don’t address major public health problems MORE Then why do we continue to spend on RH? Politics? Power of Drs? Or Rational basis Cost-benefit is positive Need referral system Training needs Indirect benefits

4. Cost-Benefit/Utility Analysis approach to Resource Allocation Analyse QALYs for each intervention Analyse QALYs for each intervention Particularly favours childhood interventions, preventive care, PHC Particularly favours childhood interventions, preventive care, PHC Other ways of valuing benefits Other ways of valuing benefits e.g. willingness-to-pay, human capital approach e.g. willingness-to-pay, human capital approach Rank all interventions – most to least cost effective Rank all interventions – most to least cost effective Aggregate to budget limit Aggregate to budget limit Therefore – minimal tertiary care! Therefore – minimal tertiary care!

5. Can Cost/QALY Analysis be applied to referral hospitals? Complex economies of scope and scale Complex economies of scope and scale Multiple outputs – indirect contribution to QALYs Multiple outputs – indirect contribution to QALYs Training health workers, specialists Training health workers, specialists Referral and support to lower levels Referral and support to lower levels Research, piloting technologies and interventions Research, piloting technologies and interventions Quality assurance throughout hospital system Quality assurance throughout hospital system Countering brain drain from public sector and country Countering brain drain from public sector and country Fails to capture critical dimension of utility and social welfare Fails to capture critical dimension of utility and social welfare

6. Theory of ‘Peace of Mind’ e.g. Kidney transplant service Actual no. of patients benefiting = few hundred a year  High cost per QALY, low public health impact Actual no. of patients benefiting = few hundred a year  High cost per QALY, low public health impact BUT, in principle, whole pop (millions) benefit BUT, in principle, whole pop (millions) benefit Reassured that available if needed Reassured that available if needed Willing to pay cf. insurance Willing to pay cf. insurance Social Welfare, aggregate utility high Social Welfare, aggregate utility high Paradox: The more expensive the intervention, and the rarer the disease, the higher the aggregate benefit-cost ratio Paradox: The more expensive the intervention, and the rarer the disease, the higher the aggregate benefit-cost ratio

7. Indirect benefits Referral and support Referral and support Quality Assurance in hospitals Quality Assurance in hospitals Training Training Research Research Emergency care Emergency care Public confidence in the health system Public confidence in the health system Foreign confidence – investors, tourism, 2010 Foreign confidence – investors, tourism, 2010 Economic benefits Economic benefits Question: Should this be left to Private Sector? Question: Should this be left to Private Sector?

8. General Guidelines Linked to per capita GDP Linked to per capita GDP Linked to level of Health Service Development Linked to level of Health Service Development Availability of specialised personnel Availability of specialised personnel Balance – will always need some referral and tertiary – but how much? Balance – will always need some referral and tertiary – but how much? Population size, density, distance between main centres Population size, density, distance between main centres Demographic and epidemiologic transition Demographic and epidemiologic transition Ensure adequate referral system and gatekeeping to ensure equitable access – this usually means more investment in Urban services! Ensure adequate referral system and gatekeeping to ensure equitable access – this usually means more investment in Urban services! Provide enough resources to do outreach, quality assurance, support Provide enough resources to do outreach, quality assurance, support