This paper uses contract theory to suggest simple contract designs that could be used by the Global Fund. Using a basic model of procurement, we lay out five alternative options and consider when each is likely to be most appropriate. We ultimately provide a synthesis to guide policy makers as to when and how 'results-based' incentive contracts can be used in practice.
Global Health Donors Viewed as Regulators of Monopolistic Service Providers: Lessons from Regulatory Literature - Working Paper 424
Controlling healthcare costs while promoting maximum health impact in the recipient countries is one the biggest challenges for global health donors. This paper views global health donors as the regulators of monopolistic service providers, and explores potential optimal fund payment systems under asymmetric information. It provides a summary and assessment of optimal price regulation designs for monopolistic service providers.
Founded in 2002, the Global Fund to Fight AIDS, Tuberculosis and Malaria (the Global Fund) is one of the world’s largest multilateral health funders, disbursing $3–$4 billion a year across 100-plus countries. Many of these countries rely on Global Fund monies to finance their respective disease responses—and for their citizens, the efficient and effective use of Global Fund monies can be the difference between life and death.
Remarkable progress has been made in the global fight against HIV/AIDS. The number of people receiving treatment in low- and middle-income countries increased from 300,000 in 2003 to 13.7 million in 2015, including 7 million supported by the United States. These gains are primarily attributable to a 2003 US government initiative called PEPFAR (the President’s Emergency Plan for AIDS Relief) that provided major new multiyear funding for global HIV/AIDS and created a new entity, the Office of the Global AIDS Coordinator, headed by an ambassador-rank Global AIDS Coordinator who is authorized to allocate PEPFAR’s resources and coordinate all US bilateral and multilateral activities on HIV/AIDS.
However, without dramatic changes to PEPFAR, the next president risks being held responsible for the failure of a program that until now has been one of the United States’ proudest foreign assistance achievements. And because PEPFAR is a major component of US foreign assistance spending, the next president’s choices about PEPFAR will heavily influence any subsequent assessments of his or her humanitarian foreign assistance policies.
The Cost and Cost-Effectiveness of Alternative Strategies to Expand Treatment to HIV-Positive South Africans: Scale Economies and Outreach Costs - Working Paper 401
The South African government is currently discussing various alternative approaches to the further expansion of antiretroviral treatment (ART) in public-sector facilities. Alternatives under consideration include the criteria under which a patient would be eligible for free care, the level of coverage with testing and care, how much of the care will be delivered in small facilities located closer to the patients, and how to assure linkage to care and subsequent adherence by ART patients.
This report offers a strategy for the Global Fund to get more health for the money by focusing more on results, maximizing cost-effectiveness, and systematically measuring performance throughout its operations.
This brief summarizes the recommendations in Achieving an AIDS Transition to use focused policies and well-designed incentives to finally bring the AIDS epidemic under control.
Five million people in poor countries are receiving AIDS treatment, but international AIDS policy is still in crisis. This book shows how to reach an “AIDS transition,” which would keep AIDS deaths down by sustaining treatment while pushing new infections even lower, so that the total number of people living with HIV/AIDS finally begins to decline.
Antiretroviral Therapy Awareness and Risky Sexual Behaviors: Evidence from Mozambique - Working Paper 239
In this paper, the authors set out to study how increased access to antiretroviral therapy affects sexual behavior in Mozambique. The researchers found that greater access to antiretroviral therapy led Mozambicans to perceive HIV/AIDS as less dangerous and to engage in more risky sexual behavior. The authors conclude that prevention programs must include educational messages about antiretroviral therapy in order to temper changing beliefs about HIV.
Food Crisis, Household Welfare, and HIV/AIDS Treatment: Evidence from Mozambique - Working Paper 238
Using panel data from Mozambique collected in 2007 and 2008, the authors explore the impact of the food crisis on the welfare of households living with HIV/AIDS. While HIV households have not suffered more from the crisis than others, infected people who experienced a negative income shock also expereinced a reduction or a slower progression in outcomes when treating their illness.
In the final installation of a three-part series, Mead Over estimates the fiscal burden of international AIDS treatment programs, and suggests ways that donors, governments, and patients can sustain current treatments while preventing future cases.
This essay proposes ways to improve the effectiveness of HIV prevention by strengthening incentives for both measurement and achievement. It builds upon a companion essay that proposes an “AIDS Transition”—that is, a gradual reduction in the number of people infected with HIV even as those inflected live longer—as a reasonable objective of donor and government AIDS policy.
Recognizing the donors’ obligation to sustain financing for the millions of AIDS patient who would not be alive today without it, this essay proposes a dynamic paradigm for the struggle with the AIDS epidemic—“the AIDS transition” —and argues that to most rapidly achieve an AIDS transition new funding of AIDS treatment should be tightly linked to dramatically improved and transparently measured prevention of HIV infections.
How to Pay “Cash-on-Delivery” for HIV Infections Averted: Two Measurement Approaches and Ten Payout Functions - Working Paper 210
This paper proposes a cash-on-delivery approach to reward AIDS programs in accordance with the number of verifiable HIV infections they avert.
CGD senior fellow Mead Over and Owen McCarthy offer a users' manual and Stata software to help students and instructors of public health, development economics, or health economics to project the future budgetary cost of AIDS treatment in poor countries and to explore the many factors affecting the calculation.
This dataset compiles selected global variables on AIDS and its treatment and prevention. The data are in the format developed by the Stata statistical software corporation and are intended for use with Over and McCarthy's AIDSCost package for the purpose of projecting the future budgetary cost of scaling up AIDS treatment.
AIDS Treatment in South Asia: Equity and Efficiency Arguments for Shouldering the Fiscal Burden When Prevalence Rates Are Low - Working Paper 161
Senior fellow Mead Over estimates the effect of AIDS on poverty in South Asia and analyzes public policy options to help the region’s predominantly private health care systems meet the challenge of treating AIDS. He finds that South Asian governments should play a larger role in AIDS treatment than in other aspects of health care, in the interest of both efficiency and equity.
Opportunities for Presidential Leadership on AIDS: From an "Emergency Plan" to a Sustainable Policy (White House and the World Policy Brief)
U.S. spending on global AIDS is widely seen as a significant foreign policy and humanitarian success, but this success contains the seeds of a future crisis. Treatment costs are set to escalate dramatically and new HIV infections continue to outpace the number of people receiving treatment. Three bad options thus loom ahead for U.S. foreign policy: indefinitely increase foreign assistance spending on an open-ended commitment, eliminate half of other foreign aid programs, or withdraw the medicine that millions of people depend upon to stay alive. CGD senior fellow Mead Over provides another option: implementing a sustainable policy that concentrates on prevention in order to drastically cut new infections while sustaining the reduction in AIDS-related deaths.