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The Right Health Investments

COPENHAGEN – West Africa’s Ebola epidemic has dominated headlines for much of the last year. But, as devastating as that outbreak has been, its death toll of less than 20,000 people is dwarfed by that of preventable diseases such as AIDS, tuberculosis, and malaria, which together caused more than three million deaths in 2013, hitting the world’s poorest people the hardest. This need not be the case; indeed, addressing these diseases would be an extraordinarily good investment.

The truth is that we lack the resources – both human and capital – to solve every problem the world faces, so we must focus on the areas where we can do the most good. That is what 193 national governments are currently attempting to do as they create a set of development objectives to be achieved by 2030. To help guide these efforts, my think tank, the Copenhagen Consensus Center, has asked 60 teams of top economists to assess some of the key targets, and to make an economic case for which of them should be on the final list.

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Health is a big topic, so it was addressed by six expert groups and eight commentaries – which, taken together, cover a lot of analytical ground. But one objective stood out as particularly cost-effective: tackling deadly preventable diseases.

Consider tuberculosis, which kills about 1.4 million people each year. Two billion people worldwide carry the bacterium that causes TB, one in ten of whom will develop the disease.

To be sure, significant progress has been made in the fight against TB, which killed about 100 million people during the twentieth century. Antibiotics have practically wiped out the disease in rich countries, and have helped to reduce TB’s mortality rate by more than one-third over the last two decades, saving an estimated 37 million lives since 1995.

But TB remains pervasive among the poor, and progress toward eliminating it has been hampered by weak health systems, poverty, and multi-resistant strains of TB. Despite the toll it takes, TB treatment receives just 4% of total development assistance spent on health, compared with 25% for HIV.

One of the problems is that TB can be difficult to detect, particularly in countries with weak health systems. That is why the World Health Organization recommends a preventative course of drugs, costing just $21 per person, for high-risk populations. Treatment is highly effective and, on average, can extend productive life by 20 years.

For about $8 billion annually, nearly everyone infected with TB worldwide could receive treatment – an effort that would bring almost $350 billion worth of benefits. In other words, every dollar spent on treating TB would generate $43 in returns, making it a phenomenally good investment.

Another killer disease that disproportionately affects the poor and vulnerable is malaria. As it stands, 90% of malaria deaths occur in Sub-Saharan Africa, and 77% are children under five.

Here, too, there is a cost-effective solution. While artemisinin is the most effective antimalarial medication, its widespread use risks fueling the emergence of resistance among the parasites that cause the disease. Administering artemisinin in combination with one or more other antimalarials, however, can delay the development of resistance, while helping to save almost a half-million lives each year. A half-billion dollar investment in fighting malaria would bring nearly $20 billion in returns (or, more precisely, $36 for each dollar spent).

The third major killer disease, HIV/AIDS, arose much more recently than TB and malaria, which have been around for millennia. While treatment with anti-retroviral drugs has made an enormous difference to people infected with HIV, it is not cheap. Saving 200,000 lives in the worst-affected countries would require about $1 billion annually, with every dollar spent producing about $10 in benefits.

But there is a more efficient option. Male circumcision is a one-off treatment that can reduce the transmission of HIV to men during intercourse by 60%, and, with some delay, also reduce transmission to women. Though this approach would not be as effective as widespread drug treatment, it would cost a miniscule $30 million annually – and bring almost $1 billion in benefits. That is a $28 return for each dollar spent.

Given the strong case for tackling a few specific preventable or curable diseases, one might assume that improving general health coverage to help protect populations from all of the diseases they face would bring even greater benefits. For example, one economist working on the project argued that focusing on a handful of key diseases creates islands of excellence in a sea of dysfunction.

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But, in reality, an omnibus approach would be far more expensive – and far less efficient. Improving general health care for the entire developing world would cost more than $400 billion annually, and bring only $4 in benefits for every dollar spent.

Health-related initiatives have the potential not only to save people’s lives, but also to transform them, and thus should feature in the new global development agenda. The challenge lies in identifying the specific initiatives that will make the most of limited resources. It is up to world leaders to examine the evidence and make smart choices. Millions of lives depend on it.