Selected Strategies for Mitigation of Economic Impact Indrani Gupta Institute of Economic Growth Delhi Presented at the 7 th ICAAP, Kobe July 2005.

Selected Strategies for Mitigation of Economic Impact

Indrani GuptaInstitute of Economic Growth

Delhi

Presented at the 7th ICAAP, KobeJuly 2005

Impact has been studied, analyzed and discussed for several years now

Economy wide impact or

macroeconomic impact

Impact on sectors

Health

Education

Industry

Agriculture

Impact on households and individuals

Impact mitigation at the household and individual level

Integrating HIV/AIDS policies in the development and

poverty alleviation policies remain the most

important strategy of impact mitigation.

However, countries will continue to need more

specific policies that would meet the twin objectives

of impact mitigation and mainstreaming of HIV/AIDS

policies with other existing developmental efforts.

Mitigating impact at household and individual levels

would also help in mitigating impact at other levels.

Where is the economic impact the most on individuals and households?

While treatment costs have come down

drastically over the years, treatment of OIs and

ART continue to put serious strain on households

Therefore, making treatment available at reduced

costs to the maximum number continue to be one

of the most important strategies of impact

mitigation at the household and individual levels.

ART can mitigate impact of AIDS

Sectors

Impacts onHIV Positive

Impacts onHIV Negative

Affectedindividual

Saved healthy lifeyears

Averted years oforphanhood

Othersectors

Increased tenure,productivity ofHIV+ workers

E.g. Children whoare not orphanedwill have greaterdemand forschooling

Burden of treatment in India

In India, the price of the first line regimen has

come down significantly, but it is still around Rs.

1,200 per month.

Including monitoring tests, the burden of

treatment can be at least Rs. 2,000 per month.

This amount will be a burden not only for the

very poor households, but also for those in

higher economic categories.

The second line regimen plus tests would

impose a much greater burden on individuals.

Three ways of looking at coverage for ARV

Cover those who are HIV negative at inception

Amendments to existing insurance schemes initiated by

insurance companies

Cover those who are currently HIV positive in general

schemes for communities

Tailor-made schemes in collaboration with insurance companies,

and operated through organizations working in communities

Cover those who are HIV positive through specific

schemes

Tailor-made schemes for organisation working with HIV positive

individuals

Free ARV made available by other channels

Economic analysis can help governments in prioritizing and choosing the best alternative

Some examples of studies IEG has been involved in:

World Bank study on Modeling the Cost and Consequences of

HIV/AIDS treatment and prevention in India (Over, Heywood, Gold,

Gupta, Hira and Marseille 2004)

Factors Affecting Adherence to ARV: Analysis of economic factors

affecting adherence (Horizons/Population Council)

Access to Antiretrovirals in India - A Feasibility Study (Institute of

Economic Growth and Population Council 2004)

Feasibility of health insurance for clients of care and support centers

(Institute of Economic Growth, UNDP, Freedom Foundation, ongoing)

Costing of the free ART programme of the government: A feasibility

study (Institute of Economic Growth – World Bank 2005)

HIV/AIDS Treatment and Prevention in India: Modeling the Cost and

Consequences

Mead Over, Peter Heywood, Sudhakar Kurapati (World Bank)

Julian Gold, Indrani Gupta, Abhaya Indrayan, Subhash Hira, Elliot Marseille, Nico Nagelkerke, and Arni S.R. Srinivasa Rao(Consultants)

Policy options

Adhere: Support to help patients adhere

I.e. IEC, training, lab strengthening, subsidies for patient

monitoring in both private & public sectors

MTCT+: Structured ART for identified HIV+ mothers

and their partners

includes Adhere above

BPL: Structured ART for people below the poverty

line

includes Adhere above

TMART: Transmission-minimizing ART

Cost-effectiveness of alternative ART scenarios

Note: Costs and effects are discounted at 10%

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Adhere MTCT+ BPL BPL + 70%condoms

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India should proceed cautiously with the expansion of ART

In order to:

avoid the twin dangers of resistance and disinhibition and

enhance the beneficial synergy between ART and

prevention,

M & E must accompany rollout to an unprecedented

degree.

HIV/AIDS Treatment and Prevention in India: Modeling the Cost and Consequences, World Bank 2004

Free ARV programme of the Government of India

Govt. of India launched its free antiretroviral programme in April

2004 in seven high prevalence states: Andhra Pradesh, Karnataka,

Maharashtra, Tamil Nadu, Manipur, Nagaland and NCT of Delhi

through 8 government hospitals in the first phase.

In Phase I of implementation, the sub-groups among the PLHAs

being targeted on priority are :

Sero-positive mothers who have participated in the PPTCT programme;

Sero-positive children below the age of 15 years; and

People with AIDS who seek treatment in government hospitals.

Only first line regimen of drugs have been made available through

the free ART programme.

Population Council-Horizon’s study on Adherence, 2004

The study aimed to explore adherence levels among PLHA currently receiving ART, to better understand the factors that influence adherence to treatment, to explore sexual risk behavior among PLHA on ART, and to understand the financing mechanisms PLHA use to pay for their treatment.

Findings from this study provide important insights into adherence and sexual risk behaviour among PLHA on treatment that is of immediate relevance to the National ARV program as it scales up.

Some key findings from the economic analysis

The study found high economic burden of treatment on

those without any coverage, indicating the need to focus on

alternative financing mechanisms for treatment, which

should include drugs and test

However, lower adherence was observed among patients

receiving free ARVs even after controlling for economic

status

Subsidized programs like the free ART programme need to pay

careful attention to optimal pricing to maximize adherence

Future research that can inform policymaking on scaling up of ART

Costing of free ART programme of the GOI

How sustainable is the programme?

Evaluation of the on-going programme

How well is it doing?

How good is adherence?

Study on impact of the programme on the course

of the epidemic

Is behaviour changing in the right direction?

3 by 5 initiative

The latest WHO/UNAIDS report indicates that while

there has been progress on the 3 by 5 initiative of the

WHO, the coverage has not been as expected. Till June

2005, less than 1 million people have been covered, and

it seems unlikely that the target of 3 million will be met.

Initial evidence from India also indicates that there are

constraints to rapid scaling up and the initial target of

100,000 by 2005 has been now revised to 2007. To

date, less than 10,000 are being covered under the free

ART programme

Is the free ART initiative of the government sufficient?

Preliminary evidence indicates that it will be a while till all

those who are ARV-eligible will get free treatment (WHO

estimates that 700,000 individuals need ARV today)

In the meantime, economic impact of treatment will

continue to pose a burden on many households. Need to

find other ways of extending support for treatment

Health insurance or health coverage is one such option that

need to be given serious consideration.

Objectives of the study(Population Council-IEG)

To explore the feasibility of medical insurance for HIV

positive individuals in India to cover ARV drugs and

diagnostic tests.

To arrive at possible schemes of medical insurance

To point out the feasibility of each such scheme, with

issues and constraints with regard to implementation

Cover those who are HIV negative at inception

Amendments to Mediclaim Policy• National Insurance Company worked with Gujarat SACS to

formulate and pilot a health insurance policy with the following features:

– No HIV/AIDS exclusion– Coverage

– STDs– HIV/STD as OPD treatment including ARV– Tests like CD4 count

– Sum insured of Rs. 50000– Reimbursement through identified nodal agencies– Pre existing conditions including HIV not covered– Premium being worked out; likely to be around Rs.1,000

Critical illness policy with inclusion of HIV/AIDS as one of the diseases for the general population

• Amendment for healthcare workers in CI policy can be considered seriously by existing insurance companies

Cover those who are currently HIV positive in general schemes for communities

• Karuna Trust

– Successful low cost health insurance (with

NIC as partner)

– No exclusion in terms of diseases

Possible to amend the policy to cover HIV positive

individuals and cover cost of ARV

Cover those who are HIV positive through specific schemes

The global fund (GFATM) in its 2nd round has funded three

NGOs to provide ART on a cost recovery basis.

Certain care and support organisations have been exploring

ways of providing ARV to their clients through tailor-made

schemes (UNDP-IEG-Freedom Foundation).

These options involve significant funding and therefore has

implications about sustainability

Future directions

1. The dialogue with the insurance sector on an amendment to the Critical Illness Policy should be sustained.

 2. The dialogue with the insurance sector on specific tailor-made policies for people living with HIV/AIDS (PLWHA) need to be continued.

 3. Ways of amending community health insurance schemes to incorporate ARV treatment should be explored further.

4. The feasibility of including HIV-related conditions under Mediclaim and Universal Health Scheme needs to be further strengthened

5. The amendment to the critical illness policy, as currently being implemented needs to be closely monitored and evaluated to assess its feasibility and cost implications

A truly multi-sectoral approach is called for with the

different stakeholders involved:

Ministries of Health, Finance, Labour

Planning Commission

Insurance companies

NGOs including care and support organisations

Insurance Regulatory and Development Authority

Donors

NACO should take the initiative to organize such a meeting

This strategy will go a long way in mainstreaming the

response to impact alleviation and would also allow the

country to take another look at its existing health

insurance scenario

Future directions