[afro-nets] RFI: Cost Effectiveness and Cost Benefit Analysis (2)

[Peter Burgess <Profitinafrica@aol.com>]

RFI: Cost Effectiveness and Cost Benefit Analysis (2)
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Dear Colleagues

Let me try to contribute to the questions asked by Dr. Abanum
Mark in Nigeria. I have added my answers below after my initials
PB.... I speak as an accountant with considerable experience in
cost and management accounting... not as a medical expert.

In a message dated 3/20/2005 2:36:49 PM Eastern Standard Time,
mark_opollo@yahoo.com writes:

 > May I request for information on the following topics/issues:
 >
 > 1. How may cost effectiveness be assayed/measured (with particular
 > reference on drug regimen)?


PB... the starting point is to know how much something costs.
This is not rocket science. Being able to multiply and add is
about all it takes. But making some sense of this simple infor-
mation needs a little logical thought. The challenge is to know
something more about what the cost relates to.

PB... The cost of a pill is one thing. And it can be very inter-
esting to profile the cost of the same pill from country to
country. You can learn a lot about the business and profit
strategy of the drug companies.

PB... The cost of treatment is another thing. This is not just
pills (medication) but also the various involvements of medical
professionals, para-professionals and other care givers. And
cost of treatment might be best expressed in terms of a cycle of
treatment that cures the patient or it might be expressed as a
cost per month.

PB... Again profiling the remuneration of health professionals
and care givers is very interesting. Developing "south" coun-
tries have very low pay for these people, certainly compared to
the rich "north" countries... and an enormous number of care
givers are not remunerated at all.

PB... The above information sets the stage for knowing something
about how much the treatment is costing.

PB... How to determine effectiveness? If the treatment works and
the patient gets better then we have a cost for the treatment.
It is a relatively simple statistical exercise to relate the
costs to the treatment results. By the way, if it is not a SIM-
PLE statistical exercise, then we have been getting the wrong
data.

 > 2. How may cost benefit analysis be assayed/measured (with par-
 > ticular reference on drug regimen)?

PB... See above

 > 3. Those who have any recommendations on methods for assaying
 > blood level of drugs (with particular reference on chloroquine
 > and artemisinin)?

PB... Not sure an accountant is qualified to add much here.

 > What are these methods?
 > Otherwise what are the recommended methods?

PB... One strength of good accounting... is the power of com-
parison. Use the SAME costing method for different treatments
can end up giving a very reliable comparison of the treatments.
Unless the costing method if totally wrong (which should be
quite unlikely) the comparative information will be good.

PB... The transparency and accountability agenda is not only
about fund flows and the corruption issues... but also about us-
ing scarce resources to get the best possible results. We have
absolutely no "agenda", merely a desire to be able to present
costs and results in a useful and reliable way so that experts
can use the resources to best effect.

PB... One technique we are developing is the use of "standard
costs" and "standard values" so that we can eliminate the dis-
tortion of high salaries in the "north" and low salaries in the
"south" and the non-pay of volunteers!

PB... More another time

Peter Burgess
Transparency and Accountability
a global not for profit Network
mailto:tracnet@gmail.com