A total of 4 years after the WHO’s call to engage all healthcare providers, we are beginning to see evidence on the cost–effectiveness of the public–private mix (PPM) for TB care and control Citation[1]. Until recently, economic evaluations of TB interventions were largely focused on questions regarding screening protocols, short-term chemotherapy and preventive therapy. Economic evaluations now seek to inform decision-makers on the institutional composition of alternative modes of program delivery Citation[2–5]. While this call to engage all healthcare providers has not gone without criticism, the engagement of providers along the continuum of care from traditional and informal practitioners, community clinics and hospitals, to other nongovernmental organizations, is central to public economic theory Citation[6].
Externalities
TB and infectious diseases in general exhibit a key concept in economics termed externalities. In the context of TB, externalities represent costs or benefits borne or received by others not participating in preventive therapy, diagnosis or treatment as a patient. The presence of externalities in the prevention, treatment and control of TB makes economics an important tool to examine fundamental questions now being evaluated in cost–effectiveness studies of the PPM. For example, how have private markets failed to provide socially desirable outcomes, and to what extent can public intervention address these failures in a severely resource constrained environment? Given the characteristics of an infectious disease like TB and the likely role for public intervention, how might the public sector role change in countries with varied private and public sector capabilities? To what extent will government provision of TB care replace or ‘crowd out’ existing private TB care?
Economists have identified several sources of externalities associated with TB prevention and treatment, and these externalities help to explain why patients so often delay diagnosis and default on preventive therapy or treatment Citation[7]. From a patient perspective, whether or not to seek diagnosis is a decision made under considerable uncertainty both in terms of the true disease status, the ultimate cost of diagnosis and subsequent treatment if required.
Diagnosis externalities
Early diagnosis confers external benefits by obtaining treatment and reducing the probability of infection to others. Delayed diagnosis imposes external costs by remaining infected and thereby increasing the probability of infecting others. Diagnosis is often protracted when patients consider only the (private) cost and benefits to themselves while ignoring the (social) costs and benefits that accrue to others by their own decision about whether or not to seek diagnosis.
The costs to resolve uncertainty through diagnosis for a patient in a developing country can be a substantial percentage of the annual household income. Recently reported figures for mean delay between symptom onset and the start of treatment in a Bangalore study was 72 days while the average cost per patient seeking diagnosis but not including treatment was 45.4% of the annual household income per capita Citation[4]. A likely remedy to address the diagnosis externality would be subsidization of diagnosis and treatment services and the reduction of other patient costs such as travel and lost wages at the point of health contact. For a PPM in Bangalore, the point of health contact for more than 70% of patients was a private practitioner Citation[4].
Drug therapy externalities
Other externalities still exist in preventive therapy and treatment. By completing the full course of drug therapy the patient receives the benefits of not becoming infected in the case of preventive therapy or the possibility of being cured by treatment. By participating in preventive therapy or treatment the patient also confers external benefits by reducing the probability of transmission to others. This “contemporaneous course completion externality” directly impacts infection rates Citation[7]. The individual choice of whether or not to complete a full course of drug therapy, however, also depends on the cost to the patient. These costs include not only the cost of drugs and other tests but also transportation cost and lost wages for time taken up by drug administration, and clinical monitoring in the case of directly observed therapy. A study on the cost–effectiveness of a PPM in South Africa found that the cost to the patient was 2.6–3.3-times higher for patients in a purely public model, and that this difference when compared with patients in a public–private nongovernmental mix model reflected less time spent getting treatment and lower transportation cost Citation[2]. Subsidization of drug therapy and patient costs associated with travel and direct observation could effectively extend drug therapy and improve patient adherence. For the PPM study in Bangalore the reduction in cost from the patient perspective fell by 75% over the study period Citation[5]. Other researchers at a clinic in Battambang, Cambodia, which provided screening, preventive therapy, treatment and transportation to the clinic at no cost to the patient reported adherence rates of 86% for 9-month isoniazid preventive therapy Citation[8].
A second and more complex type of drug therapy externality emerges when we consider the cost of future preventive therapy and treatment due to actions related to the completion of current drug therapy. This externality is dynamic in the sense that the effectiveness of future drug therapy depends critically on the completion rates of therapy at the time. Intermediate completion rates for preventive therapy or treatment lead to drug resistance. This particular failure of private decision-makers to make socially optimal decisions about drug therapy completion is especially pernicious. Failure to act decisively in this case would lead to unaffordable and/or completely ineffective treatment thereby causing longer term TB incidence rates to be dependent upon expensive and uncertain medical technological innovation Citation[7].
How much public, how much private?
We have focused primarily on demand-side failures but supply-side failures may also exist through market power or the adoption of inefficient medical technologies; however, these can be remedied by increased regulation, public provision of TB control measures or the supplementation of private TB control services. Owing to both demand- and supply-side failures some have argued for strengthening the public provision of TB care services before engaging the private sector, but these recommendations fail to acknowledge the real possibility that the provision of public TB-related services may supplant or crowd-out private supply Citation[7].
While it is certainly true that countries with public infrastructure already in place to provide TB control services should consider strengthening these public services, this may not be true of all countries facing TB control problems. PPMs are especially useful in countries with less developed and less effective public sectors. It is likely the case that some capacity exists in both the public and private sectors but in a developing country context public financing options will likely be limited. The capabilities of the public sector will also vary from country to country but ignoring private sector capabilities may mean ignoring many patients at the first point of contact with healthcare providers. Although evidence on the effectiveness of PPMs remains limited, the potential benefits to communities affected by TB warrant a careful consideration of private, public and conglomerate TB services.
Acknowledgements
The opinions and conclusions expressed in this editorial are those of the author and do not necessarily represent the views of the US Department of Veterans Affairs or the US Veterans Health Administration.
Financial & competing interests disclosure
The author has no relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript. This includes employment, consultancies, honoraria, stock ownership or options, expert testimony, grants or patents received or pending, or royalties.
No writing assistance was utilized in the production of this manuscript.
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