Cost/DALY Averted in a Small Hospital in Sierra Leone: What Is the Relative Contribution of Different Services?
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- Gosselin, R.A., Thind, A. & Bellardinelli, A. World J. Surg. (2006) 30: 505. doi:10.1007/s00268-005-0609-5
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A cost-effective analysis (CEA) can be a useful tool to guide resource allocation decisions. However, there is a dearth of evidence on the cost/disability-adjusted life year (DALY) averted by health facilities in the developing world.
We conducted a study to calculate the costs and the DALYs averted by an entire hospital in Sierra Leone, using the method suggested by McCord and Chowdhury (Int J Gynaecol Obstet 2003;81:83–92).
For the 3-month study period, total costs were calculated to be $369,774. Using the approach of McCord and Chowdhury, we calculated that 11,282 DALYs were averted during the study period, resulting in a cost/DALY averted of $32.78. This figure compares favorably to other non-surgical health interventions in developing countries. We found that while surgery accounts for 63% of total caseload, it contributes to 38% of the total DALYs averted.
Surgical treatment of some common pathologies in developing countries may be more cost-effective than previously thought, and our results provide evidence for the inclusion of surgery as part of the basic public health armamentarium in developing countries. However, these results are highly context-specific, and more research is needed from developing countries to further refine the methodology and analysis.
Cost-effectiveness analysis (CEA) is becoming an increasingly important tool for policymakers in developing countries. When faced with resource constraints, CEA can be used to facilitate allocation decisions by policymakers in a manner that maximizes the overall health of the recipients.1 The World Health Organization (WHO) has published guidelines for CEA, using the Disability Adjusted Life-Year (DALY) as the unit of measurement of effectiveness.1
Literature examining cost-effectiveness in developing countries usually focuses on specific conditions.2–4 Although these studies may be beneficial in deciding the cost-effectiveness of a disease-focused program (for example, cataract surgery), policymakers are often faced with the decision of whether to construct a clinic/hospital or not. Knowing the cost-effectiveness of such facilities would be of tremendous benefit in such allocation decisions.
Unfortunately, the literature examining such facility-based cost-effectiveness is sparse.5,6 The present study adds to the literature by estimating the cost-effectiveness of a small hospital in Sierra Leone and discusses the contributions of different services at this hospital, with an emphasis on surgery.
Surgery lies at the end of the spectrum of the curative medical model. In contrast to simple interventions such as oral rehydration solution (ORS), the role of surgical interventions in poor and developing countries has traditionally been considered minimal, because of perceived high costs and limited human and material capacity availability. It is thus not surprising that there are only a few studies examining cost-effectiveness of surgery in developing countries. For example, the first edition of the landmark book Disease Control Priorities in Developing Countries barely mentioned the cost-effectiveness of surgical interventions, save for cataract surgery.7 The forthcoming second edition, however, has an entire chapter devoted to cost-effectiveness of surgery in resource-poor environments, which testifies to the growing perception of surgery as an important part of the public health armamentarium.5
Earlier studies attempted to assess the cost structure of surgical facilities/hospitals;8–10 none attempted to examine the effectiveness of these facilities. More recent work has focused on linking these cost analyses with some dimension of output. For example, Shepard et al. reported on the costs of surgical repair of inguinal hernias at two types of facilities in Colombia and measured effectiveness in terms of complication rates and patient satisfaction. They found that it cost $39.12 to repair an inguinal hernia in an intermediate health unit and $148.76 to do so in a hospital, but they did not find any statistically significant differences in complication rates and patient satisfaction between these two locations.11
A study from Ghana evaluated the cost-effectiveness of 40 health interventions, including three surgical conditions (severe trauma, appendicitis, and hernia).12 The authors reported their results in terms of US$ for costs and Life Years Saved (LYS) for effectiveness, and found that cost-effectiveness of appendectomy was $36/LYS, whereas it was $74/LYS for hernias and $233/LYS for severe trauma. In contrast, medical treatment for diarrhea was $74/LYS and treatment of malaria was $84/LYS. From a surgical perspective, it is important to note that these authors did not define whether the surgical treatment of hernias was emergent or elective; moreover, they did not define what constituted “severe” trauma.12
The only surgical intervention that is well proven and accepted to be cost-effective in developing countries is cataract surgery.3,4 For example, a recent analysis reported that it cost only 57 International dollars per disability-adjusted life year (DALY) averted in the WHO Southeast Asia region.2
In contrast to these disease specific analyses, only two studies have attempted to estimate the cost-effectiveness of an entire surgical facility/ward. McCord et al. evaluated a small 50-bed hospital in Bangladesh and presented their results in US$ per DALY averted.6 They found a net cost of only $10.93 per DALY averted for the entire hospital activity. Debas et al. in the forthcoming second edition of the World Bank’s book Disease Control Priorities in Developing Countries estimated the cost-effectiveness of the surgical ward of a typical district hospital in developing countries. They found that cost per surgical DALY averted at the district hospital level in sub-Saharan Africa and South Asia is between $33 and $38; and that it is between $77 and $94 in Europe and Central Asia, the Middle East and North Africa, and Latin America and the Caribbean.5 They concluded that, from the perspective of providing surgical care, a district hospital is an exceptional “buy,” both in sub-Saharan Africa and in South Asia, areas with high disease burdens.
This article adds to the literature by adopting the McCord et al. approach and using actual data from a small hospital in Sierra Leone to estimate the cost/DALY averted, thus enabling comparisons to other non-surgical health interventions in resource-poor situations. This research will add to the evidence available on which policymakers can base decisions for allocation of scarce resources.
Sierra Leone is a small country in western Africa, with an estimated population of 6 million people. Although a devastating civil war officially ended in 1999, the country is still struggling to re-establish its institutions and the rule of law. It has consistently ranked at the bottom on the United Nations’ Human Development Index (HDI), which is based, among other factors, on a country’s life expectancy, per capita gross domestic product, and maternal and under-five mortalities. The national health care system is practically non-existent; government hospitals and other health care facilities (what is left of them) are essentially non-functional because of severe lack of human and material resources. There are a few private clinics or hospitals in the capital, which cater to expatriates or the handful of local nationals who can afford them; by and large it is the non-governmental organizations (NGOs) that provide health care to the population.
Emergency Hospital is an Italian NGO dedicated to helping civilian victims of wars and conflicts. It built and has operated a surgical hospital in the capital city of Freetown since 2001. This hospital provides, at no cost to patients, general and orthopedic surgical care, and has recently expanded its services to provide pediatric outpatient and inpatient care as well. It is the only functioning surgical hospital in the country, and is a referral center to which NGOs working in remote areas routinely transfer surgical cases. Of note is the fact that the hospital does not provide any obstetric services.
The hospital has 90 beds, 60 of which are in surgical wards (30 pediatric and 30 adult beds), 16 in the pediatric inpatient medical ward, and the rest divided between the intensive care unit (ICU) and for patients with spinal cord injuries. The hospital usually functions at 90%–100% of capacity, and extra beds are added when this capacity is exceeded. The hospital has two operating rooms, a laboratory with a blood bank, an x-ray department, a pharmacy, a physiotherapy department, and support staff for administration, kitchen, laundry, maintenance, and transportation. The surgical outpatient department (OPD), which includes an area for dressing changes, sees an average of 60 patients and admits an average of 8 patients a day (including elective admissions for the following day). The pediatric OPD sees an average of 30 patients a day, of which an average of three are admitted.
Staffing is fairly consistent throughout the year. For the study period (July–September 2004), there were 9 expatriate and 177 full-time national staff. The expatriate staff included a program coordinator, a medical coordinator, a general surgeon, an orthopedic surgeon, an administrator, a physiotherapist, and three nurses. The national staff comprised of 4 physicians (2 pediatricians and 2 surgeons-in-training), 3 nurse-anesthetists, 80 care-related personnel (nurses, therapists, etc.), and 90 non-care-related personnel (administration, security, cleaners, drivers, etc).
This study was carried out in October–November 2004 by abstracting all hospital ward and departmental records for the previous three months (July–September 2004). Based on the authors’ experience, this 3-month period was considered to be representative of the yearly activity of the hospital, both in terms of the cost and output estimation.
We estimated the fixed and operating costs for the entire hospital and calculated monthly amounts for each category. Fixed costs represent the depreciated monthly cost of land purchase and hospital construction, and initial equipment (furniture, medical equipment, vehicles, generators, etc.) required for starting hospital services. The building construction cost was straight line depreciated to zero over 30 years; a 10-year period was used to depreciate equipment costs.
Local operating costs included the salaries and benefits for expatriate and local staff, cost of locally purchased equipment, consumables and drugs, maintenance costs for the building and equipment, transportation, fuel (for vehicles and hospital generators), utilities, and miscellaneous costs (cleaning materials, bank charges, office equipment, etc.). A non-local operating cost that the hospital incurs is the cost of a shipping container sent twice a year from Italy, containing equipment, supplies, and consumables. The prorated monthly cost of these deliveries was included in the operating cost of the hospital. We used the exchange rate prevailing in September 2004 to convert leones to USD (2800 leones = 1 US$).
We calculated the DALY for each patient seen and treated in the hospital during the 3-month study period. Data were abstracted from admission logs, ward and department logs, and charts of all patients seen and treated at the hospital, either as inpatients or as outpatients. We used the approach of McCord et al. in calculating DALYs, but with slightly simplified estimates of risk of death or disability, and effectiveness of treatment.6
Severity of disease was given a weight of 1.0 if the disease was considered to be fatal >95% of the time without treatment. A weight of 0.7 was given for those conditions fatal >50% but <95% of the time, 0.3 for those fatal <50% but >5% of the time, and 0.0 for those <5% of the time. Similarly, the effectiveness of treatment was given a weight of 1.0 if treatment had a >95% chance of a permanent cure of the given condition, 0.7 if that chance was <95% but >50%, 0.3 if it was estimated to be <50% but >5%, and 0.0 if <5%. Years of life lost (YLLs) were calculated using the discounted numbers provided in the Global Burden of Disease (GBD) study.13 For the years lived with disability (YLDs), weight values from the GBD study were used when available (for example, fractures, burns, amputations, diarrheal diseases, and anemia/malaria); when these were unavailable in the published literature, the authors used their own estimates. Appendix 1 depicts the actual calculations for specific cases.
DALYs averted among ICU patients were attributed to the inpatient ward where the patients were finally transferred. No DALYs were attributed to the few ICU patients discharged directly home, as these were cases admitted to the ICU (as the hospital was full) for overnight observation, for a condition that ultimately proved to be benign. The same reasoning was applied to the physiotherapy department, which did not contribute to DALYs averted because the outpatient department sees patients that are discharged from the wards or referred from OPDs.
The cost per DALY averted was calculated by summing the fixed and operating costs of the hospital for the 3-month study period and dividing it by the sum of all DALYs averted during the same 3-month period.
Monthly operating costs
Land purchase and hospital construction
Expatriate staff–salaries and benefits
Local staff–salaries and benefits
Medical equipment, consumables, and drugs
Maintenance of building and equipment
Container from Italy
Cases seen and DALYs averted by service (July–Sep 2004)
Surgical outpatient department
Dressings and suture removal
Fracture reduction and casting
Surgical inpatient ward (General Surgery)
Surgical inpatient ward (Orthopedic Surgery)
Acute respiratory infection
Pediatric inpatient ward
Dividing the total costs for the 3 months (3 × $123,358) by the total DALYs averted during these 3 months (11,282), gives the cost per DALY averted, which is $32.78.
Quantifying effectiveness is not as straightforward as measuring costs, and certainly it was more controversial. We agree with McCord et al. that, although imperfect, the DALY is the best composite measure available.6 Since its original description by Murray and colleagues, the use of the DALY has been widely promoted by the World Bank and the World Health Organization.13,14 It is the unit of measurement used in two of the most influential publications in the field, the Global Burden of Disease study and the Disease Control Priorities in Developing Countries book.7,14 It is beyond the scope of this study to debate the merits and drawbacks of the DALY, as they are amply documented elsewhere.15–17
Our cost/DALY averted ($32.78) is higher than that reported by McCord et al. from Bangladesh ($10.83). However, even at these rates, the hospital compares favorably with other non-surgical interventions such as Vitamin A distribution ($9), measles immunization ($15), or oral rehydration solution (ORS) treatment for diarrhea ($35), as calculated by Jamison.7 Our study strongly supports the notion put forward by McCord et al. that the commonly held dogma in public health circles, that surgery is not cost-effective, particularly in developing countries, needed to be revisited.
There are a few probable hypotheses why our cost/DALY averted was higher than that reported by McCord et al. As reported in Methods, we slightly modified the model used by McCord et al., specifically by simplifying the weights. We found that most of the DALYs averted were contributed by the pediatric OPD and inpatient ward, as opposed to the surgical service (which contributed 60% of the DALYs averted in the study of McCord et al.). This can be explained in part because our hospital does not provide obstetric care, whereas in their Bangladesh hospital, obstetrics and gynecology contributed greatly to the caseload. A successful surgical intervention there often affected the survival of two patients: a young mother, and a newborn. Life-saving procedures, particularly in the young, averted many more DALYs than interventions that prevented or improved disability. In essence, the case mix of the two hospitals is quite different.
In our study, although the surgical service provides the bulk of the caseload, the maximal DALYs are averted in the pediatric service. This can be explained by the younger age of the patients, the overall higher severity of disease, and the higher rate of success with treatment compared to the surgical service.
It is important to note that we have been highly conservative in calculating the DALYs averted. For example, on the surgical side, we have not attributed any DALYs to surgery for simple repair (prophylactic) of inguinal hernias, head injuries, spinal injuries, sequestrectomies, arthrodesis, and osteotomies. For the pediatric OPD, we calculated DALYS averted using the following assumptions: <5% would die without treatment, and treatment is successful between 50% and 95% of the time. It is quite likely that averting 3238 DALYs in 2498 pediatric patients is a significant underestimation. Furthermore, and probably as important, all patients had only one diagnosis recorded in the log books. No DALYs averted were attributed to co-morbidities. Some patients logged as “head injury” also had fractures that were treated. Some children who underwent sequestrectomies were also treated for malaria or anemia. All these factors combine to form a very conservative estimate of DALYs averted in our study.
In conclusion, despite differences in opinion regarding the moral and ethical considerations of using DALYs for such analyses, and the assumptions underlying the calculations, we feel that cost/DALY averted can be a useful (but not the only) tool in assisting policymakers in making resource allocation decisions. Our results indicate that the cost/DALY averted by a hospital in Sierra Leone compares favorably with the costs of other interventions documented in the literature. Given that this facility is providing primarily surgical and pediatric services, our results suggest that surgery should be included in the basic public health armamentarium in developing countries.