Today’s edition of PLOS Medicine contains an article describing a possible cap-and-trade scheme for global health investment, designed around a cap-and-trade carbon permit scheme. Built on the assumption that health is a global public good, it proposes that all countries sign up to a centralized system of permits based on disability-adjusted life years (DALYs). If a country wishes to invest in a low cost-effectiveness health project, it would need to offset the poor gains arising from its own scheme by purchasing DALYs for a low-income nation. The article contains some interesting examples, including the additional cost that a low-efficiency health project in a developed nation would incur through purchasing the DALY offsets.
For example, introducing pneumococcal conjugate vaccination (PCV) in Australia is a highly cost-ineffective strategy (costing about $100,000 per DALY gained), well above the threshold defined for a cost-effective intervention in a low-income nation. In order to implement this project, Australia would have to purchase about 1300 DALY offsets, which it could do through (for example) increasing the coverage of a standardized vaccination schedule in South East Asia. Purchasing these DALY offsets through this project would add 0.2% to the cost of introducing PCV in Australia (see Box 2 in the text).
The article also gives a cute chart showing which countries would need to increase investment and which could reduce investment in global health in order to meet the conditions of the scheme, and the authors suggest a significant change in the distribution of global health funding:
19%–28% of the total increase, or US$6.8–US$10 billion, would come from the US, 5%–6% from Japan, 4%–6% from Germany, 3%–4% from France, while some of the bigger middle-income countries would also contribute substantially, with 6%–7% from China (i.e., US$2.1–US$2.7 billion), 3% from Brazil, and 2% from India. Our proposal, therefore, involves a marked change in perspective over who should contribute to meeting the health MDGs [millennium development goals], with contributions expected from large emerging economies such as China and Brazil.
This is an interesting change in perspective and also a strong statement about the extent to which a few key countries (e.g. the USA, Japan and France, which it should be noted is an ex-colonial empire) are shirking their global health responsibilities.
I don’t know whether cap-and-trade systems are the best way to solve problems of the commons – the authors claim they are and give a reference, but I don’t know if they’re on strong grounds – and I’m not sure how much of a case can be made for health as a global commons compared to, say, the climate. But even if you drop the argument about global commons and just propose this cap-and-trade system as a mechanism for enforcing global investment in health priorities, I think it’s an interesting case. Certainly, a lot of countries are failing to meet their millennium development goal (MDG) targets, and although the authors note a range of reasons that are independent of funding mechanisms, it’s fairly certain that some of the shortfall is simply due to a lack of investment, and (again, as the authors observe) extremely inefficient investment choices. From a global perspective, the amount of money Japan is going to commit from 2013 to funding PCV, with limited cost-effectiveness, to save just a small number of lives, is a terrible waste when it could be funding crucial vaccinations (like tetanus for pregnant women) in countries with very low incomes and fragile health systems. It would be interesting to see how fast these countries’ health metrics would improve if the entire world adopted a scheme that forced them to consider the most efficient health investments, from a global rather than a local perspective …