Allocating
HIV-Prevention Resources: Balancing Efficiency and Equity
December
2002, Vol 92, No. 12 | American Journal of Public Health
1905-1907
© 2002
Edward
H. Kaplan, PhD and Michael H. Merson, MD
The authors are with the
Department of Epidemiology and Public Health, Yale University
School of Medicine, New Haven, Conn. Edward H. Kaplan is also
with the Yale University School of Management, New Haven,
Conn. Both were members of the Institute of Medicine’s
Committee on HIV Prevention Strategies in the United States.
Correspondence: Requests for
reprints should be sent to Edward H. Kaplan, PhD, Yale
University School of Management, PO Box 208200, New Haven, CT
06520–8200 (e-mail: edward.kaplan@yale.edu).
ABSTRACT
The primary goal of HIV prevention is to prevent as many
infections as possible. This requires allocating
HIV-prevention resources according to
costeffectiveness principles: those activities that
prevent more infections per dollar are favored over those
that prevent fewer. This is not current practice in the
United States, where prevention resources from the
federal government to the states flow in proportion
to reported AIDS cases.
Although such allocations might be considered equitable,
more infections could be prevented for the same
expenditures were cost-effectiveness principles
invoked. The downside of pure cost-effective
allocations is that they violate common norms of
equity. In this article, we argue for a middle ground that
promotes both equity and efficiency in allocating
federal HIV-prevention resources.
INTRODUCTION
WHAT IS THE PRIMARY GOAL of HIV prevention? The obvious
answer is, To prevent new HIV infections. What then
should be the primary objective of a national
HIV-prevention strategy? As argued in the recent
Institute of Medicine (IOM) report1:
to prevent as many new HIV infections as possible
with the resources available for HIV prevention.
How can this goal be achieved? By allocating HIVprevention
resources to those activities that are most cost-effective.
Many view the allocation of HIV-prevention resources
principally as a political issue. Community-based
organizations, advocacy groups, state health
departments, and other stakeholders clamor for
their fair share of the federal HIVprevention pie. Indeed,
the existing federal allocation processes (for example,
HIV-prevention community planning) and funding
outcomes (for example, funding proportional to AIDS
cases) are consistent with the view that fair
division, and not cost-effectiveness, is the predominant concern
in allocating HIV-prevention resources.
We do not deny that equity and fairness are important
considerations that must be factored into any
resource allocation process. However, it is not
often realized that the choices of which, and at
what levels, HIV interventions will be funded have important
consequences for the overall success of the national
HIVprevention effort. Changing the way that
available HIV-prevention dollars are allocated
across different activities can have an even greater impact
than increasing the overall level of spending on prevention.
Viewed in this light, it is clear that the nation pays a
price measured
in infections that could be averted but are notfor
maintaining our current approach to resource
allocation for HIV prevention.
PROPORTIONAL ALLOCATION AND
EQUITY
The recent IOM study highlights this problem. For example, in
considering the allocation of federal HIV-prevention
community planning dollars, the IOM committee noted
that Centers for Disease Control and Prevention (CDC)
funds are disbursed across the states in proportion
to newly reported AIDS cases (as shown in Figure 1
for fiscal year 1997). In the figure, each point corresponds
to a different state. For each order-of-magnitude increase
in the number of newly reported AIDS cases, there is a
corresponding order-of-magnitude increase in the amount of
prevention funds awarded.
We recognize that this pattern is more the result of history
and various congressional directives than of a
centralized, coherent plan for allocating
HIV-prevention resources. Nonetheless, proportionality
does characterize the flow of federal HIV-prevention
funds to the states. For this reason, it is important to
evaluate the impact of the resulting resource
allocations.
Some would argue that proportional allocation is fair, in
that HIV-prevention dollars awarded per AIDS case
are roughly the same across the states. We would
argue, however, that state health departments
should be rewarded for preventing new HIV infections
as opposed to reporting AIDS cases. Perversely, under
proportional allocation, state health departments
fielding successful interventions that lead to
reductions in HIV infections—and, ultimately, in
AIDS cases—would lose funds, while health departments
with ineffective programs that lead to the continued spread
of HIV and AIDS would gain resources.
There are other objections to this proportional allocation
pattern. For one example, AIDS cases are the result
of past infections, while new infections can be
prevented in the future—this renders AIDS case
reports a questionable index for allocating prevention
dollars. More problematic, however, is the fact that the
existing approach ignores the differential cost-effectiveness
of competing HIV-prevention interventions. Since the
number of infections that can be averted is the
product of the HIV incidence rate absent
intervention and the fraction of new infections that
can be prevented at a given expenditure level, ignoring the
cost-effectiveness of prevention activities when allocating
resources is untenable.
COST-EFFECTIVE ALLOCATION
AND EFFICIENCY
The objection here is not merely academic. Incorporating
cost-effectiveness into the federal-to-state
resource allocation process can make a real
difference. (While existing CDC guidelines promote
consideration of cost-effectiveness at the state
and local level, no such guidance addresses
federal–state flows where the potential impact of
cost-effectiveness is much greater.) The IOM report makes
this clear via a detailed modeling study that estimates the
number of new HIV infections that could be prevented in the
United States as a function of alternative funding allocation
strategies. At the core of the model is the simple
aforementioned identity: Infections Prevented = New
Infections x Fraction
Prevented. This identity conveniently breaks the
problem of estimating infections prevented into 2
complementary activities. Estimating the rate of
new infections is a problem in HIV epidemiology, while
estimating the fraction of infections that can be prevented
as a function of investment derives from program
evaluations. The IOM report addressed both inputs
to this equation.
Rather than attempt to model HIV incidence rates directly,
the committee employed 1996 estimates of annual new
HIV infection rates in 3 risk groups—men who have
sex with men, drug injectors, and heterosexuals at
high risk—in each of the 96 metropolitan
statistical areas in the United States with populations
over 500 000.2
Despite the imperfections of these estimates,3
they were (and remain) the only figures sufficiently disaggregated
for examining the implications of resource allocation patterns
such as that shown in Figure 1 .
To estimate the effectiveness of HIV intervention programs
serving the 3 risk groups identified above, the
committee reviewed the HIV-prevention literature.
HIV interventions for each group were characterized
initially by 2 key measures: the average cost per
program participant and the percentage reduction in HIV
incidence that could be expected among program participants.
From this review, the committee developed 3
scenarios—base case, optimistic, and
pessimistic—for each risk group. The base-case
scenario reflected average program effectiveness in
reducing the rate of new infections and average costs per
program participant. The optimistic scenario combined
above-average program effectiveness with
below-average costs, while the pessimistic scenario
combined below-average effectiveness with above-average costs.
In addition to cost and effectiveness measures, the committee
noted that most HIV-prevention studies report at least
some degree of client dropout; at times, these
rates are appreciably high. This led the committee
to impose constraints restricting the maximum
fraction of the population at risk that could be retained
by HIV interventions irrespective of expenditures. These
constraints were set to 25%, 50%, and 75% for the pessimistic,
base-case, and optimistic scenarios, respectively.
The resulting model took the form of a linear program (the
mathematical details appear in Appendix D of the
IOM report1).
As a function of the HIV-prevention budget, the
model suggests the amount of money to allocate to
prevention programs serving different risk groups
in different states to prevent as many new infections as
possible. The committee also estimated, as a function of the
budget, the effectiveness of proportional allocation in preventing
infections. The analysis suggested that at current budget
levels (the CDC spent roughly $412 million in 1999 on HIV-prevention
interventions as detailed in Appendix C of the IOM
report1),
the estimated annual number of infections prevented by
federally sponsored interventions could be increased by at
least 30% beyond what is achieved with proportional
allocation. The price paid for adhering to
proportional allocation thus equals this 30%
improvement, which translates to 900 infections annually
in the IOM example. To achieve this same 30% increase in
effectiveness with proportional allocation would require increasing
the prevention intervention budget from $412 million to
more than $700 million, which is another way of viewing the
inefficiency of the current approach. Costeffective
allocation retained at least a 30% edge compared
with proportional allocation for annual budgets of
$500 million or less in both the base-case and
pessimistic scenarios.
BALANCING EFFICIENCY AND
EQUITY
While the advantage of reallocating funds in accord with the
principles of cost-effectiveness is clear from the
results reported above, such an approach would
venture far from common norms regarding equity and
fairness. Cost-effective allocations proceed by
allocating funds from the most effective combinations of programs
and populations to the least until the money runs out. In
the process, some populations would be left without any
prevention services. For example, interventions for
groups that are particularly difficult to reach
require greater investments to locate persons at
risk, let alone to successfully intervene. This translates
into a greater expense per infection averted in such
populations, making investment in prevention
relatively unattractive from the standpoint of
cost-effectiveness. Yet there is something troubling
about the notion of preventing only "easy"
infections and doing nothing for those too
difficult to reach.
What we are faced with is a tradeoff between efficiency and
equity in HIV prevention. Proportional allocation
represents the equity extreme of this tradeoff,
whereby cost-effectiveness is completely ignored.
Cost-effective allocation represents the efficiency
extreme, whereby equity receives no weight. We propose
here an intermediate solution that promotes the best features
of both approaches and enables one to view the
equity–efficiency tradeoff inherent in this
resource allocation problem.
Our proposal is that all risk groups currently receiving
federally funded intervention services continue to
do so through the proportional allocation of some
fraction of the total budget in accordance with
current practice. This fraction would be earmarked for
proportional allocation. The remaining funds, which we
term discretionary, would be allocated in
accordance with the principles of
cost-effectiveness.
The performance of this proposal is illustrated in Figure 2,
which was derived from the same base-case model and data
employed in the IOM report. The vertical axis
reports the estimated number of HIV infections
averted annually by federally sponsored prevention activities.
The horizontal axis reports the fraction of the $412
million prevention budget that is earmarked for proportional
allocation. The curve thus illustrates the decline in
the annual number of HIV infections prevented as
the amount of funds earmarked for proportional
allocation increases.
FIGURE 2 —Number of HIV infections prevented
annually: base-case model, $412 million budget.
When all funds are earmarked, we obtain the IOM estimate that
3000 infections are prevented annually under
proportional allocation. When no funds are
earmarked (and hence all funds are allocated in
accord with costeffectiveness principles), we obtain the IOM
estimate that 3900 infections could be prevented annually.
Most important, only a partial retreat from
proportionality is required to generate most of the
benefits offered by costeffectiveness. The number
of infections averted stays relatively flat provided that
the fraction of funds earmarked for proportional allocation
remains below 60%. Indeed, setting aside 60% of the
prevention funds for proportional allocation while
allocating the remaining 40% in accordance with
cost-effectiveness principles would result in about
five sixths of the gain in averted infections that is
obtained by complete reliance on cost-effectiveness. As long
as those activities that prevent the most infections per
dollar are fully funded, deviations from the strict
cost-effective ordering of
intervention–population combinations to achieve accepted
minimum funding for all risk groups would prevent almost as
many infections as a purely cost-effective allocation. It
is therefore possible to achieve most of the gains
available from better targeting of prevention
resources while still satisfying the ethical
concerns of equity and fairness.
The IOM committee stated, and we concur, that allocation
decisions regarding HIV-prevention resources
represent the single most important set of
HIVprevention decisions made. We believe that it is
possible to prevent more infections while preserving an acceptable
degree of equity and fairness in allocation outcomes. Perhaps
more important is that all concerned with HIVprevention policy
recognize the centrality of resource allocation in
HIV-prevention policy. Resource allocation is not
simply an argument for how to divide the pie; some
allocations are arguably better than others. We
encourage analysis, debate, and discussion with the hope
of converging on federal and state allocation plans that are
both effective and fair.
Acknowledgments
The authors received support in part through the Yale
University Center for Interdisciplinary Research on
AIDS, which operates through National Institute of
Mental Health–funded grant PO1-MH/DA56826–04
(both authors), and the Societal Institute for the
Mathematical Sciences via grant DA-09351 from the National
Institute on Drug Abuse (E.H.K.).
Footnotes
The manuscript was written jointly by both authors. E. H.
Kaplan formulated the mathematical model and
produced the numerical results.
Peer Reviewed
Accepted for publication January 31, 2002.
References
1. Ruiz M, Gable A, Kaplan EH, Stoto M, Fineberg H, Trussell
J, eds. No Time To Lose: Getting More From HIV Prevention.
Washington, DC: National Academy Press; 2001.
2. Holmberg SD. The estimated prevalence and incidence of
HIV in 96 large US metropolitan areas. Am J Public Health.
1996;86:642–654.
3. Samuel MC, Osmond DE. Uncertainties in the estimation of
HIV prevalence and incidence in the United States. Am J
Public Health. 1996;86:627–628.
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