Cost-Effectiveness Analysis

Having found positive impacts from the DFS intervention does not indicate that this intervention should become a policy priority. It might be the case that other interventions have a better cost-effectiveness ratio and thus, in a world of scarce resources where all interventions with positive impact results cannot be implemented, various interventions must be compared through cost-effectiveness analysis to determine the most cost-effective choice.

The costs of the DFS intervention are composed of the cost of the DFS subsidy (13 rupees per kilogram of DFS) and the costs of delivering DFS to schools (the wages of the person delivering the salt and transportation costs). We calculate the yearly costs per child to be 32.61 INR, which is equivalent to 0.48 USD⁴⁵ or 2.08 International Dollar (I$)⁴⁶.⁴⁷ The details of how we arrived at this number are outlined in Table 3.16. If the intervention were to be implemented on a large scale, these costs – and especially the delivery costs – could possibly be much lower due to economics of scale.

45 Using the average exchange rate from 2016.

46 An international $ has the same purchasing power as the USD has in the USA. It is derived by dividing the local currency by the purchasing power parity exchange rate 2005 (PPP). PPP for India is 15.66 (WHO, 2017a).

47 There is no uniform methodological approach for standardizing costs across cost-effectiveness studies.

Whereas the WHO promotes the usage of I$, other authors use the local currency, exchange rates at the time of the analysis or standardize costs to USD in 2012 (Black et al., 2016).

Table 3.16: Calculating the cost of the intervention

Monthly costs per child (13.794 children were present at school at the endline survey)

Daily costs per child (4g of DFS per day)

Yearly costs per child (244 school days from August 2015 till July 2016) Costs of DFS

Total costs per child per year

32.61 INR (0.48 USD¹, 2.08 I$²)

1 Average exchange rate in 2016.

2 In purchasing power parity exchange rate 2015.

We calculate the effects in terms of the number of disability-adjusted life years (DALYs) saved (Table 3.17). DALYs are a widely accepted metric for the burden of disease.⁴⁸ DALYs are calculated as the sum of the years lived with disability or disease (YLD) and the years of premature death in comparison to the life expectancy (YLL) (Murray and Lopez, 2013). Since in our survey we only had a very low number of children with severe anemia, but the risk of death is generally only attributed to severe anemia (Stein et al., 2005), we only include YLD in the effect calculation but no YLL. For 100 children, the intervention saved 11.267 DALYs if the effect on mild and the (not statistically significant) effect on moderate and severe anemia is taken into account (Table 3.17).

Table 3.17: Calculating the number of disability-adjusted life years (DALYs) averted

(1)

48 In the DALYs metric each healthy year lived without disease or disability is assigned a value of 0 (no disease

Moderate and severe anemia

23 59 0.052 69.398 10.370 20.06 (4.63)

SUM 72.985 11.267 18.46 (4.26)

Notes: I$: International Dollar. Calculation per 100 children. At the baseline, 19% of the children were mildly anemic and 26% were moderately or severely anemic. The impact of the DFS treatment: A 20%

reduction in the prevalence of mild and 13% reduction in the prevalence of moderate and severe anemia (not statistically significant).

1 Life expectancy in India in 2014: 68 years (World Bank, 2017b), age of the children in this sample at the endline: 9 years; 68 years minus 9 years = 59 years

2 Disability weights from the global burden of disease study (Salomon, Haagsma and Davis, 2015). Since the proportion of severely anemic children is very small, we take the disability weight for moderate anemia.

3 Costs of the intervention as calculated in table 3.16. Cost per year for 100 children: 208 I$ (51 USD), divided by DALYs saved for 100 children (column 5).

Because DFS was consumed by all children attending government-funded schools, costs also apply to all children attending these schools; however, we only know the prevalence of anemia for the second-grade students. As such, we assume that the prevalence of anemia is the same across all grades. Per DALY averted, the total cost of the intervention was 4.26 USD or 18.46 I$ (Table 3.17). We have found only a few other evaluations that were as cost-effective as our intervention. For example, Baird et al. (2003) calculated a cost-cost-effectiveness of 5 USD⁴⁹ per DALY for childhood deworming. Black et al. (2016) compare the cost-effectiveness of different reproductive, maternal, new-born and child health interventions and prove that pneumococcus vaccinations costing between 1 and 30 USD per DALY averted, and community based Vitamin A supplementations costing between 1 and 9 USD per DALY averted, as the most cost-effective interventions.⁵⁰ These numbers indicate that using DFS, in the existing school-feeding program, is extremely cost-effective.

Most of the reduction in DALYs is based on moderate and severe anemia, as the adverse health consequences from moderate and severe anemia are much higher and thus assigned higher disability weights (Table 3.17). If only the (statistically significant) effect of the intervention on mild anemia is taken into account, for 100 children only 0.897 DALYs were averted. However, even when considering the cost per DALY saved for the reduction in mild anemia only, the intervention remains very cost-effective, with a cost of 53.52 USD or 231.94 I$.

49 The authors do not specify how they exactly derived at this number. We assume that they are referring to USD at the time of publication, 2004, and not to I$. 5 USD in 2014 would be 5.07 USD in 2016.

50 Black et al. (2016) report costs in 2012 USD, the inflation rate between 2012 and 2014 was 4.5%, i.e. one USD in 2012 was 1.05 USD in 2016.

Figure 3.3 illustrates the cost-effectiveness for different interventions. It shows the costs in I$ per DALY adverted for different interventions. The first bar shows the costs of the DFS school-intervention when only the effect on mild anemia is taken into account and the second bar shows the costs when also the non-statistically significant effect on moderate and severe anemia is taken into account. These costs are compared to the costs of two micronutrient intervention assessments from Ma et al. (2007) (bars three and four) and two HIV interventions. Ma et al. (2007) calculated costs of 66 I$ for food fortification with iron, 179 I$ for iron supplementation and 103 I$ for dietary diversification.⁵¹ Hogan et al. (2005) report costs for different HIV interventions with a very wide range, where the most expensive ones go up to 2000 I$. It becomes clear from this figure that the interventions evaluated in this essay is in the middle range of costs when only the statistically significant effect on mild anemia is considered but moves to an extremely cost effective intervention when adverse effects from moderate and severe anemia are also taken into account. Hence also in terms of cost-effectiveness the longer term effects, where an impact on moderate and severe anemia is more likely to occur, are of particular interest.

Figure 3.3: Cost-effectiveness of the DFS school-level intervention

51 Although DALYs allow the comparison of costs cross interventions and diseases, the methodologies in the

The WHO assesses interventions as very cost-effective if the cost per DALY averted is less than the GNI per capita of the country where the intervention is going to be implemented and cost-effective if it is less than three times the GNI per capita (Sachs, 2001). India’s GNI per capita in 2015 was 6,030 USD (World Bank, 2017a), which means that any intervention costing less than 6,030 USD per DALY averted would be considered very cost-effective under the WHO definition. The intervention evaluated in this study strongly falls below this threshold.