• Economics
  • Rome Business School has a short course on using the Digital Health Investment Framework

    eHealth finance and economics are core components of the  Masters in eHealth and Telemedicine Management at Rome Business School. The module includes an assignment on using outputs for the Digital Health Investment Framework (DHIF), an Asian Development Bank initiative.

    An important theme in DHIF is equipping users with the skills and knowledge to begin using it to support eHealth investment decisions. Building on this, the School now has a short course of five sessions on DHIF, all available online.

    The first course starts in February 2019. Participants can Enrol now.

    The course objectives are:

    Identify the architecture, characteristics and the roles of a DHIF modelUnderstand the concepts and methodology using illustrative DHIF modelsApply DHIF to real-life projectsReview DHIF illustrative models.

    Learning outcomes are:

    Understand and develop investment goals of health, healthcare, and digital health strategiesDefine different stakeholders’ types, user requirements and required functionalityHow to develop DHIF architecture and contentIdentify appropriate network requirements, and data and capacity dependencies from other eHealth investmentsDevelop personal skills in stakeholder engagement, human capacity building in using the DHIF and change management skills

    Contents are:

    Introduction to DHIFIntroduction to eHealth costs and benefitsIntroduction to decision makingPutting it into practice, using participants own DHIF models.

    Two organisations, Società per la Salute Digitale e la Telemedicina (SIT) and Acfee are patrons of the School's Masters in eHealth and Telemedicine Management. The DHIF short course is linked to its eHealth finance and economics module.

    The DHIF course is appropriate for Acfee’s eHealth Investment Model for Africa (eHIMA), reported in eHNA. It will enable participants from Africa’s health systems to achieve a fast start up.

  • A manual for Africa to use Asia's Digital Health Impact Framework

    Following the completion of the Digital Health Impact Framework (DHIF), an Asian Development Bank project, Acfee is completing its version for Africa. It draws directly from DHIF, and emphasises ways that Africa’s health systems can start simply and use it as a platform for increasing sophistication in appraising planned eHealth investment.

    The prototype, eHealth Investment Model Africa (eHIMA), mirrors the development track of DHIF’s forerunners that include the eHealth Impact model and the Five Case Model for business cases.  Both methodologies were less sophisticated in their original formats, and have been enhanced to meet increasing needs of decision takers. eHIMA is at the equivalent entry point for African health systems.

    eHIMA combines socio-economic , financial and accounting concepts to estimate eHealth projects’ Value for Money (VFM) and affordability over time.  These are dealt with in DHIF’s ten steps:

    Identify timescalesIdentify stakeholdersIdentify benefitsIdentify resources neededEstimate socio-economic benefits' monetary valuesEstimate socio-economic costsAdjust for sensitivity, optimism and riskCalculate net benefits, the Socio-Economic Returns (SERs)Estimate financial costs and affordabilityRefine and iterate SERs and affordability to find an optimal link

    eHIMA will guide Africa’s users in selecting which steps are the most important to being modelling and appraising for decision-takers’

    A  report on eHNA describes DHIF in more detail. It was presented to the Asia eHealth Information Network (AeHIN) conference in Sri Lanka in October.

    Acfee’s overall aim is to help Africa’s eHealth decision-takers and analysts in dealing effectively with increasingly complex eHealth investment scenarios and options. Good, affordable eHealth strategies are the starting point.  eHIMA will be available in January 2019. eHNA will post updates on progress.

  • EHR’s financial benefits may be elusive

    Acfee’s stance on EHRs is that they’re an investment in health and healthcare, not an initiative to increase healthcare organisations’ income. The Acfee eHealth Impact Database contains over 60 evaluations. A common theme is that the extra cash needed for eHealth exceeds its cash savings. Healthcare quality and productivity are the main sources of benefits. The affordability planning and management lessons are clear for Africa’s health systems.

    It seems that US healthcare may see it differently. An article in Modern Healthcare says hospitals and health systems each spent millions and sometimes billions of dollars on EHRs. Examples are: 

    Trinity Health reported a US$107.8 million asset impairment charge in 2018 to switch to a single version of Epic EHR and revenue cycle management software over four years and undisclosed costsMayo Clinic spent US$1.5 billion on Epic HERPartners HealthCare spent $1.2 billion on an Epic HERScripps Health reporting weakened financial results when started an EHR conversion budgeted at US$300 million over ten years, with estimated operating costs of US$360.5 million, 20% more than the non-recurring costsBanner’s US$45 million project contributed to a US$92 million hit to university delivery operations 2017 when it spent US$24.3 million on EHR conversion.

    Modern Healthcare says the promised clinical and financial benefits have been elusive. Some healthcare organisations have suffered financial problems when eHealth has worked against them. In particular, hospitals and health systems have faced financial stress when implementation costs drive up operating costs, a Capex Opex imbalance.

    Doctors and other clinicians have been wary of embracing eHealth too enthusiastically. Concerned that they may feel held back by it and causing clinician burnout.

    A literature review in the Journal of the American Medical Informatics Association said it revealed evidence that “Data entry requirements, inefficiently designed user interfaces, insufficient health information exchange from outside institutions, information overload, and interference with the patient–physician relationship are … factors associated with physician stress.”

    Some explanations are: 

    There’s going to be some disruption when implementing EHRs so budgeting and financial planning, including contingencies helps to avoid financial crisesTo ensure successful EHRs may need extra resources after implementation to mitigate financial risksLooking at EHRs in the long-term, rather than two- or three-year returns, can be helpfulIt’s inevitable that new eHealth, especially large-scale EHRs, will slow patient volume temporarily as providers learning to use them, so are less productivePlan for eHealth complexities that diminish returns from EHRs, including procurement costs, deployment and increases in higher ICT operating costs, higher departmental operating costs and lower productivity and lower employee satisfaction. 

    Africa’s health systems can’t afford these outcomes. Rigorous business cases, an emphasis on health and healthcare benefits and top class eHealth leadership can help to avoid them.

     

  • The pressure’s on for South Africa’s health system

    South Africa's credit rating was downgraded by Moody’s, the rating agency, on 12 June 2017. This came after Fitch and Standard & Poor's downgraded the country to junk status in March. The consequences of the downgrade are far reaching. It will affect the countries’ ability to borrow money and the healthcare system will feel the pressure too. It’ll probably knock on to eHealth too.

    Health systems and policy manager at the Rural Health Advocacy Project (RHAP), Russell Rensburg, in an article in allAfrica, warns that "We are facing a financial crisis in health and it is being ignored." He says the recession will reduce the level of taxable income as companies become reluctant to invest and create jobs in South Africa. Public spending’s also likely to shrink as more cash goes to service debt.

    So what does this all mean for the healthcare sector? There’s going to be far less money to spend on an already fragile system.

    The real life impacts will be immense and felt sooner rather than later. In September 2016, South Africa introduced new HIV treatment guidelines that now offer Antiretroviral (ARV) drugs to all people who’ve tested HIV positive. As a result, the number of people on HIV treatment will double from 3.5 million to over seven million.

    The health department's deputy director general for HIV, Yogan Pillay has said "By 2025, the health department aims to have 90% of all people diagnosed with HIV on treatment, and by then, the number of people with HIV would also have increased.  "Increasingly limited resources and competing needs are real problems to us,"

    But Rensburg says there may not even be sufficient funding to sustain existing programmes. Symptoms of the budget constraints are already showing. Specialists are still fleeing the under-resourced public sector. The South African Medical Association (Sama) says KwaZulu-Natal has only two public sector oncologists left.  Durban has none. The situation isn’t much better for other specialists with only two urologists left in the province.

    Information presented at the health budget vote in March shows KwaZulu-Natal Department of Health running a deficit of more than ZAR1-billion this year. This includes a ZA R500 million shortage for HIV treatment for 2017/2018. While KwaZulu-Natal may be the first to crumble, Rensburg warns that the public health system is failing nationally, and other provinces may not be far behind.

    The North West Department of Health has already started closing clinics and will cut 2,000, or 20%, of its public sector health jobs to curb rising costs. North West’s spokesperson Tebogo Lekgethwane confirmed the cuts are needed to accommodate smaller budgets.

    How will the restricted resources and added pressure to the healthcare systems impact innovation and implementation of eHealth and mHealth initiatives? Their value and benefits now need to be more explicit, measurable, clear and tangible than ever before to make it worth the investment in the setting of shrinking resources.

  • Africa’s GDP set to take a tumble

    Economic growth provides extra resources for governments. Then they have more to spend on public services, including public health and healthcare. eHealth, towards the end of the chain can expect more money too. It’s not good news that the International Monetary Fund (IMF) has forecast a dip in Africa’s GDP growth.

    Sub-Saharan Africa Regional Economic Outlook: Restarting the Growth Engine says sub-Saharan Africa’s (SSA) economic growth’s fragile. In 2016, it slowed in about two-thirds of the countries, accounting for 83% of GDP. IMF now estimates it to be just 1.5%, the worst performance in over two decades. For 2017, it estimates GDP growth as 2.5%, but not sustainable, driven largely by one-off factors in the three largest countries.

     Nigeria: higher public spending ahead of elections Angola: the fading of effects of droughtSouth Africa: modest improvements in terms of trade.

    While some countries can still expected to their GDP to grow between 5% to 7.5%, the underlying regional momentum’s weak, and down on trends. It’s also just exceeding population growth, a crucial drawback for health and healthcare. 

    Angola, Nigeria, and the Central African Economic and Monetary Community (CEMAC) are adversely affected by low oil prices and the resulting budgetary revenue losses and balance of payments pressures. Other commodity exporters, such as Ghana, Zambia, and Zimbabwe are facing larger fiscal deficits too. 

    Côte d’Ivoire, Kenya, and Senegal, which don’t depend so much on commodities, fiscal deficits have been high for several years as governments aimed to address social and infrastructure deficits.  While their growth remains robust, vulnerabilities are starting to emerge. Public debt’s rising, borrowing costs are up, some arrears are emerging and the banking sector’s non-performing loans are increasing. 

    The IMF says outlook is affected by drought, pests and insecurity. About half of SSA countries report food insecurity.

    Adding North Africa to the SSA forecasts also shows a slight drop in 2017 average GDP growth too, with a pick-up in 2018. It’s not all doom and gloom. An important feature of the IMF data’s that 42% of African countries are still forecast to grow more than the continent’s average. About 52% are forecast to achieve it in 2018. In 2016, GDP was more skewed, with about two thirds of Africa’s countries above average. Will this forecast deterioration translate into Africa’s eHealth having an widenning gap too?

  • mHealth economics and finance are separate and integrated

    As mHealth continues to expand, especially from narrowly focused wearables to sophisticated clinical data and Artificial Intelligence (AI), robust economic and financial profiles are more important.

    Underlying sequences and profiles over time reveal information than can help to modify existing mHealth services and plan investments. A team from Acfee , the Johns Hopkins Bloomberg School of Public Health (JHU) and Johns Hopkins University Global mHealth Initiative has constructed a stage-based process for integrating economic and financial evaluations into business cases and M&E.

    Published this month in Cost Effectiveness and Resource Allocation (CERA), “Defining a staged-based process for economic and financial evaluations of mHealth programs” describes how eeconomic evaluations generate evidence about value for money achieved by a project. Financial evaluations provide evidence on the financing required to initiate, sustain and expand programmes and assess their affordability. Integrated economic and financial evaluation has several advantages. It:

    Demonstrates how mHealth can be implemented concurrently across lifecycleHelps to manage progressions across stages of maturityImproves the rigour of evidence, optimise allocations of scarce and finite resourcesFacilitates programme planning, implementation, efficiency, effectiveness and sustainability.

    Economic and financial data have some common features. It’s a theme important for Amnesty LeFevre from JHU, She says “There are so few high quality evaluations of digital health solutions, let alone ones that rigorously explore costs and consequences, particularly across sub-populations and geographic areas and consider the financial implications of sustaining and scaling up. Our article aims to promote evidence-based decision-making and encourage decision-makers to rely on a wider range of analyses to inform their decision on optimal resource uses.” It needs six stages:

    1.     Defining programme strategies and links with strategic outcomes

    2.     Effectiveness assessments

    3.     Full or partial economic evaluation

    4.     Sub-group analyses

    5.     Estimating resource requirements for expansion

    6.     Affordability assessment and identifying sustainable financing models.

    It recommends analysts:

     Prioritise activities within these stages based on programmes’ links with health outcomesAlign these with mHealth solutions’ broader stages of maturity and evaluationIncorporate into M&E activities and match outputs to stakeholders’ evidence needsFit to time points of initiations and secure available evaluation resources for each stage.

    Acfee’s Sean Broomhead and a report author said “mHealth is a crucial and expanding part of Africa’s health systems. It’s vital we can show it’s worth it, affordable and sustainable. This rigorous methodology has an essential part to play in mHealth’s future.” Adopting the combined methodology will help to improve mHealth’s role in health systems.

  • Africa’s relative poverty is increasing

    Poverty and poor health worldwide are inextricably linked, and it’s both a cause and a consequence of poor health, which traps communities in poverty. The Health Poverty Action (HPA) initiative’s clear about it, and says links between poverty and poor health are:

    Economic and political structures that sustain poverty and discrimination need to be transformed for poverty and poor health to be tackledMarginalised groups and vulnerable individuals are often worst affected, and deprived of the information, money or access to health services that would help them prevent and treat diseaseVery poor and vulnerable people may have to make harsh choices, knowingly putting their health at risk because they can’t see their children go hungryCultural and social barriers faced by marginalised groups, including indigenous communities, can mean they use health services less, with serious consequences for their health, perpetuating their disproportionate levels of povertyCosts of doctors’ fees, courses of drugs and transport to reach health centres can be devastating for poor people and their relatives who care for them or help them reach and pay for treatmentIn the worst cases, the burden of illness may mean that families have to sell their properties, take their children out of school to earn money, sometimes  by beggingCaring burdens are often taken on by female relatives who may have to give up their education, or take on waged work to help meet households’ costsMissing education has long-term implications for women’s opportunities and their healthOvercrowded and poor living conditions can contribute to the spread of airborne diseases such as tuberculosis and respiratory infections such as pneumoniaReliance on open fires or traditional stoves can lead to deadly indoor air pollutionA lack of food, clean water and sanitation can be fatal.

    The Economist has reviewed data from the World Bank.  The good news is that the number of people living in absolute poverty, defined as having less, than US$,90 a day at 2011 purchasing parity, has dropped from over 1.8 billion in 1990 to under 0.8 billion in 2013, down by about 55%. Within this considerable achievement, Sub Saharan Africa’s (SSA) relatively worse off.

    In 1990, about 15% of its population were in absolute poverty. In 2013, it was approaching 50%. Two reasons are first, absolute poverty in South Asia and East Asia and the Pacific has dropped enormously. Second, Africa’s population has expanded by about 2.5% a year, more than twice Asia’s growth rate. SSA’s absolute poverty rate has dropped from 54% to 41%, but the relatively high population growth means that more people in SSA are now living in absolute poverty.

    For many years, SSA’s been attributed with a relatively high burden of disease. Now that other global regions are pulling away from absolute poverty, it has an increasing relative absolute poverty burden. The HPA commentary indicates a heightening challenge. It’s clear where Africa’s eHealth’s focus should be.

  • Healthcare can save billions with eHealth transformation

    Over the years, there’s been many claims that eHealth can save money. By savings, they usually mean resources can be liberated and redeployed. Accenture researchers have projected that healthcare organisations in the US could save as much as US$60 billion collectively from strategic eHealth investment. An article in HealthcareITNews says Accenture’s report Digital Affectability: Quantifying the Economic Impact of Digital Assets pinpoints six services ready for significant savings. They’re Alzheimer’s, breast cancer, Congestive Heart Failure (CHF), diabetes, HIV and multiple myeloma.  

    Accenture also found that US$2 billion could be avoided every year by using eHealth to predict and mange CHF more effectively. Diagnosing Alzheimer’s early can yield significant savings too.

    “We’ve found that the highest-impact digital opportunities often lie outside the chronic, high-prevalence diseases that receive the most investment attention,” the report authors wrote. “Our analyses showed that 50 percent of system costs can be prevented by targeting investments to rarer, specialized disease states with lower prevalence.” 

    The report goes onto say that “Understanding the economic value potential of digital assets in distinct therapeutic areas and across the patient journey paves the way for the development of products, services and solutions that will optimize returns—for patients, as well as the business.”

    Seeing the long term value and savings in investing in healthcare technology is critical. Acfee’s keen on healthcare organisations understanding the eHealth costs, change management and risks of the investment needed to achieve the benefits. The report reveals eHealth’s potential impact on health systems’ costs. The report shows actual value in dollars of cost reduction in each disease across the phases of prevention, early diagnosis, intervention and monitoring.

    It shares critical insights for African countries starting to invest in eHealth. Africa’s health systems, with their constrained resources, often wrestle with eHealth investment when the benefits can’t bee seen in the short term and seem extremely challenging to realise.

  • MEASURE provides advice on eHealth investment decisions

    Taking decisions on new eHealth is complex. There are many factors to assess and weigh. A technical brief from MEASURE can help to move from ad hoc to rational decisions. It identifies eleven components that decision takers need to consider.

    Severity of disease                           Average population health         Ease of implementation                                 Emergency situations                     Burden of disease                             Economic growthIrresponsible behaviour                                 Vulnerable populations                                  Budget impact                                                                         Disease of the poor                          Cost effectiveness.

    These have four decision criteria. They’re evidence-based medicine, burden of disease, cost-effectiveness and equity. Burden of disease and cost-effectiveness are decision component that are also a decision criteria. Examples of criteria are:

    Anticipated impact: what’s the magnitude of an intervention’s impact expected on health outcomes or on quality of care?Costs and expenses: will the intervention require buying expensive equipment, such as servers that need maintaining?Usability: is the software easy to use or will it need intensive training for expected users?

    Long-standing, proven business cases, such as the five case model, have important extra decision components. One’s the realism of eHealth procurement. This needs assessing rigorously in a business case before the procurement stage’s reached to ensure that suppliers can meet requirements. Another’s healthcare organisations’ capacity and capability to succeed with the whole eHealth life-cycle that stretches from engagement, planning and design, ICT, and on to benefits realisation. These softer costs can exceed health ICT costs, so are an essential resource that need including in eHealth projects’ financial and economic models.

    Another’s efficiency. eHealth can improve productivity, often in numerous small margins across several healthcare resources. Their contributions to benefits can exceed significantly the estimated value of other benefits. They can create opportunities to expand healthcare’s capacity, but the decisions are complex.

    For large-scale eHealth, such as EHRs and Health Information Exchange (HIE), the wide range and types of healthcare, patients, communities and research activities covered can be beyond the scope of cost-effectiveness. For these, Cost Benefit Analysis (CBA) may be more appropriate.

    Three specific themes are essential. One’s sustainability, especially the availability of comprehensive and reliable connectivity that may depend on entities beyond the health sector. Second’s cyber-security, that’s become a big issue in eHealth. It needs continuous monitoring, learning, skill development and training for all users.

    The third’s risk mitigation. eHealth investment is risky. Risk’s a cost, and unmitigated, can increase costs by more than 40%, and in some cases, Acfee has found unmitigated risk costs of some 500%. It’s a vital component of all eHealth decisions.

    MEASURE’s technical brief provides helpful advice on several components needed for a sound eHealth business case. It’s a welcome step forward.

  • An eHealth costs checklist is handy for business cases

    For large scale eHealth, estimating the Total Cost or Ownership (TCO) can be a tortuous process. Athena Health, a cloud service provider, has guidelines that can help. Health Care IT: The Real (and Hidden) Costs of Ownership adds to costs that are often omitted from some TCO models. It can be used as a foundation for converting into both economic and financial costs, which are related, but not the same. While the cost items included are more than US methodologies, they’re still not complete. Examples are costs of engaging and consulting stakeholders, and for financial costs, depreciation and debt servicing.

    The first task’s to set the eHealth life-cycle.

    One-time eHealth implementation costs include:Initial software license fees                        Staff trainingInitial hardware acquisitionMaintenance fees           Interface fees   Implementation feesOngoing eHealth costs:Annual fees including upgrades                                  Software maintenance feesStaff training for upgrades                             Future product purchasesBackup and disaster recovery                    Server feesOngoing operating labour costs:Full Time Equivalent (FTE) clinical document managementFTE ICT personnel                                                 FTE billing office personnelFTE front office and front desk personnelFTE P4P Programme support                        FTE patient communications personnelOngoing operating non-pay costs:Patient statements administration       LockboxEligibility checking          Electronic Document Interchange (EDI) transaction feesClearinghouse feesTranscription    Paper claim storagePatient no-shows                                                Billing under-performanceOther costs not in Athena’s checklist include:Change management, including workflow standardisationProject managementRisk exposure where up to 70% percent of healthcare providers are dissatisfied with their EHRs and healthcare professionals spend more time on documentation.

    Estimating benefits is not as easy as estimating costs. Many are the potential to redeploy numerous small amounts of resources across healthcare activities. Many are intangible and need sophisticated techniques. They include:

    Increased efficiency and quality, such as fewer interruptions and distractionsBetter care coordination among providersAgility and an ability to scale eHealth up or down quickly as organisation evolveResponsive to changes in reimbursement models, reporting, clinical requirements, and otherregulationsRegulation compliance by having the right reporting, data and workflows in place to meet new mandates and standardsIntegration ability to build effective, low-cost links to clinical partners, such as laboratories, imaging pharmacies, to exchange information, and build and connect with expanding mHealth programmesMitigated risks with high adoption and user satisfaction where up to 70% percent of healthcare providers are dissatisfied with their EHRs.

    Costs and benefits over timescales need converting into Net Present values (NPV) using Discounted Cash Flow (DCF). For TCOs for public healthcare organisations, a discount rate of about 3%’s appropriate.  There’s a recognised tendency for estimators to suffer from optimism bias. Estimated costs need adjusting for it. For eHealth, it can be between 40% and 100%.