Peripheral diseconomies? The cost of HIV prevention scale-up beyond the largest cities
S. Bautista1, L. Bollinger2, M. Lundberg3, M. Over4, J. Stover2
1Instituto Nacional de Salud Pública, Cuernavaca, Mexico, 2Futures Institute, Glastonbury, United States, 3World Bank, Washington DC, United States, 4Center for Global Development, Washington DC, United States
Background: While few doubt that unit costs of HIV prevention service delivery will rise beyond some coverage level, until now there has been no empirical basis for projecting how costs would rise in any given country. For four specific HIV prevention services, HIV testing and counseling, sex worker outreach, injecting drug user outreach and sexually transmitted infection treatment, this paper develops and applies a method for estimating the cost of scaling up coverage for selected countries.
Methods: First, the known distribution of city sizes in each of the countries, together with estimates of the distribution of client population by city size, is used to estimate the potential demand and utilization of the services in each city, town or village, by size of the agglomeration. Second, a meta-analysis is conducted on both the average unit cost of each service and also the elasticity of scale for that service. Where information is incomplete, we complement the data using multiple imputation. This analysis enables the construction of an estimated cost function for each service which relates unit cost to scale of operation and other variables. Third, we estimate the total annual costs of program operation in the selected countries at coverage levels from 50% to 90%, examining how the unit and total costs change as services reach more deeply into the periphery. Fourth, we compare our results to those obtained from assuming constant unit costs.
Results: Depending on the coverage level attained, we find that allowing for the diseconomies of scale arising from operating in small population centers increases annual program costs, particularly when programs begin to scale-up.
Conclusions: Recommendations point to the need to develop new technologies which will enable HIV prevention services to operate at small scale without sacrificing quality or accessibility.
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