Estimating fiscal space for health: pitfalls and solutions – Authors' response
Authors: Mark Moses, Annie Haakenstad, Joseph Dieleman
Journal: The Lancet HIV (2019)

We appreciate Olivier Sterck's examination of our analysis1Sterck O Estimating fiscal space for health: pitfalls and solutions.Lancet HIV. 2019; (published online April 25.)http://dx.doi.org/10.1016/S2352-3018(19)30131-6Summary Full Text Full Text PDF PubMed Scopus (1) Google Scholar and thank him in particular for extolling our estimates as a public good useful for researchers and policy makers alike; however, several critiques of our analysis were made that we believe are misinterpretations of our stated aims. Sterck's first concern is that our potential government spending estimates were “not compared with the amount that countries would actually need to pay to efficiently confront the HIV/AIDS epidemic”. For the benchmark proposed by Sterck to be relevant, one must assume that HIV/AIDS programmes can be efficiently scaled up to confront the HIV/AIDS epidemic. However, Stover and colleagues' analysis of resources needed—which was used in both our and Sterck's analyses—humbly admits their estimates include “significant uncertainty” and do not capture the real-life inefficiencies associated with the scaling up of HIV/AIDS programmes.2Stover J Bollinger L Izazola JA et al.What is required to end the AIDS epidemic as a public health threat by 2030? The cost and impact of the fast-track approach.PLoS One. 2016; 11: e0154893Crossref PubMed Scopus (124) Google Scholar Further, Stover and colleagues put forth estimates of the annual resources needed to keep pace with a scale-up schedule that meets global goals. If countries have the available resources to confront the HIV/AIDS epidemic sooner rather than later, there is no reason for them to be tied to the schedule proposed by Stover and colleagues. For these two reasons, we feel it would be limiting to constrain our estimates of potential spending using Stover and colleagues' estimated resource needs. Presenting what governments could spend is likely more useful to decision makers as they face the reality of scaling up HIV/AIDS programmes and are operating with some inefficiencies. Second, not comparing our estimates against existing benchmarks does not bias the results; it is merely a choice made when determining how to report our estimates. Our estimates report what we believe governments could spend on HIV/AIDS and purposefully avoid thorny issues surrounding measurement of what countries should spend. Sterck's second concern centres on variable selection for our models, assuming we are operating from the perspective of governments, that seemingly control tax policy, resource allocation across sectors and within the health sector. This assumption leads him to suggest we should not have included covariates such as the level of the health budget, overall government budget, or current economic growth as governments have control over these inputs. On the contrary, we adopted for our analysis the more focused perspective of a ministry of health. We stated explicitly that we “estimate the potential for governments to spend additional resources on HIV/AIDS, relative to their fixed health budget and other public finance, economic, and contextual factors”. Because ministries of health typically have little control over the magnitude of their budget, tax revenue, or economic growth, Sterck's first rule of covariate selection suggests that these variables should be included in the analysis, as we have. Sterck's third rule of covariate inclusion suggests that contextual variables should be included within the analysis. Following this rule, we included HIV/AIDS mortality and incidence in our modelling, as these covariates highlight critical contextual factors when pondering the amount of resources to spend on the epidemic. Although we agree with Sterck that including these variables could lead to endogeneity, we believe the endogeneity was minimal, as it is commonly thought that investments in health impact health outcomes with some time lag,3Hsiao AJ Emdin The association between development assistance for health and malaria, HIV and tuberculosis malaria: a cross-national analysis.J Epidemiol Glob Health. 2015; 5: 41-48Crossref PubMed Scopus (11) Google Scholar because programmes take time to be implemented and scaled up and to have measurable health impacts. If this is the case, the inclusion of contemporaneous HIV/AIDS mortality and incidence would not significantly bias our results. We fully agree with Sterck and his assessment that, taken together, inclusion of the wide array of covariates offers a conservative estimate of potential spending. As presented in the supplementary appendix and stated in our discussion, “our estimates are on average less than 50% of previous estimates”. This indicates that our estimates are on the conservative end, which we feel is prudent and responsible. Lastly, Sterck suggests that quantile regressions could be an alternative to the stochastic frontier analysis (SFA) method used in our analysis. We agree that use of quantile regressions is a promising advance but believe the method requires more vetting for it to displace SFA as a dominant method in efficiency analyses. More guidance is needed in the selection of which quantile to estimate the regressions at (eg, 75%, 80%, or 95%), and the ramifications of this selection must be clearer. Additionally, with quantile regression's deterministic interpretation of the residuals, how quantile regressions perform in the presence of extremely noisy data or model misspecification remains to be seen. We believe further research is needed to determine how quantile regression will perform on real-world data. We chose SFA for our analysis because its key distinguishing feature was the ability to separate noise from efficiency. However, SFA is not without faults. As we noted, for example, accurate estimation of efficiency depends on selection of the correct functional form—a demand that quantile regressions are also forced to grapple with. In our analysis, we evaluated a series of commonly used functional forms and chose a flexible functional form on the basis of objective criteria. Efficiency estimation is a quickly evolving field and we are continually in search of alternative validated methods to generate more accurate estimates. Althought we believe in a robust discourse of these important issues, Sterk's characterisation of our analysis seems misplaced. We remain convinced that there is value in measuring the potential of what governments could spend and that completing rigorous and transparent analysis from the vantage point of the ministry of health has distinct value to decision makers both at the country-level and within the international community. We declare no competing interests. Estimating fiscal space for health: pitfalls and solutionsIn The Lancet HIV, Annie Haakenstad and colleagues1 report how much fiscal space for HIV/AIDS could be created in 137 low-income and middle-income countries. The research is timely and extremely important. Given substantial cuts in development assistance for HIV/AIDS,2 domestic financing is essential to sustain the response to the epidemic. Full-Text PDF Open AccessPotential for additional government spending on HIV/AIDS in 137 low-income and middle-income countries: an economic modelling studySome governments could mobilise more domestic resources to fight HIV/AIDS, which could free up additional development assistance for many countries without this ability, including many low-income, high-prevalence countries. However, a large gap exists between available financing and the funding needed to achieve global HIV/AIDS goals, and sustained and coordinated effort across international and domestic development partners is required to end AIDS by 2030. Full-Text PDF Open Access