COSTING THE NSP: Making the most of our money

COSTING THE NSP: Making the most of our money
Coins change hands in Khayelitsha township, South Africa. Photo by Laura Van Der Pohl, courtesy of Photoshare.


In order to control HIV, we need to be sure we have enough money and that we spend that money effectively. Daygan Eagar of Section27 shows us how to work out the cost of implementing South Africa’s new National Strategic Plan for HIV, TB and STIs.

Costing and budgeting may seem like boring and difficult topics, but they are a key part of our struggle against HIV and TB. If we don’t budget and spend money effectively, our clinics will run out of medicines. The laboratories that carry out HIV and TB tests will be unable to function. If we dismiss budgeting and costing as dull, what we are really saying is that it is too dull to ensure that our health system works well.

Many people think that unless you actually work in government planning and budgeting it is not worth the time and effort that it takes to understand these processes. However, in recent years we have seen enough evidence that leaving these tasks to other people is no guarantee of success. At its worst, poor budgeting and costing led to a deadly ARV moratorium in the Free State in 2008. And in late 2011 and early 2012 similar failures lay behind the near collapse of the National Health Laboratory Service. Costing and budgeting are where you often find the real bottlenecks. Activists—or indeed anyone who wants to see South Africa bring HIV and TB under control—are not doing the best they can unless they engage with costing and budgeting.

What is costing?

Costing is the process of placing a monetary value on the activities of an organisation. This information is then used to develop budgets and to monitor use of the organisation’s resources.

In terms of our response to HIV, TB and STIs, costing is critical to identifying which resources we need. If the South African government does not know what health interventions will cost it becomes very difficult to budget properly for their implementation. The best way to determine these costs and our resource needs is to carry out a proper costing of the National Strategic Plan (NSP) itself. In other words, even before we put the plan into action, we have to calculate all of its costs and make sure that we have sufficient funds available to meet the goals of the new NSP (2012-2016).

Calling government to account

For civil society, getting to grips with costing and what the numbers really mean is essential if we want to hold government and other agencies to account for their allocation and use of scarce resources. If we simply remove some of the technical language that surrounds the costing process, it is not too hard to understand.

Even though we can use various models and tools to price activities and health interventions a few key elements are common to most costing methods.

The following steps outline how the South African National AIDS Council (SANAC) Costing Task Team costed the 2012-2016 NSP:

  1. WHAT are we costing? All the interventions for every sub-objective contained within each of the four main strategic objectives.
  2. WHOSE health are we costing? What is the total population in need of each intervention? We gathered this information from epidemiological and demographic data from various sources such as Statistics South Africa and government departments’ own M&E data.
  3.  What are the TARGETS? Once we knew the total population in need we determined the targets for each intervention. These were often given as the percentage of the total population in need that each intervention would cover. This information was drawn from the NSP itself.
  4. What are the UNIT COSTS? Next, we calculated the unit cost of interventions by finding the price of all the ingredients of each intervention (for example, ARVS, staff and equipment) and adding these figures together. In this way we arrived at a total cost for each unit and type of intervention.
  5. What is the TOTAL COST? Once we had a unit cost for each intervention we could then multiply that figure by the number of people targeted for that intervention—or the number of times the intervention would be needed. We then added up the costs of all interventions for each year of the NSP, to arrive at the approximate annual cost of the plan.

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Costing complications

In reality the NSP costing was somewhat more complex than we have described above. It required the use of several statistical and epidemiological tools and models. These allowed us to determine unit costs for many of the biomedical interventions such as antiretroviral treatment (ART) and TB treatment.

In some instances, particularly for interventions related to human rights, there were no readily available ingredient costs. Therefore we had to do some research to find these and where necessary to adapt data for our purposes.

For a few activities and interventions that feature in the plan there is simply no way to accurately establish the ingredients of an intervention. For example, where the plan mentions ‘research’ as part of any intervention there is insufficient information to know what this research would involve. It is not possible to foresee how wide-ranging the research would be or how long it would take. For the costing team, this meant there was no way to determine the unit costs of research. Nor could we accurately estimate the total annual cost of research.

Monitoring and Evaluation (M&E) posed similar difficulties. Even though M&E is essential for the successful implementation of the NSP, by the time the 2012-2016 plan had been finalised it was still unclear what M&E structures would look like or how its processes would work. We could not use costs from the previous NSP because the lack of effective M&E was one of the major shortcomings of that plan.

In some cases, for parts of the new NSP that resisted costing we had to leave out these costs. In others we added onto the total cost of the plan a percentage that could adequately cover these interventions. We based the percentages on international best practice and on some educated estimates. This should not have a significant impact on the estimated total cost of the plan, however, as the predicted cost of these interventions was small. The cost of M&E, for example, was estimated to be only 0.12% of the total cost of implementing the NSP.

In the end despite such challenges this was the most comprehensive NSP costing to date. The team managed to generate detailed figures for all of the high-cost elements of the plan. We also priced several interventions that could not be included in the costing of the 2007-2011 NSP.

Where the money will go

The results of this costing give a good indication of resource needs for the NSP. They also highlight the importance that the NSP gives to various strategic objectives and types of interventions such as treatment, prevention and the protection of human rights.

The annual total cost of implementing the NSP was found to be R18.73 billion for 2012-13. This total is expected to pass the R32 billion mark by 2016-17. As the graph on page 5 shows, by far the largest cost of putting the plan into action will be the provision of antiretroviral treatment. Estimates suggest that the price of ART provision will rise from R11.68 billion for 2012-13 to almost R20 billion by 2016-17. Therefore ART will account for roughly 62% of the total annual cost of the NSP. If we add to this the 9% for HIV screening as well as the 12% for TB screening and treatment we see that biomedical interventions make up around 83% of the total annual cost of the plan.

By contrast, interventions aimed at prevention, such as the provision of condoms, medical male circumcision (MMC) and youth HIV prevention, account for only about 5% of the total annual cost of the plan. However it is worth remembering that recent research shows that treatment is also a highly effective form of prevention.

Other key areas essential to the success of the NSP—such as administration, M&E, research, the protection of human rights and access to justice—also form only a small proportion of the total annual cost of the plan.  For example, the cost of Strategic Objective Four (SO4), ‘Ensuring the Protection of Human Rights and Improving Access to Justice’, makes up only around 1% of the total annual cost of the NSP.

Unfortunately the costing does not tell us why certain interventions appear to take priority over others. There may be very good reasons for these decisions and in many cases, such as ART, we know that there are. ART has been shown to be highly effective—and cost effective—not only as treatment but also as prevention. What the costing does, however, is to give us a tool to begin questioning how we allocate our country’s resources for HIV and where this may need improvement.

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The costing continues

Translating the NSP into figures is not the end of the costing process. Nor is it necessarily the most important aspect of the task team’s briefing. The NSP costing is carried out at policy-level and therefore only includes costs by strategic objective and intervention. It does not, and cannot, provide enough detail to cost the actual activities needed to implement each intervention.  Therefore, while the costing gives us a good estimate of the resources we need, it does not provide sufficient detail to ensure that South Africa mobilises the right resources through its implementation budgets.

This is due to the fact that the NSP is a broad policy document. It considers interventions and targets at a national level. Government cannot simply divide these targets between provinces based on the size of their populations or even on their burden of disease.

Getting down to details

Instead, putting the NSP into action will require implementation plans for each province, department and implementing agency (for example, an NGO). These plans will detail how to carry out each intervention and what activities must be completed each year to do so. The plans will be developed with specific provincial and local settings in mind. Each will vary depending on local priorities, the burden of disease, and even on whether a province is mainly rural or mainly urban. While all these plans should clearly align with the NSP they will need individual costing.

These detailed documents will also address important activities that the NSP does not cover. Strategic Objective 4 (SO4) is a good example here. It contains a number of sub-objectives that are vital for removing barriers to treatment access. These also aim to prevent or deal with acts of violence and discrimination against HIV-positive people. Yet many of the interventions listed within SO4 only seek to remove barriers to the protection of human rights in legislation and strategic planning or to enable the monitoring of human rights abuses.

Interventions that aim to ensure access to justice and the protection of human rights will require development in the plans of departments and implementing agencies. Here bodies such as the Department of Justice and the Department of Corrections will need to draw up and cost detailed implementation plans.

Local knowledge

This is where the value of a costing task team made up mostly of locally-based experts really comes into play. The primary goal of the team is not a once-off costing exercise. Instead, the group aims for long-term collaboration with provinces and departments throughout the life of the NSP. This collaboration must allow the team to provide ongoing technical assistance with implementation planning, costing and budgeting.

In addition to helping provinces and departments to cost their own strategic plans, the task team is also developing costing models and tools. These will allow provinces and departments to integrate their costed plans with the development of their business plans and budgets.

Reaping the benefits

This kind of long-term technical assistance has a number of benefits. For example, it harmonises priorities, targets, and costings across national, provincial and local levels of implementation. It also ensures that budgets are based on detailed, realistic implementation plans. Finally, it allows for greater monitoring and evaluation of the plan’s financing and expenditure.

We will only see the benefits of this exercise if departments develop implementation plans that are truly practical. Over the long term the exercise will also require those carrying out the plan to commit to working with the Costing Task Team.

Activists and civil society alike have an important role to play here. We must first understand these processes and what we can do to influence them at national, provincial or district level. It is our responsibility to ensure that the implementation plans developed in our own provinces accurately reflect the true principles and goals of the NSP. We must then hold those implementing the plan to account for how they use South Africa’s resources.

If we do not actively take part in all aspects of the National Strategic Plan and its implementation—even the seemingly complex areas such as costing—we can never hope to truly take ownership of it.

by Daygan Eagar is a researcher with SECTION27 and a member of the SANAC Costing Task Team.