1. Executive Summary

1.1 Toby Ord, Senior Research Fellow in Philosophy at Oxford University, founder of Giving What We Can, and author of The Precipice.

1.2 In this response I particularly focus on the Committee question: ‘Is international aid effective at reducing poverty?’, but is also relevant to ‘Who decides what success looks like and how do we measure it?’ and ‘What do you think international aid should be for?’.

1.3 The effectiveness of aid varies dramatically. Some of the least effective interventions produce less than 0.1 percent of the value of the most effective. Some people don’t see cost-effectiveness as an ethical issue, but rather just an implementation issue. This is a mistake. People who decide how to spend health budgets hold the lives or livelihoods of many other people in their hands. Most decisions of this sort take dramatically insufficient account of cost-effectiveness. As a result, thousands or millions of people die who otherwise would have lived.

1.4 I recommend an active process of reviewing and analysing global health interventions to deliver the bulk of global health funds to the very best. I go into more detail below, and would be happy to discuss any aspect of this with the Committee.

2. Introduction

2.1 Global health interventions vary greatly in how effective they are. Many efforts have contributed in recent decades to huge decreases in mortality in low- and middle-income countries. While the health gains have been significant, there is still much room for improvement: many highly cost-effective health interventions are not adequately supported while global health donors and low- and middle-income governments continue to finance high-cost, less-effective health services.

2.2 Details on the costs and efficacy of health interventions are becoming more available, but a disconnect remains between the research and funding decisions made by donors and countries.

2.3 In the post-COVID era, there is likely to be limited potential for new or increased funding for global health in the coming years. This situation presents an opportunity to re-examine the ultimate objective of financing health interventions and how funding allocation choices can help to achieve these objectives.


3. The large variance in cost-effectiveness in global health

3.1 Cost-effectiveness is so important because it varies so much between different interventions. A standard measure for cost-effectiveness in health interventions is the Quality-Adjusted Life Year, or QALY (or the closely related idea of the DALY). It combines measurements of the quantity of life lost due to premature death with the quality of life lost due to morbidity or disability. For example, avoiding a healthy person dying 10 years sooner than they would have, is worth 10 QALYs, as would be curing blindness for the remaining 20 years of someone’s life (as years while blind are rated as about half the quality of years in full health). In the UK, NICE uses QALYs to determine which new medicines the NHS should fund, so as to maximise the health value given the budget.

3.2 QALY calculations cannot be perfectly precise — as our estimates of the badness different conditions are disputable and could be mistaken by as much as a factor of two. But the difference in cost-effectiveness between interventions is so much larger than this, that even a rough measure is more than adequate for making the key comparisons.

3.3 In a major study of more than a hundred different health interventions aimed at people in developing countries (DCP2), the best interventions were found to be about 100 times more cost-effective than the median intervention, which was in turn about 100 times more cost-effective than the worst interventions. I analysed this data and found that if you picked any two of these interventions at random, the better one was on average 100 times more cost-effective than the worse one. That means that funding the worse one would effectively waste 99% of the value that could have been produced.

3.4 One can view this as a challenge: failure to select from among the very best interventions can mean hundreds, thousands, or millions of additional deaths due to a failure to prioritize. Or as an opportunity: appropriately attending to cost-effectiveness will allow us to do so much more to transform people’s lives.

3.5 Even when other ethical issues in global health are very important in absolute terms, they are typically much smaller than this. For instance, it may be worse on equity grounds to treat a million people in a relatively affluent city than to treat the same number of people spread between the city and the relatively much poorer rural areas. However, it is not vastly worse— not so bad that 99 percent of the value is lost.

3.6 Learning how to correctly factor these other, more subtle, ethical issues into our decision-making is an important and challenging problem, but we are currently failing at a much more basic, more obvious, and more important problem: choosing to help more people instead of fewer people, to produce a larger health benefit instead of a smaller one.

4. Conclusion

4.1 In many cases, ignoring cost-effectiveness in global health means losing almost all the value that we could create. Thus there is a moral imperative to fund the most cost-effective interventions.

4.2 This doesn’t simply mean implementing the current interventions in the most cost-effective way possible for the improvements that can be gained within a single intervention are often small in comparison to those of choosing the between interventions. It also doesn’t just mean doing retrospective measures of the cost-effectiveness of the interventions you fund as part of program evaluation. Instead, it means actively searching the landscape of interventions that you are allowed to fund and diverting the bulk of the funds to the very best interventions. Ideally it also means expanding the domain of interventions under consideration.

4.3 The main effect of understanding this moral imperative toward cost-effectiveness is spending our budgets so as to produce greater health benefits, saving many more lives and preventing or treating more disabling conditions. However, it also shows a very interesting fact about global health funding. If we can save one thousand lives with one intervention and ten thousand with another at an equal price, then merely moving our funding from the first to the second saves nine thousand lives. Thus merely moving funding from one intervention to a more cost-effective one can produce almost as much benefit as adding an equal amount of additional funding.

4.4 It can be unintuitive to consider moving funding as almost as impactful as adding more funding, since this isn’t the case when one option is merely 10 percent or 30 percent better than another. However, when one option is 10 times or 100 times better, as is often the case in global health, redirecting funding is so important that it is almost as good as adding new funding directly toward the superior intervention. In the post-COVID era, when a lot of pressure and attention is directed to our budgets, it is good to know how much more can be done with existing funding.

4.5 The above does not mean one should only consider funding interventions where there is strong numerical evidence of the cost-effectiveness. There could well be many excellent interventions where such evidence cannot be provided (e.g. because there is no good way to measure the benefit, or it has never been tried before). The ideal portfolio of Aid spending may well involve substantial spending on areas where the cost-effectiveness cannot be ascertained. But one should remember that some of these un-assessable interventions are still probably hundreds of times more cost-effective than the others, and that the fact one cannot tell which is which is a significant downside when it comes to funding them.