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Chapter 4: Coping with the impact of AIDS.

WHILE SOME COUNTRIES STILL HAVE THE opportunity to avert a full-scale AIDS epidemic by acting early to change the behavior of those at highest risk, others already have large numbers of infected people across many groups in the population. Chapter 1 presented evidence of the terrible impact of HIV/AIDS on individual welfare, in terms of human suffering and losses in life expectancy. What can be done to mitigate the impact of the AIDS epidemic on people and society? There are many impacts of the AIDS epidemic that cannot be quantified--for example, the emotional pain experienced by infected individuals and their families and the psychological damage wrought on surviving family members. These impacts are very important, but how to respond to them is beyond our expertise and best left to others. This chapter considers the economic aspects of three types of impacts--on infected individuals, on the health sector generally, and on surviving household members--and the ways in which government policies can help people to cope, given the many other pressing demands for scarce public resources. (1)

The first part of the chapter shows that there are affordable, effective, and humane ways for governments in low-income countries to help ease the suffering of individuals infected with HIV However, both governments and individuals in the poorest countries should be wary of funding expensive treatments with uncertain benefits. The second part of the chapter suggests how governments can cope with the increased demand for and scarce supply of health care brought on by the AIDS epidemic in ways that are effective and compassionate, as well as fair and affordable. The third part proposes a strategy for developing countries to address the needs of poor families hit by the AIDS epidemic in the context of other poverty programs. The chapter concludes with a summary of the policy recommendations for governments attempting to cope with the impact of HIV/AIDS on health care and poverty.

Health Care for the Person with AIDS

WHAT IS THE HEALTH IMPACT OF HIV/AIDS ON AN infected individual over the course of the disease? Are there effective, affordable treatments for people with AIDS in low-income countries? To answer these questions, this part of the chapter reviews the many illnesses that often afflict people with HIV/AIDS, the available treatments, and their cost. It distinguishes between three types of care: relief of symptoms, such as headache, pain, diarrhea, and shortness of breath, which is sometimes called palliative care; prevention and treatment of opportunistic illnesses (OIs); and antiretroviral (ARV) treatments, which attempt to combat HIV itself. Next it presents the amounts that developing countries are actually spending to care for people with HIV/AIDS. While this amount is often large relative to a country's GNP per capita, it is usually too little to buy all the drugs needed to treat opportunistic illnesses, much less to pay for antiretroviral therapy. The section closes with a review of programs to assist with the home care of people with HIV/AIDS.

The discussion finds that although treatment of HIV itself is difficult and extremely expensive, some of the symptoms and opportunistic illnesses typically suffered by people with AIDS can be treated simply and at low cost. Some infectious diseases associated with HIV especially tuberculosis, are somewhat more expensive to treat, but because they are infectious there are sound reasons for governments to subsidize treatment of any infected individual who would not otherwise get treated, regardless of the individual's HIV status.

Palliative Care and Treatment of Opportunistic Illnesses

The pattern of opportunistic illnesses differs from country to country, depending on which diseases are prevalent, and the quality and amount of treatment available. The natural history of HIV illness and several of the most important opportunistic illnesses are defined in box 1.2. Figure 4.1 presents the proportion of AIDS patients who suffer from each of three OIs--tuberculosis, cryptococcosis, and Pneumocystis carinii pneumonia (PCP)--in six developing countries and the United States. Tuberculosis is most common in the three poorest countries, the Congo DR (formerly Zaire), India, and Cote d'Ivoire, becoming less common as per capita income rises. At the other end of the income gradient, PCP is most common in the United States, and is also common in the middle-income developing countries, Brazil, Mexico, and Thailand, but is rarely reported in the three lower-income countries. Cryptococcosis, a generic name for a group of fungal diseases that includes cryptococcal meningitis, shows no consistent pattern by income level, but infects at least 5 percent of people with HIV in all six countries. Among these three diseases, and indeed among all OIs, tuberculosis spreads most readily from people with HIV to others. As we discussed in chapter 1, tuberculosis greatly exacerbates the health impact of HIV in many developing countries, particularly in Africa and India, where it is the most common opportunistic infection.

Because of the variation in symptoms and in opportunistic illnesses, the cost and number of health care episodes for an HIV-infected person vary widely. Table 4.1 presents rough estimates for the average costs of pharmaceutical and inpatient palliative care of symptoms, prevention of tuberculosis and PCP, and curative care of the more common opportunistic illnesses. Estimated lifetime cost per patient for this care ranges from $300 to $ 1,000, depending on which drugs are used and the cost per day of inpatient care.

How effective are these treatments? In the early stages of HIV illness, palliative treatment can inexpensively relieve some of the pain, discomfort, and incontinence that otherwise rob people of the ability to enjoy life and contribute to their family and their community. Without symptomatic treatment, dehydration that results from diarrhea and nausea can kill in a few days. Fever and headache can be disabling for days or weeks. As shown in the top panel of table 4.1, drugs for palliative care are quite cheap. Hence, all but the poorest HIV-infected patients and their families are likely to be willing and able to buy these drugs, provided they are available. The sad truth is that these drugs are often not available, an issue we discuss below.

Moving down the table, we see that the opportunistic illnesses that commonly arise early in the course of AIDS can also be treated quite inexpensively. Treatment for thrush, toxoplasmosis, and pneumonia/ septicemia can buy one to four years of life at an additional drug cost of $30 to $ 150--all but the very poor would probably be willing and able to pay for these treatments.

Rarer opportunistic illnesses like the fungal diseases tend to occur later in the course of the HIV infection and are more difficult and expensive to treat. For example, in the United States the average life expectancy after diagnosis with cryptococcal meningitis, the most common of the cryptococcosis diseases, is 320 days, while in the Congo DR, perhaps because of later diagnosis, this drops to 180 days, even with expensive state-of-the-art drugs (background paper, Perriens 1996). Since a patient in the Congo DR might survive 30 days without treatment, such drugs would extend life by about 150 days for about $870. In Thailand

earlier diagnosis would result in treatment extending life by perhaps 330 days for $1,740. Many patients in these two countries might decide against buying these drugs, even if they have the money to do so.

In the final stage of AIDS, the immune system is so weak that a variety of infections spread throughout the body, leading to death. At this point, morphine to assuage extreme pain and the sensation of suffocation provides relief to the dying patient, and this in turn helps to ease the distress of the patient's family. If purchased in bulk at international generic prices, enough morphine to ease the last two weeks of life would cost less than $4. But because of international controls on morphine distribution, this essential drug is rarely legally available in poor countries at any price.

The foregoing discussion has shown that many of the symptoms and opportunistic illnesses that occur in the early stages of AIDS can be effectively treated at low cost. Unfortunately, the low-cost generic forms of the needed drugs are often unavailable; even when they are available, people often lack information about their efficacy. Thus, many people pay much more than the $ 10 to $20 cited in the table for palliative treatments, while achieving no additional benefit. Governments can address these problems by facilitating the availability of generic drugs needed for palliative care and common opportunistic illnesses. For example, countries with a concentrated or generalized epidemic could add these medications to their list of "essential drugs," which are widely distributed. Governments can also help patients to make informed decisions by ensuring access to reliable information about the efficacy of various treatment options, both pharmaceuticals and traditional remedies. The degree of government subsidy for treatment will depend on the country's overall health financing policy. We discuss this issue later in the chapter.

Antiretroviral Therapy Is Expensive, Uncertain

The treatments discussed above ease suffering and prolong life but ultimately fail to save the patient s life because none attacks the underlying cause of illness--the continued spread of HIV within the body and the consequent decline of the immune system's ability to recognize and repel biological threats. A few drugs have reduced the levels of HIV in the patients blood below the ability of laboratory tests to detect it. Unfortunately, these drugs are expensive and complex to administer, their long-term benefits are uncertain, and their efficacy varies greatly from one individual to another.

The first drug that showed evidence of inhibiting the spread of the virus in an infected patient was Zidovidine (AZT, or ZDV). When AZT was introduced in the late 1980s, the cost of a year's dosage was about $10,000 in industrial countries. By 1997 the cost of a year's dose had fallen to about $2,738 in industrial countries, while Thailand and a few other developing countries had negotiated bulk purchases for as little as $657 per patient per year. However, except for prevention of mother-to-child transmission, AZT rarely provided dramatic benefits, adding perhaps six months of healthy life for the average patient (Prescott 1997; Perriens and others 1997)

A more effective therapy involving the use of three antiretrovirals was announced in June 1996. A year later, the U.S. government issued draft guidelines recommending early, aggressive treatment of HIV-infected individuals with triple-drug therapy (Brown 1997). However, it was clear that more time would be needed before the new therapies could be fully assessed. Some individuals taking the medicines in clinical trials have dramatically improved their health and no longer have detectable levels of viral RNA activity. Yet even among these patients the virus may only be hiding and could re-emerge. And other patients show little or no reduction in viral levels, while still others cannot tolerate the drugs. As of mid-1997 no studies had yet been completed estimating the average percentage of patients who could benefit from triple-drug therapy or the characteristics of patients most likely to respond favorably--or to relapse.

Does triple-drug therapy offer reasonable hope for treating the disease in developing countries? Even if the therapy is shown to be generally effective, three substantial problems will remain: the cost of the drugs themselves, the costs and difficulty of the monitoring needed for the therapy to be effective, and problems with patient compliance. Although all of these problems also exist in industrial countries, they are likely to be especially severe in developing country medical settings.

Table 4.2 shows the cost of the drugs and necessary monitoring in Thailand, one of the few developing countries where the therapy is available, and the United Kingdom or United States, and hints as well at the great complexity of regimen. Because most of the drug costs and all of the monitoring costs are lower in Thailand than in the two industrial countries, overall costs are a minimum of about $8,000 per year in Thailand, compared with a minimum of about $12,000 per year in the United Kingdom and United States. These costs are likely to decline over time, perhaps substantially. But even if costs fell to one-hundredth of current costs, or about $80 dollars per person per year, they would still be several times the total annual per capita expenditure on health in many low-income countries. Moreover, effective antiretroviral therapy requires a highly trained, specialized physician working in a well-equipped clinic with experience performing a wide range of sophisticated tests and procedures, all of which are in critically short supply in most developing countries.

In the event that cost and infrastructure problems could somehow be overcome, patient compliance would continue to pose serious difficulties. Patients undertaking triple-drug therapy must swallow up to 20 pills a day according to a complex schedule related to sleep and meal times. Failure to follow the schedule increases the chance that the virus will become resistant or that the patient will be too sickened by the drugs to continue treatment. Even well-educated patients with good clinical support have difficulty adhering to this demanding regimen; moreover, patients in the early stages of HIV infection are sometimes not willing to take drugs that make them nauseous when they otherwise feel healthy. In clinical trials in industrial countries, for example, as few as 26 percent of patients complied with the instructions (Stewart 1997). Problems with patient compliance are likely to be worse in low-income countries due to lower education levels and the many other problems that poor people in developing countries face.

Even with all these difficulties and uncertainties, many patients in developing countries will ask their physicians for triple-drug therapy, just as patients have attempted to obtain AZT. Governments will in turn face pressure to buy these drugs and to subsidize the necessary clinical services. When very few people have AIDS, total costs will also be small relative to other government expenditures. But as the epidemic progresses, the number of AIDS cases and the cost of the subsidy will escalate rapidly, drawing resources from other pressing social needs. At some point it will become evident that such a subsidy is unaffordable and also unfair to the many people who for a variety of reasons want government help but do not have HIV.

Individual Treatment Costs for AIDS Are High, Even in Poor Countries

We have seen that medical responses to HIV/AIDS range from a few pennies to thousands of dollars. How much a country actually spends to treat a case of AIDS depends on many factors besides the differing cost of health care inputs. The most important of these is the amount of treatment that the HIV-infected person, his or her family, and any third party payers such as insurance companies or the government are willing and able to buy, and how much the government subsidizes health care and AIDS treatment. Figure 1-8 showed that across countries this amount is strongly correlated with per capita income. An in-depth study of AIDS expenditure in four countries and Sao Paulo State, Brazil, confirms this general pattern; the average total (public and private) AIDS expenditure varies from 0.6 times per capita GDP in Tanzania to 3.0 times per capita GDP in Sao Paulo; the average is a ratio of about 1.5 (backgroundpaper, Shepard and others 1996).

Alternatives to Expensive Inpatient Care

Where the AIDS epidemic is severe, health policymakers inside and outside government have sought ways to provide compassionate care at low cost. Three alternatives to expensive inpatient care are outpatient AIDS clinics, hospice care (residential low-technology care for the terminally ill), and home-based care.

One innovative program to deliver high-quality treatment of symptoms and opportunistic illnesses without the expense of hospitalization was an outpatient clinic started in 1989 in Sao Paulo, Brazil. Such clinics are especially well suited to serve urban HIV-positive and AIDS patients who are able to leave their homes. Later in the course of the disease, when the patient is less mobile, the hospice or nursing home provides a lower-cost substitute for inpatient care in a sophisticated referral hospital. However, since such facilities are rarely available in developing countries, the main alternative to the hospital is care at home.

What sort of home-based care is most effective? An analysis of the cost of eight home-based care programs in Zambia found that community-initiated programs were more effective and much less expensive than hospital-initiated programs (Chela and others 1994; Martin, Van Praag, and Msiska 1996). Assuming that the average patient with AIDS would survive six months with either type of care, the benefits of the care must be measured in reductions of hospitalization cost; reduced travel time to the hospital for the patient and the patient's caretakers; increased patient satisfaction and comfort; and ancillary benefits to the community, such as improved understanding of the ways to prevent AIDS and decreased stigma toward HIV-positive people. Since the study found that patients who received home-based care reduced their hospitalization before death by only two days, the expenditure on the hospital-initiated home-based care programs of about $312 (6 months x 2 visits per month x $26 per visit) was much more than the $14.50 saving in hospital charges (2 days x $7.25 per day). On the other hand, the costs for six months of community-initiated home-based care averaged just $26, less than one-tenth the cost of the hospital-initiated program, and could almost be justified on the basis of reduced hospital use alone.

The tenfold cost difference between hospital- and community-initiated home care programs was due to the much larger expenditure on transport and staff time for the hospital-based programs. For example, on a typical day a team of trained hospital-based nurses could visit only four to eight patients, about a quarter of whom were away from home when the team arrived. As a result the hospital-initiated teams spent on average about two hours on the road in order to spend only fifteen minutes with the patient. In contrast, the community-initiated teams walked only a few minutes and spent an average of two hours with the patient.

If the low cost of the community-initiated home-based care program in Zambia can be generalized to other settings, it is possible that such care would be financed by the patients, their families, and their communities. Indeed, the community-initiated Zambian programs function well because of strong volunteer support from the local communities. Since the benefits of the program include the public ones of improved knowledge about HIV prevention and reduced stigma, there may be a government role in financing such programs, at least until their private benefits to patients' families are sufficiently well understood for these families and communities to support such programs on their own. Where policies exist to facilitate access to health care for the poor, they should be extended to include community-based home care programs using the same eligibility criteria.

Difficult Health Policy Choices in a Severe AIDS Epidemic

THE PREVIOUS SECTION DESCRIBED THE IMPACT OF AIDS ON the individual HIV-infected person and demonstrated that limited treatment of symptoms and opportunistic illnesses, especially when performed partly by community-initiated home care programs, can provide compassionate care at relatively low cost. In this section the need to keep costs low becomes more apparent as we widen the focus from the individual HIV-infected person to the health care needs of all people in a country. To better understand the difficult tradeoffs involved, we first estimate the magnitude of the impact of AIDS on the health sector, and then discuss how government policies can mitigate this impact.

How HIV/AIDS Will Affect the Health Sector

AIDS will affect the health sector in two ways: by increasing demand and by reducing the supply of a given quality of care at a given price. As a result, some HIV-negative people who would have obtained treatment had there been no epidemic will be unable to do so, and total national expenditure on health care will rise, both in absolute terms and as a proportion of national product. (2)

Increased demand for care. Most people who develop AIDS are prime-age adults. Without AIDS, this 15-to-50 age group accounts for only 10 to 20 percent of all deaths in a developing country, but these deaths typically generate a disproportionate share of total health care demand (Over, Ellis, Huber, and Solon 1992; Sauerborn, Berman, and Nougtara 1996). Moreover, since several studies suggest that adults with AIDS use more health care prior to death than those who die of other causes, or even of other prolonged illnesses, the percentage increase in the demand for care by adults is likely to exceed the percentage increase in their mortality due to AIDS. As a result of these two factors, in a country where prime-age adults utilized one-quarter of all health care before AIDS, a given percentage increase in their demand for health care will increase total demand by at least one-quarter of that percentage. For example, a 40 percent increase in the mortality rate of prime-age adults will increase total demand by at least 10 percent, even though total mortality has increased by only 4 percent to 8 percent. (3) If AIDS patients use expensive antiretroviral therapies, the increase in demand will be much greater.

How much the demand for care increases in the aggregate depends on the increase in the prime-age adult death rate, which in turn depends on the level of HIV prevalence and the median time from infection to death (table 4.3). A stable prevalence rate of 5 percent among prime-age adults eventually increases their annual mortality by about five deaths per 1,000 adults if the median time from infection to death is ten years, or by about ten deaths if the median time is only five years. (4) A prevalence rate of 30 percent, such as is observed in Lusaka, Zambia, will increase the number of deaths per 1,000 adults by 30 to 60, depending on the median time to death. In Sub-Saharan Africa, where mortality rates in this age group were as high as five per 1,000 before the epidemic, even a 5 percent infection rate will double or triple the adult death rate. In a middle-income developing country with adult mortality of one per 1,000, the same endemic level of HIV infection will increase prime-age adult mortality five- or tenfold.

Given these parameters, how much will the epidemic increase the demand for care? In a country where adults consume one-quarter of health care prior to the AIDS epidemic, HIV prevalence is constant at 5 percent of adults, the median time to death is ten years, and the baseline mortality rate among prime-age adults is 5 per 1,000, the epidemic will cause a 26 percent increase in the demand for health care at every price. (5) If the prevalence rate is higher, the median time to death shorter, or the baseline adult mortality rate smaller, the percentage increase in demand will be correspondingly greater.

A final important factor that may increase demand is insurance. This may take the form of private insurance, a government-run insurance program, or, more typically, health care financed through general taxation. Because a portion of health care costs is often covered by one or more of these types of insurance, the price paid by the patient is usually a fraction of the cost of providing the care. Since insurance enables patients to purchase more care than they would otherwise, it increases the demand for care arising from any given level of illness, thus magnifying the price shock of an AIDS epidemic. For example, if the proportion of cost of providing care paid by patients (i.e., the coinsurance rate) is 25 percent, patients will reduce their utilization in response to increased cost by only a quarter as much as they would if they had to pay the full increase.

Reduced supply of health care. In addition to increasing the demand for care, the AIDS epidemic will reduce the supply available at a given price, in three ways. The magnitude of these effects, discussed below, will generally be larger in the poorest countries with the largest epidemics.

The first and largest effect is the increased cost of maintaining a given level of safety for medical procedures. Even without HIV, hospitals and clinics in poor countries may pose a risk to health. Needles and other instruments are not always sterilized, rooms are often overcrowded and poorly ventilated, and care providers may lack rubber gloves and sometimes even soap. Without modern blood banks, a transfusion might infect the recipient with hepatitis B. In such situations, infections of all types spread rapidly; some, including such common illnesses as pneumonia, may kill. Before HIV, however, infections picked up in a clinic or hospital were rarely fatal to persons not already in a seriously weakened state. (6)

Because the AIDS epidemic has greatly increased the risk to patients of existing medical procedures, simply maintaining the level of safety that existed before HIV requires additional hygiene and blood screening, both of which increase the cost of care. In middle- to high-income countries, where blood screening and sterilization of injecting equipment are already the norm, the impact of AIDS is confined to the incremental costs of adding an HIV test to existing tests and using rubber gloves and face masks in situations where they were previously not used. In poor countries, where blood screening and needle sterilization were lacking before the epidemic, the resources needed to maintain the quality of care in the face of the AIDS epidemic can be substantial. For example, the annual recurrent budget of the Ugandan Blood Transfusion Service, which was established in response to the epidemic and meets the demands of the entire Ugandan national health care system for clean blood, is estimated to be about $1.2 million, including capital and recurrent costs. This amounts to about 2 percent of national public health expenditures or about 1 percent of total national health expenditures (European Commission 1995a). Despite the potentially high costs of blood screening, HIV has greatly increased the justification for a government role in ensuring a safe blood supply. However, there is no convincing rationale for government to subsidize the entire cost of running such a service indefinitely (see box 4.1). Blood screening and improved collection procedures will protect blood donors and recipients. However, since average donors and recipients do not engage in unprotected sex with a large number of partners, a person infected while giving or receiving blood is not likely to pass the infection to many others. Thus, in developing countries where the cost of establishing a safe blood supply is high, blood screening will not be among the more cost-effective approaches to preventing an epidemic based on sexual transmission (see box 4.2).

To be sure, blood screening and better hygiene will help to prevent the spread of other infectious diseases besides AIDS. Such measures will also reduce the occupational risk of AIDS and other diseases that health care workers face, and therefore reduce the amount of additional compensation needed to offset their occupational risk--an issue we discuss below. A careful accounting of the net cost of protecting patients from HIV by screening blood would need to take into consideration these additional benefits, for which data are lacking. However, it seems likely that even if these benefits are taken into account, the remaining cost of screening blood and improving hygiene to protect patients from HIV/AIDS would substantially increase the unit cost of medical care.

The second factor reducing the supply of medical care at a given price is the increased attrition of health care workers who become infected with HIV. Like all adults, health care workers may become infected with HIV as a result of sexual contact or use of unsterile injecting equipment. They also face an additional risk of becoming infected in the course of their work; however, this risk is generally much smaller than the risk from sexual contact. Thus whether the AIDS mortality rate among health care workers is higher or lower than among the general population depends mostly on the effects of income, education, and social status on sexual behavior. Two studies of HIV prevalence among health care workers from Africa suggest that doctors and nurses are at least as likely to become infected as other people (Mann and others 1986, Buve and others 1994). If this is true elsewhere, a country with stable 5 percent HIV prevalence can expect that each year between .5 and 1 percent of its health care providers will die from AIDS; a country with 30 percent prevalence would lose 3 to 7 percent of its health care workers to the epidemic. This attrition from AIDS deaths may substantially increase the cost of health care. For example, if labor costs are half of total health care costs, and training or recruiting a replacement worker requires a one-time expenditure equal to the workers annual salary, then a 7 percent increase in attrition will increase total costs in the health sector by 3.5 percent.

Box 4.1 The Government Rote in Ensuring Clean Blood

THE HIV/AIDS EPIDEMIC HAS DRAMATICALLY
increased the importance of clean blood. Where the
most serious common infection that a transfusion
recipient previously had to fear from unscreened
blood was hepatitis B, which is rarely fatal and communicated
in only about 2.5 percent of unscreened
transfusions, recipients in some countries now face a
one-fourth chance of HIV infection (Emmanuel.
WHO, as cited in Fransen, personal communication.
As a result of the HIV/AIDS epidemic, the
transfusion required for a surgical procedure or
childbirth that might have been relatively routine in
a developing country ten years ago now requires the
guarantee of clean blood to be equally sate.

What should be the government's role in the provision
of safe blood? Setting aside poverty, which is
addressed in the test, five justifications can be identified
for the public to subsidize or otherwise play a
role in the provision of blood: (1) to present HIV
infections in blood recipients: (2) to prevent infections
in the sexual partners of blood recipients; (3) to
avoid the sudden onset within a community of the
health risk from unscreened blood; (4) to provide
the economies of scale that apply to a blood bank
service; and (5) to avoid the difficulty that a citizen
would have in judging the quality of a blood bank.

While a high-quality blood bank will obviously
be quite effective in preventing the transfusion of
infected blood, and thereby in preventing the hospital
from infecting transfusion recipients, this fact
does not, by itself, imply that the government
should play a role in supplying the clean blood.
Setting aside for the moment considerations (2)
through (5), the provision of clean blood is comparable
in importance to the provision of clean needles,
clean bandages, and clean hands of the nurses
who change those bandages. Any arguments for government
financing of decent quality of care, including
basic cleanliness in the hospital, also apply to
clean blood. If one accepts the argument that hospital
care is a basic need, which should be heavily subsidized
by the government, then the same argument
would apply to clean blood. If, however, one believes
that there is no obvious reason to favor curative
health care over other necessities, such as
clothes, housing, and clean water, then clean blood
should receive as little subsidy from the government
as other curative health care services.

Yet even those who believe that most curative
care deserves little subsidy admit that the treatment
of infectious diseases confers positive externalities
and thus should be subsidized. This brings us to an
evaluation of the second consideration. Assuming
that transfusion recipients recover from the medical
procedure and then become sexually active, preventing
their infection may prevent them from infecting
others. How large are these positive externalities:
For one country. Uganda, box. 4.2 shows that a
highly effective program prevented
517 secondary infections in 1994 at a cost of $1,684 each. While
this cost is much less than the lifetime treatment
cost of an HIV-infected person in an industrial
country, it is more than any reasonable estimate of
the cost of preventing secondary infections in
Uganda. Thus, the prevention of secondary infections
does not appear to be sufficient to justify government
subsidy of the entire cost of the program,
although it could justify a partial subsidy.

Considerations (3) and (4) appeal to the same
economic arguments often used to justify government
infrastructure investments. The sudden
increase in risk from blood transfusion is a shock to
the health care system, too rapid for individuals and
private institutions to make new blood-screening
arrangements quickly. As the insurer of last resort
against catastrophic changes in the environment, the
government has a role in assisting society in adjusting
to the new higher cost and complexity of health
care in the presence of AIDS. Furthermore, as
demonstrated by box: figure 4.1, a blood transfusion
service entails substantial economies of scale. Since a
single transfusion service can serve all local needs
without exhausting its economies of scale, it would
be a natural monopoly without the fear of competition
to ensure quality service at the best price. It
would be forced to charge prices above marginal cost
in order to cover its costs and might charge prices
well above average costs in order to maximize its
profits. Just as for electric utilities and other natural
monopolies, there is a well-established justification
for government intervention to regulate, it not own
and operate, them in such circumstances. However,
they do not justify a 100 percent subsidy for blood.

Consideration (5) involves the inability of the
public to judge the quality of a blood bank. This
argument is not particular to blood transfusion services,
since patients have an equally difficult time
judging the quality of their physicians. (1) Yet patients
can choose among many different physicians, but,
because of the economies of scale, are unlikely to
have a choice of blood banks. The government and
the public should not assume that any monopoly,
whether it produces electricity of blood bank services,
and whether it is "for-profit" or "nonprofit.'
will indefinitely perform in the public s best interest.
In this situation there is an argument for the establishment
of a regulatory board to whom the blood
transfusion service is responsible. (2) The board should
consist of representatives of the medical establishment,
government, and patients and should produce
an annual report on the quality of the blood bank
service, which should then be widely disseminated
in the press.

[BOX FIGURE 4.1 OMITTED]

In sum, the appropriate role of government in
financing blood supplies depends first on one's view
of the degree of financing the government should
provide to curative health services. The argument
for curative services extends directly to the provision
of blood. The number of secondary infections
averted through blood screening is unlikely to be a
powerful argument for government subsidies. Even
so, there is a strong argument for the government to
launch and nurture a blood bank service as a subsidized
"infant industry," before subjecting it to the
rigors of the financing arrangements provided for
the test of the health circ system. Finally, because
economies of scale will tend to make the blood bank
a monopoly in most communities, blood bank services
should be subject to strict regulatory review.

(1) Information is asymmetrically distributed between the firm
producing and selling blood and the hospitals physicians or
patients who consume it.

(2) While patients should be charged the same percentage of the
marginal cost of a unit of blood that they are charged for other
curative care of non-infectious diseases, it does not follow that
donor should be paid for blood. The observation, by Richard
Titmus (1972) regarding the benefits of recruiting voluntary
donors have been found in apply in may different national
settings.

Box 4.2 Cost of Preventing Secondary HIV Infections through Blood
Screening in Uganda

HOW COST-EFFECTIVE IS BLOOD SCREENING IN
preventing secondary HIV infections? One answer
to this question can be seen in the results of the
Uganda Blood Transfusion Service (UBTS) for
1993. Having established its ability to supply
Kampala with clean blood in 1991, by 1093 the
UBTS was teaching out to cover the entire country
That year the service transfused 20.156 patients
throughout the country at an average cost of approximately
$38 per unit of blood, and an average
of 1.2 units per patient, for a total budget of approximately
$929.900. Box table 4.2 breaks out the HIV
prevention benefits of the service, showing that its
use averted HIV infection in an estimated 1.863
surviving transfusion recipients.

But to measure the positive externalities of the
program, and thus the rationale for government subsidies,
we need to look beyond these primary infections
to consider secondary infections. Children who
are infected by transfusion are unlikely to live long
enough to infect others, but some of the adults may
be sufficiently young and sexually active to engage in
risky sexual behavior later in their lives. Since many
of these people are quite sick, the evaluation study
estimated that each of these adults would have only a
50 percent chance of infecting one other person with
HIV European Commission 1995. Thus the total
number of secondary infections averted would be
415. (1) It the entire justification of the blood supply-service
is prevention of these secondary infections,
the cost-effectiveness of the service is $929.900 divided
by 415, or $2.240 per such infection averted.
If Uganda had had a sustainable blood supply system,
the cost of preventing these 415 infections
would have been only $319,894, or $771 each. This
much smaller amount is still substantially larger than
the cost of preventing secondary infections in other
ways (see box 2.6).

(1) The authors point out that the counselling provided to blood
donors may have averted additional primary infections European
Commission 1995. And secondary infection, averted through
this route should be added to the 415 to compute the total positive
externalities of the program.

Box Table 4.2 Effectiveness of Blood Transfusion at Averting
HIV Infection, Uganda, 1993

                                               Benefits

Effects of blood transfusions        Children   Adults   Total

Patients transfused                  11,515     8,641    20,156
Patients expected to die without
  transfusion                         5,758     3,898     9,656
Patients who died despite
  transfusion                         3,801     2,592     6,393
Number of deaths prevented            1,957     1,296     3,253
Number of primary HIV infections
  prevented                           1,033       830     1,863
Number of secondary HIV infections
  prevented                               0       415       415

Source: Based on the results achieved by the Ugandan Blood
Transfusion Service as reported in Beal, Bontinck, and
Fransen (1992); European Commission (1995a); and Fransen (1997,
personal communication).

The third way in which AIDS reduces the supply of health care is through the additional risk it imposes on health care workers. Even though most HIV-infected health care workers acquire their infection through sexual contact, in a society with a large proportion of HIV-positive patients, health care work will be more dangerous than if there were no HIV. Some students who would have become doctors and nurses will therefore choose alternative occupations, unless they are compensated with higher pay for the increased risk. A recent survey of medical and nursing students in the United States found that AIDS had indeed reduced the attractiveness of specialties in which contact with HIV-positive patients was more likely (Bernstein, Rabkin, and Wolland 1990; Mazzullo and others 1990). This problem is likely to be most severe in hard-hit developing countries, where HIV prevalence is much higher and rubber gloves and other protective equipment are often in short supply. In Zambia, for example, some nurses have demanded special payments to compensate for increased occupational risk due to HIV (Buve and others 1994).

The magnitude of increased costs of medical staff has not been estimated. As noted above, improved precautions in hospitals and clinics may reduce these costs. But because people respond to perceived risk rather than actual risk, such improvements may have little impact on the demand for increased compensation. Thus, it seems clear that health care workers' perception of risk will increase the cost of care.

The total impact of these three effects--increased cost of preventing infection in medical facilities, attrition of health care workers due to HIV, and additional pay that health care workers demand to compensate them for increased risk--will depend most importantly on HIV prevalence and whether modern blood banks and hygiene were already in place. In a country that has 5 percent HIV prevalence among prime-age adults and lacked blood banks and blood screening before the epidemic, a conservative guess is that the cost of providing care of a given quantity and quality will rise by about 10 percent.

Scarce care, higher expenditures. Taken together, increased demand and reduced supply have two related impacts: first, health care becomes scarcer and thus more expensive; second, national health care expenditure rises. The size of" the increases in health care prices and national health care expenditure depends partly on the price-responsiveness, or "elasticity," of the demand for and supply of care. For most goods, higher prices reduce demand, as consumers switch to substitutes or forgo an intended purchase altogether. This same principle holds true for health care, but the price-responsiveness or elasticity of demand for adult health care is usually small, since there are no close substitutes, and people who are sick and who have the ability to pay will often pay whatever is needed to get well. For the purposes of our simulation, we assume that a price increase of 8 percent would decrease utilization by only about 8 percent, for an elasticity of 0.8. (7)

Higher prices also generally increase supply. Here, too, however, the nature of the health sector affects the supply response. In the very short run, perhaps a month, the supply of care is unlikely to change much. Over the long run, the supply of physicians and inputs to health care can expand as much as necessary. Over the medium run, five years or so, we would expect the supply of care to respond somewhat to increased demand and the resulting higher price. One response observed in Canada, Egypt, India, Indonesia, and the Philippines is that physicians who work in the public sector rearrange their schedules to offer more health care privately, after their obligations to the government have been met. The elasticity of this response has been estimated at about 0.5, meaning that every 10 percent increase in the price of care elicits a 5 percent increase in supply (Chawla 1993, 1997; Bolduc, Fortin, and Fournier 1996).

We have argued in the previous two subsections that a constant 5 percent seroprevalence rate would eventually increase the demand for care by about one-quarter and the cost of care of a given quality by 10 percent. Drawing on the assumptions in this subsection about the elasticities of the demand and supply responses, and assuming that patients pay half the cost of health care, box 4.3 shows that total national health expenditure, and also the government's share of expenditure, would both increase by about 43 percent. The increase would be less in a country like India, where only about one-fifth of the cost of care is paid by the government, and substantially more in countries like those of Latin America and Eastern Europe, where three-quarters or more of the cost are subsidized.

Box 4.3 Estimating the Impact of AIDS on the Health Sector

HOW MUCH WILL THE EFFECTIVE PRICE OF CARE
increase as a result of AIDS: Box figure 4.3 demonstrates
how the approximate size of these increases
can be estimated tot a hypothetical country with
elasticities of demand and supply for health care of
0.8 and 0.5 and a government policy to subsidize
hall of the cost of care. The two solid lines show the
amount of health care that is demanded and supplied
at each price prior to an HIV epidemic. The
demand curve is drawn with an elasticity of only 0.4
in order to incorporate the effect of the government
subsidy on consumers. The figure is constructed so
that the market equilibrium occurs at a price of 10
currency units per unit of health care, at which a
total of 10 units of care are delivered. Total health
care expenditure in this hypothetical country is thus
10 times 10 of 100 currency units in the absence of
the AIDS epidemic.

[BOX FIGURE 4.3 OMITTED]

Now assume there is an HIV/AIDS epidemic
that levels off at a constant seroprevalence of 5 percent
of the adult population. The arguments in the
chapter suggest that the amount of health cue
demanded at every price is likely to increase by 25
percent, while the cost of purchasing any given
amount of care of a given quality will increase by 10
percent. These two impacts of the AIDS epidemic
are illustrated by a rightward shift of the demand
curve by 25 percent (to the dashed, downward-sloping line)
and an upward shift of the supply curve
by 10 percent (to the dashed, upward-sloping line)
The impacts on the equilibrium price and quantity
can be read from the figure. The price of a unit of
health care will increase about 30 percent, and the
amount of care provided will increase about 10 percent.
Total national expenditure, the price per unit
of care times the number of units, will increase 43
percent to 143 currency units (since 13 x 11 = 143)

We have seen that a third-parry payment, such as
insurance or a government subsidy tot treatment,
makes people less sensitive to changes in cost of
health care By reducing the price elasticity of demand,
such third-party payments make the demand
curve steeper, both before and after the introduction
of AIDS.

Does the available empirical evidence support these conclusions? Although there are significant data problems, the short answer is yes.

Measuring the scarcity of medical care through changes in the price of care of given quality is problematical because of the difficulties in measuring quality. This is especially true in developing countries, where a general lack of data is compounded in the health sector by government subsidies and nonprice forms of rationing. In such cases, the effective price of care may rise even though nominal prices remain constant (see box 4.4). Furthermore, because of the lag between infection and death, the time between the attainment of a given HIV prevalence rate and the full impact of that rate on the demand and supply of health care can be ten to 20 years. For these reasons, we cannot accurately assess changes in scarcity of health care in developing countries by observing changes in nominal price. Nonetheless, we can get some sense of the extent to which HIV/AIDS increases the effective price of health care by considering whether the epidemic makes it more difficult to obtain care. Studies of hospital admissions data strongly suggest that this is the case.

Table 4.4 shows the percentage of beds occupied by HIV-positive patients in six referral hospitals in developing countries with large epidemics. The hospitals are the top health care institutions in each country, providing the best care available outside of a few expensive private clinics. Because these hospitals are at the apex of their health care pyramids, we would expect that AIDS patients account for a significant proportion of their patients. Even so, the percentage of beds occupied by HIV-positive patients is striking, ranging from 39 percent in Nairobi, Kenya, to 70 percent in Bujumbura, Burundi.

Box 4.4 The Effective Price of Care

SOME READERS MAY OBJECT THAT THE PRICE PAID BY
patients need not increase in countries where the
government guarantees free care. However, as we
have seen, even with HIV prevalence rates of 5 percent
or less, die demand for medical care is likely to
increase faster than the government s ability to supply
it. When this happens, means of rationing medical
care other than price come into play. People in
countries where health care is officially "free" are
familiar with these mechanisms. Some systems rely
on waiting time. In others, a patient dissatisfied with
inferior care in a public facility can pay for better
care during a doctor's private office hours. In still
other cases, side payments to a nurse or other gate-keeper
are necessary in order to get access to "free"
care. The effective price of health care to the consumer
is the value of all of the consumer s sacrifices,
in time and in money, needed to obtain care of a
given quality. The AIDS epidemic increases the
effective price, even it care is supposedly "free".

If the hospitals were operating well below capacity before the epidemic, they might have accommodated the HIV-positive patients without reducing care for HIV-negative clients. Although no data on occupancy prior to the epidemic are available for these specific hospitals, bed occupancy rates in such hospitals typically were well above 50 percent even before AIDS. (8)

The best evidence that AIDS is making it more difficult for people not infected with the virus to get medical treatment comes from an in-depth study of Kenyatta National Hospital (KNH), the premier teaching hospital in Nairobi, Kenya. The KNH study compared all patients admitted during a sample 22 days in 1988 and 1989 with all patients admitted during a sample 15 days in 1992 (Floyd and Gilks 1996). Panel A of figure 4.2 shows that while the average number of patients admitted per day increased from 23 to 25, the number of HIV-positive patients more than doubled, while the number of HIV-negative admissions shrank by 18 percent. Since the number of HIV-negative people in the hospital's "catchment area" could not have shrunk by this much, this evidence suggests that the AIDS epidemic did in fact result in some HIV-negative patients being dissuaded or barred from admission to the hospital.

There are no data on what happened to the HIV-negative patients who were not admitted. But hospital records show that the mortality rates for those who were admitted increased between the two periods, from 14 to 23 percent (panel B of figure 4.2). The mortality rate for the HIV-positive patients did not increase, and other indicators of the quality of care remained constant. Thus, the most likely explanation for the increased mortality rate among the HIV-negative patients is that the rationing scheme used to allocate increasingly scarce beds had the effect of changing the mix of HIV-negative patients toward those with more severe illnesses. Whether the rationing was imposed by hospital staff or was a response by prospective patients to their perception of a higher effective price of care (box 4.4), it is likely to have excluded some patients whose lives the hospital could have saved.

[FIGURE 4.2 OMITTED]

Since the HIV-infected make up an increasingly large fraction of the sick people in a severely affected country, it is appropriate that they occupy an increasing share of hospital beds and consume an increasing share of health care resources. The pressure of this increased demand for care will naturally be felt by all citizens, whether or not they are HIV-infected. However, the extent of the shift in health care resources away from the HIV-negative can be exaggerated, as indeed it may have been in Kenyatta National Hospital, if the government provides special subsidies for people with HIV. (9) We discuss this issue, and the broader issue of how the level of government health care subsidies affects the demand for care and health care expenditure, in the next section.

Policies To Mitigate the Impact on the Health Sector

Scarcer and more expensive care and increased total health expenditure present society with difficult choices. Because a large share of the increased expenditure is typically financed through tax revenues, governments and their constituencies will confront tradeoffs along at least three dimensions:

* treating AIDS versus preventing HIV infection

* treating AIDS versus treating other illnesses

* spending for health versus spending for other objectives.

The need to confront these difficult choices can be reduced somewhat if a government is willing and able to increase tax revenues. But few countries will be able to avoid the choices entirely, especially developing countries facing a severe epidemic. Unable to pay for everything, most governments will subsidize some goods and services more than others, thereby disproportionately benefiting certain groups of citizens.

As the number of AIDS cases increases, governments are likely to face mounting pressure for two responses that on first consideration seem rational and humane. One is to pay a larger share of health care costs; the other is to provide special subsidies for the treatment of HIV/AIDS. Unfortunately, these responses can have unintended consequences. For reasons discussed below, governments that wish to minimize the impact of HIV on the health sector should try to avoid both courses of action. However, this does not mean that governments should do nothing to help alleviate the suffering caused by HIV/AIDS. The section concludes with a list of compassionate and affordable measures that governments can and should undertake to mitigate the health sector impact of an HIV/AIDS epidemic.

No increase in the overall subsidy to health care. One obvious and politically appealing response to the HIV/AIDS epidemic is to increase the government share of health care costs and thus the overall subsidy for health care. Such a course of action may be especially attractive early in the epidemic, when few people are sick with AIDS. There is an argument for it on economic grounds as well: it would fill the gap created by the failure of the private market to offer health care insurance in poor countries. However, increasing the subsidy to curative care increases the demand for a limited supply. As a result, both effective price and total expenditure will rise by a greater proportion than the increased subsidy alone, or the increased demand arising from the epidemic alone, or even the sum of the two, would suggest. As more and more people become sick with AIDS, this effect becomes evident in escalating health care expenditures; in a severe epidemic, the burden on the government budget is likely to become unsustainable.

To understand how changes in the level of government subsidies affect the impact of the epidemic on the health care sector, we first look at the extent to which governments already subsidize care. Then, taking India as an example, we project the impact of an expanding epidemic at the current subsidy level and an increased subsidy level. As we shall see, increasing the overall subsidy to care can greatly exacerbate the impact of the epidemic on the health sector.

Most governments subsidize a large share of health care expenditures. The balance includes payments by private insurers and all "out-of-pocket" payments at private or government-subsidized facilities, whether traditional or modern. The average overall subsidy to health care varies widely but generally rises with GDP. As can be seen in figure 4.3, the poorest countries, with average per capita income of about $600, typically subsidize less than half of the cost of health care, while upper-income countries subsidize about three-quarters of the cost.

[FIGURE 4.3 OMITTED]

[FIGURE 4.4 OMITTED]

In India in 1990 the government subsidized about 21 percent of total health care expenditures, a small share even compared with other low-income countries. The bottom line of figure 4.4 projects government health expenditure if India were to have no AIDS epidemic and continued to spend 6 percent of a constantly growing GDP on health care, of which the government continued to finance 21 percent. In this baseline scenario, India's government health expenditures grow from $3.2 billion in 1991 to $8 billion in 2010. The second line from the bottom shows the increase in government health spending if India's current steep rise in HIV prevalence continues until 2000, then levels off at a stable 5 percent. This is about the growth in prevalence seen in countries such as Zambia and Botswana, where focused prevention was not implemented early in the epidemic. The result in India would be to increase the government's expenditure on health in the year 2010 by about one-third, from $8 billion to $10.5 billion.

What if India in 1990 had increased health care subsidies to about 50 percent, the level seen in many Latin American countries? The top pair of projections in figure 4.4 shows the impact of the higher subsidy on expenditure. Even without an AIDS epidemic, expenditure more than triples to $11 billion in 1991 due to the more than doubling of the government's share of existing expenditure combined with the demand stimulus caused by the greater subsidy. Subsequent growth of health expenditure proportional to GDP brings health expenditure to $27 billion in 2010 (third line from the bottom). Now again suppose a serious AIDS epidemic that reaches a stable 5 percent HIV prevalence rate in 2000. The fourth line from the bottom of figure 4.4 gives the projected result: health expenditures in 2010 would reach $39 billion. Thus, not only has the increased subsidy tripled health care spending, as might have been expected, but it has also increased the vulnerability of the budget to the AIDS epidemic, adding $12 billion (43 percent of $27 billion) rather than just $2.5 billion (31 percent of $8 billion) to government health care expenditures.

The large expenditure shocks that will result from the AIDS epidemic will create new pressures on health budgets, especially in countries that enter the AIDS epidemic with higher subsidy rates. For example, although Mexico's infection rate was estimated to be only 0.4 percent in 1994 and it subsidized only 49 percent of the cost of AIDS treatment, compared with 76 percent for other sicknesses, AIDS was already consuming 1.2 percent of its health budget. In contrast, Tanzania has kept the subsidy rate for AIDS treatment down to 28 percent in line with the subsidy it provides to other illness categories. As a result, despite a prevalence rate of 5 percent, more than ten times higher than Mexico's, the AIDS share of total government health care expenditure is only 3.5 percent, just three times larger in Tanzania than in Mexico. (10)

Although a discussion of the design of health financing systems is beyond the scope of this book, the evidence suggests that countries in the nascent or concentrated stages of the epidemic, like India, should carefully consider not only the immediate budgetary consequences of any expanded commitment to fund curative care, but also the multiplication of these consequences that would occur if the AIDS epidemic spreads. A prudent course would be to consider any expansion of government-financed health care subsidies or insurance only in conjunction with vigorous prevention programs that enable people most likely to contract and spread HIV to protect themselves and others.

Equal subsidy rates regardless of HIV status. A second common health sector response to the HIV/AIDS epidemic is to offer a different subsidy rate depending on whether or not the person receiving care is infected with HIV. Especially in the countries in the nascent stage of the epidemic, HIV-infected people all too frequently experience discrimination, including restricted access to or higher effective prices for health care. As the epidemic advances, however, governments are often pressed to provide special subsidies for the treatment of HIV/AIDS. This section points out the government's role in limiting discrimination against the HIV-infected in health care settings and then considers the consequences of preferential subsidies for HIV treatment.

AIDS treatment subsidies vary greatly from country to country. Figure 4.5 presents data on the percentage of AIDS-related and total 1994 health care expenditure funded by the government. In three of the five countries, the subsidy rates for AIDS treatment are significantly different from that for total health care expenditure. For example, although Mexico subsidized a generous 49 percent of the cost of AIDS treatment, this was much less than the 76 percent share of total health care expenditure. Brazil and Thailand subsidized AIDS care at a higher rate than all types of care, while Tanzania and Cote d'Ivoire subsidized AIDS treatment and total health care expenditure at roughly the same rate.

A bias against those with HIV/AIDS can take many forms, ranging from a singling out of AIDS-specific drug therapies for exclusion from public funding, to outright refusal of service. There are many anecdotes about discrimination against the HIV-infected in health care settings. In some hospitals, the HIV-infected were placed in special AIDS wards, which were subsequently shunned by fearful health care workers. In others, the HIV-infected were required to pay extra costs for rubber gloves or a private room. In still other cases, the HIV-infected have been denied treatment for common illnesses, perhaps because doctors and nurses mistakenly believed that nothing could be done to help a person with HIV/AIDS. Such discrimination is unfair, unprofessional, and unethical. Moreover, it displays ignorance of the many ways, discussed above, in which inexpensive treatments for symptoms and opportunistic illnesses can prolong and improve the lives of people with HIV/AIDS. Government has an important role to play in training medical personnel in order to eradicate all vestiges of discrimination against HIV-infected patients.

Yet it is equally unfair, and also inefficient, for government to subsidize a higher proportion of the costs of care for patients with HIV than for other patients. Aside from the issue of poverty, to be addressed in the next section of this chapter, there are three ways to justify government subsidies for curative health care: (1) as an incentive for those with an infectious disease to seek a cure and avoid infecting others, (2) as health care insurance with universal coverage and mandatory participation through general taxes, or (3) as government support for a "merit good" or "basic need." No treatment has yet been shown to reduce the infectivity of sexual contact with an HIV-infected person (see box 4.5). AZT treatment of HIV-infected pregnant women has been shown to reduce transmission at birth, but is still too costly an approach to preventing secondary infections in the poorest countries (see box 4.6). With the prominent exception of TB, the treatment of which should be subsidized in all countries, most opportunistic illnesses that afflict the HIV-infected are infectious only to other equally sick HIV-infected people. Thus the argument for treating the diseases on the grounds that they are infectious is weak. If government subsidy is considered as an insurance payment, efficiency criteria argue for a higher coinsurance (i.e., lower subsidy) rate for any condition in which the patient is likely to be highly price-responsive. (11) The first section of this chapter established that the drugs and medical services to treat AIDS can amount to a great deal of money, although some of the most expensive of these treatments purchase the patient little additional life span and decrease, rather than improve, the quality of life. Thus on efficiency grounds, where the objective is to limit the responsiveness of expenditure to insurance, AIDS patients should face somewhat lower subsidies, not higher ones. The final possibility, that AIDS treatment is a basic need, is difficult to justify in poor countries where the opportunity cost of treating one adult for AIDS may be measles vaccines for 100 to 200 children or, as shown in figure 1.8, ten student-years of primary school. Thus none of these economic arguments justifies higher subsidy rates for AIDS.

Box 4.5 Is Antiretroviral Therapy an Effective Way To Prevent Sexual
Transmission?

UNTIL RECENTLY, ANTIRETROVIRAL (ARV) THERAPY
could not be considered as a possible way to prevent
sexual transmission because the available drugs for
treating HIV/AIDS had little impact on infectivity.
The 1997 discovery that protease inhibitors and
triple-drug therapy suppress HIV below the level of
the most sensitive blood rests to detect it has raised
hopes that these drugs might present the spread of
HIV, in addition to greatly extending the life of the
patient. Even it this proves true, however, policymakers
deciding whether to provide public subsidies
will need to consider that the $10.000 to $20,000
cost of treating a single patient would prevent many
more cases if spent on focused prevention in high-risk
groups. Furthermore, we saw in chapter 1 that
even without the expense of antiretroviral therapy,
current expenditure for treating an AIDS patient
would buy a year of primary school for ten students
in most developing countries. In the poorest
countries, the much higher cost of antiretroviral
therapy would buy a year of primary school for 400
students. For this reason, even it the cost of antiretroviral
therapy is shown to reduce the infectivity
of sexual contacts, and even if the cost falls substantially,
decisionmakers will still want to consider very
carefully before initiating such subsidies.

What policy recommendations can be drawn from these two observations? The prudent, efficient, and equitable course is to place the financing of health care for HIV/AIDS on the same footing as other diseases. The treatment of particularly infectious illnesses striking HIV-infected people, including TB and STDs, should be subsidized relatively generously because of the secondary infections treatment will prevent. Other health care problems of the HIV-infected should be subsidized at the same rate that applies to other adult health problems that are equally infectious. Assuming that Brazil subsidizes about one-third of other health care costs (as figure 4.5 indicates it does in Sao Paulo) and that the infectious proportion of illness episodes is similar among the HIV-infected and uninfected populations, this policy would lead Brazil to reduce its subsidy to antiretroviral therapy from 100 percent to one-third. Similarly Thailand would reduce its subsidy of antiretroviral therapy from 100 percent to about 20 percent. Mexico, on the other hand, would increase its subsidy to AIDS patients to approximately the same rate it offers other patients.

In mid-1997, none of these countries appeared to be following this recommendation precisely. Brazil and Mexico were continuing their former policies, with a tilt of subsidies toward AIDS treatment in Brazil and away from it in Mexico. Having spent $108 million on antiretroviral medication in 1996, Brazil was projecting an expenditure four times that large for 1997 (Chequar 1997). Thailand had recently embarked on an experiment that held out the possibility of an equal percentage subsidy for the treatment of AIDS and other diseases, on average, if not for the individual patient. In 1996, the Thai Ministry of Public Health found that, given the rising patient load, its policy of a 100 percent subsidy for antiretrovirals and drugs for the opportunistic illnesses would soon consume considerably more than the entire budget allocated to the National AIDS Program (Prescott and others 1996). As a result, the government revised its policy to provide free antiretroviral therapy only to HIV-positive pregnant women, where it might prevent mother-to-child transmission, and to participants in nationally approved clinical trials, where patients receive the support they need to maximize compliance (Kunanusont 1997). This policy makes sense for antiretroviral therapy, on the assumption that low levels of compliance outside clinical trials would have little therapeutic effect on patients and might cause negative externalities in the form of drug-resistant strains of HIV. Furthermore, participants in clinical trials produce a positive externality in the form of the knowledge that can be used to benefit many other patients, and therefore should receive a higher subsidy than other patients. Thailand's decision to subsidize AZT for prevention of mother-to-child transmission can be justified as a "merit good," which might be affordable in a middle-income country (see box 4.6).

Affordable, humane responses to the epidemic. We have argued that governments should avoid two types of health care responses to the epidemic: increasing the overall subsidy to all types of treatment, and providing disproportionately large subsidies to treatment of HIV/AIDS. There are nonetheless several ways in which governments can intervene to mitigate the health impact of HIV/AIDS on infected individuals and their families and on the overall health sector. Each of these interventions is justified on public economic grounds, either because it has large positive externalities, or because it improves the efficiency or the equity of the health care market in other ways.

Box 4.6 Preventing Mother-to-Child Transmission

OF THE MANY TRAGEDIES CAUSED BY THE HIV/AIDS
epidemic, perhaps none is more disturbing than that
of children who contract the virus from their mothers
at birth or through breastfeeding. Methods exist for
preventing mother-to-child transmission; sadly,
most of the methods so far developed are difficult to
implement in the very poor countries where most
mother-to-child transmission occurs.

About one-half to two-thirds of mother-to-infant
transmission is believed to occur at the time of birth
(Reggy, Simonds, and Rogers 1997). The risk of
HIV transmission from mother to newborns can be
reduced by two-thirds, from 25 percent to about
8 percent, by administering zidovudine (AZT) to
the mother before and during birth, and to the non-breastfed
newborn for six weeks after birth (Connor
and other 1994). The total drug and related medical
costs for the AZT regimen currently recommended
by the U.S. Centers for Disease Control
and Prevention (CDC) for reducing mother-to-child
transmission amounts to $1,045 per case
treated in the United States (Mauskopf and others
1996). In Thailand, where some inputs are less
costly, the total cost is about half as great (Prescott
and others 1996). Even so, this is roughly 50 times
the average per capita health expenditure of low-income
countries in Sub-Saharan Africa, where
about two-thirds of mother-to-child transmissions
take place. And at roughtly $3,000 per HIV infection
averted, this approach to prevention does not
compare favorably with other approaches discussed
in chapter 3 and would be affordable only in middle-
or upper-income countries.

Several research efforts are under way to find a
lower-cost means of reducing mother-to-child transmission.
One involves trying to identify themost
efficacious part of the AZT regime, in order to
reduce the total amount of AZT needed. Trials are
also under way in industrial and developing countries
to investigate various other medical approaches
to reducing transmission (Biggar and others 1996,
DeMuylder and Amy 1993). However, it is unclear
whether any of these strategies, if found effective,
would be affordable or technically feasible in many
developing country settings.

Newborns of HIV-positive mothers who escape
infection at birth may nonetheless be infected later
through breastfeeding. As a result, public health officials
have had to weigh the advantages of breastfeeding
for child health against the possibility of HIV
transmission. In areas where the primary causes of
infant deaths are malnutrition and infectious diseases,
UNAIDS recommends that women continue
to breastfeed their children. If a women is known to
be HIV-positive, she should be provided with the
means to make an informed choice about infant
feeding methods. In areas where there are safe alternatives
for infant feeding, however, children will be
at less risk of illness and death if not breastfed
(UNAIDS 1996a). While it may be possible to simply
reduce the duration of breastfeeding, it is not
know what impact this might have on reducing
transmission, since there is no consensus on when
the risk of transmission is highest within the breastfeeding
period (background paper, Saba and Perriens
1996).

* Provide information about the efficacy of treatments. Because people with HIV/AIDS are often desperate for treatment and cannot easily research what works, they are especially vulnerable to quackery. Governments can serve the interests of everyone by promptly investigating unproven treatments and providing credible information about their validity. So long as this is done through existing media channels--for example by issuing press releases and arranging media interviews with credible experts--it can be done quite inexpensively.

* Subsidize the treatment of infectious opportunistic illnesses and STDs. Subsidized treatment is especially appropriate for tuberculosis, one of the most common opportunistic illnesses to infect AIDS patients, since curing a single case can avert many secondary infections. Treatment of gonorrhea, syphilis, and the other classic STDs should be subsidized, not only because they are highly contagious, but also because they exacerbate HIV transmission, as discussed in chapter 3. Because few people are susceptible to them, treating toxoplasmosis, cryptococcosis, or one of the other infectious opportunistic illnesses that develop only in people with severely disabled immune systems prevents few secondary cases and thus should be subsidized at a lower rate, closer to the subsidy rate for chronic, noninfectious disease. Whether a subsidy to antiretroviral treatment of HIV itself is justifiable as a way to prevent secondary HIV infections will depend on the efficacy of the treatment and on its cost relative to the cost of other HIV prevention measures. In mid-1997, such treatments were far too expensive and uncertain to warrant subsidies on these grounds (see box 4.5).

* Subsidize the start-up costs for blood safety and AIDS care. The AIDS epidemic has increased the willingness of individuals to pay for certain types of services, such as screening of blood for transfusions and care for the terminally ill. Where these services are lacking, government help with the start-up costs is justified, just as governments subsidize other large indivisible investments, such as an electric utility or a water system, so long as the users then pay for the services they receive. Thus, governments in poor countries should establish blood banks but should not indefinitely provide free blood. Similarly, government should help establish AIDS treatment facilities, especially community-based home care programs, but should not permanently subsidize the care they provide.

* Provide special assistance to the poor. Most countries already make special provision for medical care to the poor. As the AIDS epidemic increases the demand for care, governments may wish to focus such assistance even more on those who can least afford it. Sliding fee scales and other measures to make care available to the poor should apply to people with HIV/AIDS just as they do to people with other illnesses. This principle of providing assistance to those who need it most, regardless of their HIV/AIDS status, is discussed more fully in the next section on ways to mitigate the impact of HIV on poverty.

AIDS and Poverty: Who Needs Help?

IN ADDITION TO ITS DEVASTATING IMPACT ON INFECTED INDIVIDUALS, HIV hurts all those who are linked to them by bonds of kinship, economic dependence, or affection. The grief suffered by survivors, and the possible lasting psychological damage, especially to young children who lose a parent, are potentially the most damaging consequences of the epidemic. They are, however, difficult to measure, probably unreachable by public policy, and therefore beyond the scope of this book. In addition, survivors often suffer economically. This harm from a prime-age adult death constitutes the most important economic impact of an HIV/AIDS epidemic and is the topic of the remainder of this chapter. It can be measured by the impact of adult death on such social indicators as orphanhood, child nutrition, schooling, and poverty. By worsening these measures and widening the gap between the poor and others, HIV can exacerbate poverty in poor countries and delay attainment of national economic development goals. We look first at how HIV/AIDS affects poverty, then at the implications of these findings for poverty policy in a severe AIDS epidemic.

How HIV/AIDS Affects Poverty

It is sometimes said that "AIDS is a disease of poverty." In what sense might this be true--or false? First, are the poor more likely to become infected with HIV than others? Second, what proportion of people infected with HIV are poor? Answers to these questions are important, for they will influence both the focusing of prevention measures and attempts to mitigate the impact of the AIDS infections that do occur. In considering the impact of AIDS on poverty, we first examine the available evidence to answer these two basic questions; then we ask how the impact of an AIDS death compares with other shocks that households suffer, and how households of different income levels cope.

HIV infects the rich and the poor. In developing countries, the relationship between income and HIV infection rates has been best documented in eastern and central Africa. (12) Whether the patterns observed in this part of Africa will also emerge elsewhere remains to be seen. Several factors have exacerbated the epidemic in hard-hit areas of Africa: most people who had HIV at the time of the studies had become infected years earlier, when little was known about HIV prevention; moreover, the area is traversed by major transport routes and has suffered from war. Yet each of these factors is also evident in other developing regions to varying degrees: knowledge about HIV prevention is still often scant, and other regions also have major transport routes and wars. Thus, until other data are available, the experience in eastern and central Africa may offer worthwhile clues about how infection rates in other regions are likely to differ across income groups as the epidemic progresses.

As we learned in chapter 3, early in the epidemic in Sub-Saharan Africa men and women who travel more, and men who had higher incomes, were more likely than others to contract the virus. There are reasons to believe that this may hold true elsewhere. Studies show that sex is similar to other pleasurable pastimes: the number of partners per year rises with income. Also, a person with a higher income is likely to attract more prospective partners, and will have more money than a person with lower income to compensate sexual partners or to support any offspring. These factors, combined with the fact that HIV, unlike other STDs, cannot be readily cured, has made HIV unique among widely prevalent infectious diseases in striking rich people in the same proportion, or larger proportions, than it strikes the poor. That HIV infects the rich as well as the poor is important to keep in mind when considering which households need help the most.

Of course, we would expect that more-educated people with higher incomes would be in a better position to learn about the epidemic and alter their behavior to avoid infection. Chapter 3 presents evidence that this is already occurring: in some countries, highly educated people have higher frequencies of condom use than the less well educated. Also, recent studies in developed countries have shown AIDS incidence to be highest among the very poor. If these trends are replicated worldwide, AIDS will become like other infectious diseases, in that the poor will be more likely to become infected than the nonpoor. Ultimately, AIDS may become most prevalent in the poorest urban slums of developing countries.

Already, most people with HIV/AIDS are poor. Although lack of data makes it impossible to calculate the precise proportions of poor and nonpoor who are infected, knowledge of income levels and infection rates across countries suggests that many more poor people are infected than nonpoor people. For example, according to an internationally adjusted standard of absolute poverty, Sub-Saharan Africa has about four times as many poor people as nonpoor people. Thus, even if poor people were infected at just slightly more than one-quarter the rate of the nonpoor, poor people would account for the majority of HIV infections in Africa. Since poor people in many parts of Sub-Saharan Africa have infection rates that are well above one-quarter the rates of the nonpoor, we know that, in Africa, at least, there are many more poor people than rich people with HIV Although magnitudes are less striking, the same general principle will tend to apply in other developing regions. (13)

We have seen that AIDS is already a disease of poverty in the sense that it affects more poor people than nonpoor, and it may eventually become a disease of poverty in the sense of infecting a higher proportion of poor than nonpoor. If we assume that one of government s main responsibilities is to make it possible for people to escape from poverty, these findings lead us to new questions. What is the impact on a poor household when the mother, father, or another prime-age adult who is a member of the household dies from AIDS? How do poor households cope with AIDS deaths? We examine these questions in the next two subsections. Box 4.7 describes three sets of characteristics that determine the initial impact of an adult death and how well an afflicted household copes.

What is the direct impact of an AIDS death? The death of a prime-age adult is obviously a tragedy for any household. Survivors must contend not only with profound emotional loss, but also with medical and funeral expenses, plus the loss of income and services that a prime-age adult typically provides. How serious is the shock of an AIDS death to the economic welfare of the survivors? The direct impact of a death consists of the medical costs prior to death and the costs of the funeral. To assess the direct cost of a death from AIDS, we compare the medical and funeral costs of an AIDS death with those of a prime-age adult death from other causes. Finding that the difference is not large, we then consider how the death of a prime-age adult, regardless of cause, affects household consumption patterns.

Our analysis is based on findings from several household surveys described in box 4.8. In particular, we rely on the most extensive of these, a study done in Kagera, Tanzania, since detailed data from that study provide a basis for our subsequent analysis of how households cope with AIDS deaths. Although the data are very limited, based on the available information, it is reasonable to expect that the impacts and coping responses described in this chapter will prove to be broadly consistent with future findings.

Box 4.7 Three Factors Determine the Household
Impact of a Death

THE OVERALL ECONOMIC IMPACT OF AN ADULT DEATH ON THE
surviving household members varies according to three sets of
characteristics:

* those of the deceased individual, such is age, sex, income, and
cause of death

* those of the household, such as composition and assets

* those of the community, such as attitudes toward helping
needy households and the availability of resources.

The first set of characteristics determines the basic impact of the
death on the surviving household members; the second and third
influence how well the afflicted household copes. Although
disentangling the three is very difficult, it is nonetheless important
when attempting to assess the household impact of an adult death to
consider all three sets of factors.

In the Kagera study, people diagnosed with AIDS were somewhat more likely to seek medical care than people who died from other causes, and they were more likely to incur out-of-pocket medical expenses. (14) Moreover, household medical expenditures tended to be much higher for AIDS than for other causes of death, as shown in figure 4.6. Strikingly, for all groups except men with AIDS, medical expenses were overshadowed by funeral expenses. On average, households spent nearly 50 percent more on funerals than they did for medical care. Moreover, funeral expenditures for AIDS deaths and non-AIDS deaths differed less than did medical expenditures. Thus, even though a significant proportion of funeral costs were covered by gifts from other households (about 45 percent on average), the difference in the household impact of an AIDS death and a non-AIDS death is smaller than the differences in medical costs alone would lead us to expect. (15)

Box 4.8 Studies of the Household Impact of Adult Death from AIDS
and Other Causes

WITHIN THE PAST FEW YEARS, FOUR IN-DEPTH
studies have examined the impact of adult death
from AIDS on surviving household members.
Compared with other studies, these four studies
used more detailed survey instruments: applied these
to larger, more representative samples of households:
and followed the households over longer periods.
The four studies were carried out in the following
locations (the number of households surveyed is
shown in parentheses):

* Chiang Mai. Thailand (300)

* Abidjan, Cote d'Ivoire (107)

* Rakai, Uganda (1,677)

* Kagera, Tanzania (759)

The studies used many similar parameters. All
but the Thai study visited the sample households
several times. All but the Cote d'Ivoire study included
households that did not experience an AIDS
sickness as well as those that did. (1) All but the Rakai
study were done expressly to study social and economic
impact and thus had extensive questionnaires
about consumption and other social and economic
measures of well-being. (2) All but the Cote d'Ivoire
study included deaths from causes other than AIDS
as well as those from AIDS.

Two broad findings emerged from these studies
and are discussed in the text. First, households use a
variety of informal mechanisms to cope with misfortunes
like an adult death in the household. Second,
although these coping mechanisms cushion the
impact of the shock, households are not entirely successful
in protecting their well-being. In general, the
poorer the household, the greater and more persistent
the impact of a prime-age adult death from
AIDS and similar shocks.

(1) Although the Cote d'Ivoire study did not include an explicit
control group. Bechu (background paper 1996) is able to use differences
across households in the severity of the AIDS cases combined
with the sequence of sex observations on each household to
estimate the impact fatal adult illness on consumption.

(2) The Rakai study is part of a study of the effect or mass STD
treatment on the incidence of AIDS. The household questionnaire
focused on epidemiological issues and only asked 1 few
questions related to economic well-being.

Sources For Thailand, Pitayonon, Kongsin and Janjaroen
(1997) and Janjaroen (background paper, 1996), for Cote d'Ivoire.
Bechu (background paper 1996), for Uganda. Menon and others
(background paper 1996a) and for Tanzania. Over and others
(forthcoming)

In Thailand, where per capita income is 10 times that in Tanzania, households in Chiang Mai province spent more than ten times as much on medical care prior to death as did the Tanzanian households (Pitayonon, Kongsin, and Janjaroen 1997). The households with an AIDS death spent $973 on average, which in contrast to Tanzania was only about 10 percent more than the $883 spent by the non-AIDS households. But, just as in Tanzania, the households spent much more on funerals than on medical care. (16)

The relative amounts spent for medical care and funerals will, of course, vary from country to country and even across communities within a district. Nevertheless, two broad observations are likely to apply in most situations: first, medical costs are only a portion of the cost of a prime-age adult death; and second, nonmedical costs are likely to be similar, regardless of the cause of death. Where these observations hold true, the direct impact of an AIDS death will not be much different from that of a non-AIDS death, despite higher medical expenditures for AIDS. Thus, the high cost to households from AIDS will usually be due to the large number of deaths caused by the epidemic rather than by the fact that they are caused by AIDS. Given that the impact of a prime-age adult death is likely to be similar, regardless of cause, how does a prim-eage adult death affect household consumption? Figure 4.7 shows household consumption during the previous twelve months for two groups of households in the first wave of the Kagera survey: those who had experienced a death during this period and those who had not. Households that suffered a death had lower overall expenditures and, as we would expect, devoted a larger share of the expenditure to medical and funeral costs. Also, these households spent one-third less on the "other nonfood" category (i.e., clothing, soap, and batteries). Finally, in households that suffered a death, food produced by the household was a larger share of consumption than in households without a death, while purchased food was a smaller share of consumption. (17) These differences reflect the fact that the members of households that experienced a death cut back on the number of hours they worked for wages and thus had lower incomes with which to purchase food (Beegle 1996). They were only partially able to replace this lost income with additional production of food at home.

[FIGURE 4.8 OMITTED]

In the two studies that followed, detailed household consumption over time, the Kagera study and the one from Cote d'Ivoire, the time pattern of consumption demonstrates the resiliency of the average household to the impact of the death. Figure 4.8, drawn from the Cote d'Ivoire study, shows changes in expenditure per household member for three components of expenditures, and total expenditure during ten months after the households in the survey lost someone to AIDS. (18) Two patterns are immediately evident. First, total consumption dips and then partially recovers, still trending upward at the end of the survey. Second, basic needs, which include food, dip less than other categories of expenditure, then almost fully recover as families reduce other categories of spending to minimize the impact on necessities (background paper, Bechu 1996). The household surveys from Chiang Mai and Rakai also suggest a partial recovery in per capita consumption but do not have sufficient data to confirm this pattern.

How households cope with the impact of adult death. The economic shock of a prime-age adult death, described above, would have been larger and more persistent, except that households use a variety of strategies to cope. Before the AIDS epidemic, prime-age adult deaths were much less common, so these mechanisms were used mostly to cope with other shocks. As a result, early assessments of the household impact of AIDS tended to overlook household coping and assume that AIDS would be catastrophic not only for the infected individual but also for the entire household. Press accounts that presented devastated households as typical contributed to the widespread belief that most AIDS-affected households in developing countries would collapse. To be sure, some households are destroyed by AIDS; this is especially true if both parents become ill or die while their children are still very young. However, such instances may be less typical than is generally assumed because of the typically long lag between HIV infection and death. Moreover, while premature death of a loved one is always tragic, leading to emotional pain and sometimes lasting psychological damage in survivors, survey data suggest that when it comes to coping with the economic impact of such a loss, households in general are surprisingly resilient.

The degree of household resilience to the economic impact of a prime-age adult death has important implications for society's response to a generalized epidemic. On the one hand, if nearly all AIDS-affected households collapsed, resources for mitigating the household impact of the epidemic would be stretched so thinly that governments and social welfare organizations would be overwhelmed. In such a situation, policymakers might easily conclude that those currently affected were beyond help and that the only reasonable response for the government would be to redouble prevention efforts. On the other hand, if many households were able to cope, governments and NGOs could focus the limited resources available for mitigating the impact of the epidemic on the households that needed help the most.

Understanding the variety of household coping mechanisms and how these will affect different groups of households is important. The mix of responses attempted by a specific household in response to a prime-age adult death depends on countless factors, some of which will vary across countries and communities. Since the available data on household impact comes mostly from Sub-Saharan Africa, the following discussion unavoidably reflects this bias. Policymakers in all countries faced with the possibility of a generalized epidemic will want to assess the extent to which these responses are evident in their own country. To varying degrees, however, three coping mechanisms observed in Africa--altering household composition, drawing down savings or selling assets, and utilizing assistance from other households--are all likely to be attempted whenever households confront the tragedy of a prime-age adult death. This section discusses each of these informal mechanisms in turn and then discusses formal assistance, such as that provided by governments and NGOs.

Before this analysis, it would be useful to consider whether income that had been devoted to health care and funeral expenses could be diverted after the death to other expenses. Some household coping certainly involves such responses. However, the potential should not be overestimated, since much of the cost of medical care and an even larger proportion of the cost of funerals is financed by transfers from outside the household. Since these transfers typically cease after the funeral, households must draw on additional coping strategies, described below.

Altering household composition. Households everywhere fulfill economic as well as social functions. In rural areas of developing countries, households are often the main production unit for subsistence farming and, in some instances, for cash crop farming as well. In such a situation, the economic shock of the death of a prime-age adult can be cushioned to some degree by altering household composition. Examples of such changes could include sending one or more dependent children to live with relatives, or inviting an unmarried aunt or uncle to join the household in exchange for assistance with farming and household tasks. Results from three of the four available household surveys--two from Africa and one from Chiang Mai, Thailand--show that the degree to which household composition is used to cushion the shock of the death varies according to the size and flexibility of local household structure.

Among the 759 households in the Kagera study interviewed once every six months for two years, 130 household members of all ages died, but roughly nine times as many people left the households alive over the same period and seven times as many joined the households. In addition, about 200 children were born to household members. As a result, the average size of all the households declined only slightly, from about 6.0 to 5.7 members.

During the six months between any two interviews, economically active adults left or joined about one-fifth of the households that did not have an adult death and about 40 percent of the households that did suffer a death. Since most households that suffered a death added at least one member, the average size of these households declined by less than one, from 6.4 to 5.7 members--so that the average household size after a death was the same as in households that did not suffer a death. Similarly, the dependency ratio rose only slightly in households with an adult death, from 1.2 to 1.4, slightly less than the 1.5 dependency ratio in households without an adult death.

A striking fact is that household size and dependency ratios changed very little, even though Kagera has high adult mortality from AIDS. The same phenomenon was observed in the survey in Rakai, Uganda, which, like Kagera, has a severe AIDS epidemic: 15 percent or more of adults in roadside communities are infected with HIV. This suggests that, even in a generalized AIDS epidemic, most African households that suffer an AIDS death will be able to adjust household size and dependency ratios in ways that make them similar to households that did not suffer a death.

The Chiang Mai survey reveals that, at least in this area of Asia, households are much smaller and less mutable than in Africa. The 108 households in the sample that had not experienced a death had 432 members, or exactly four per household. In contrast to the no-death households in Kagera, the Chiang Mai households experienced almost no change in membership, receiving among all of them only one new member and losing only 6 members over the reference period. The 216 households that experienced a death had an average of 4.1 members, of which they lost one each because of the death. Unlike the Kagera households, these Chiang Mai households remained a full person smaller (that is, with 3.1 persons per household) at the time of the interview, which was up to two years after the death (background paper), Janjaroen 1996).

There are two points of similarity between the household composition responses to death in the Kagera and Chiang Mai studies. First, the Chiang Mai households with deaths, like their Kagera counterparts, suffered an increased dependency ratio due to the deaths. Because of the smaller number of adults in the Thai households, the dependency ratio there almost doubled after the death. Second, in both countries households with a death were twice as likely to experience membership change as the households without deaths. However, the proportion of households that experienced a membership change and the rates of turnover were only about one-quarter as large in Chiang Mai as in Kagera.

When we later discuss possible policy responses to adult mortality, the possibility will be raised that households may respond opportunistically by moving people into a household that is benefiting from an assistance program. The evidence here suggests that, even if this turns out to be a problem in Africa, it is much less likely to be an issue in places like Chiang Mai where households are much smaller and apparently less able or willing to adjust their membership in response to outside stimuli.

Dissavings and the sale of assets. Drawing down savings and selling assets is an obvious potential mechanism for coping with prime-age adult death. Because assets may have been accumulated as part of a strategy to cushion unanticipated shocks, drawing upon them is one of the least painful ways of coping, much less painful than reducing food consumption, for example. Evidence from Kagera, Rakai, and Chiang Mai suggests that households do draw down savings or liquidate assets in response to a prime-age adult death.

The surveys in Kagera and Rakai both asked respondents about their ownership of three types of durable goods: a car or truck, a bicycle, and a radio. Less than 2 percent of the households owned a car or lorry, and changes in ownership did not show any clear pattern in relation to whether households suffered an adult death. However, ownership of bicycles and radios, which is much more widespread, did reveal a pattern. Table 4.5 shows how ownership of these assets changed over the course of the surveys, depending on whether or not the household suffered an adult death. In both surveys, radio ownership increased among households that had no death and decreased among households that had a death. (19) A similar pattern can be seen for bicycle ownership in Rakai, although not in Kagera. Thus the evidence from Rakai, partially supported by the Kagera data, suggests that some households that suffer an adult death may be selling durable goods as part of their coping strategy. The alternative is that these goods may have belonged to the deceased and been willed to someone outside the household. Even in this instance, however, the loss of the asset may help with coping efforts, if the recipient feels an increased obligation to assist the bereaved.

Additional evidence of households drawing down savings to cope with an adult death can be seen in Kagera data on membership in traditional rotating savings and credit associations (ROSCAs). In wave 1 of the survey, 51 percent of the 80 households that would experience an adult death during the eighteen-month survey period were members of a ROSCA; by the end of the survey, participation had dropped to 36 percent. Among households that did not experience a death during the survey period, ROSCA participation varied less, from 41 percent in wave 1 to 36 percent in wave 4.

Although the Chiang Mai survey does not permit comparisons of financial variables over time between households that experienced a death and those that did not, fully 41 percent of households with a death report having sold land, 57 percent report some dissavings, and 24 percent report borrowing from a cooperative or revolving fund (i.e., a ROSCA) to finance the adjustment to the death. Perhaps it is the greater wealth of the Thai households that permitted them to cushion the shock in these ways, rather than through readjustment of household composition. (20)

Assistance from other households. For all households confronted with an adult death, help from relatives and neighbors is a potentially important supplement to the household's own efforts. Policymakers considering how to best use the limited resources for mitigating the household impact will want to avoid displacing such private transfers. To do so, they will need information about assistance from households in the specific communities concerned. The discussion that follows is not intended to substitute for this information, but only to suggest the types and possible relative magnitude of such responses.

An important feature of the social organization of Kagera households, and indeed of most African communities, is interdependence in time of need. In Kagera, both bereaved and nonbereaved households were very likely to receive cash or in-kind assistance from other households. (About three-quarters of the nonbereaved households received such assistance, compared with 80 to 90 percent of the households that suffered a death.) But among households that received private transfers after a death, the median amount received during the half-year of the death ($53) was more than twice that received during the year before the death, as well as twice that received by households that did not surfer a death. (21)

New organizations established to help cope with the costs of AIDS death may be one explanation for this large difference. Focus group interviews in 20 of the sample villages found that besides traditional savings and mutual assistance associations, such as ROSCAs, residents of many villages had launched associations specifically to help families affected by an AIDS death. Most of these associations were launched and operated by women; many have regular meetings at which members make contributions in cash or in kind (Lwihula 1994).

Figure 4.9 shows the amounts of private transfers received by households according to whether or not they suffered an adult death. Note the dramatic response of private transfers between wave 1 and wave 4 for the households that experienced a death in that interval (i.e., during the "panel"). The figure also shows the much smaller amount of program transfers, an issue we turn to below.

Assistance from government and NGOs. Regarding assistance from government and NGOs, two types of questions must be asked. First, which families receive such assistance and how much do they receive? Second, how much does it cost to provide this assistance? Cost considerations did not figure in our discussion of private assistance, since only private resources are involved. But governments and NGOs use public resources, whether generated by taxes or by voluntary contributions. Accordingly, we should ask whether these funds are used in the most effective way possible. In this discussion, assistance from government and NGOs is referred to as program transfers or formal assistance, to distinguish it from the private and informal assistance provided by households and village associations.

According to the Kagera survey, program transfers reached fewer households and provided a smaller amount of assistance than private transfers. In the last wave of the survey, one-fifth of the households that had not had an adult death in the past eighteen months had received assistance from an organization in the past six months; almost two- fifths of the households that had experienced a death received such assistance. The median value of program assistance received was small relative to total household expenditure, and to the amounts of private assistance received.

But while, on average, households that had experienced a death received larger amounts of assistance, as shown in figure 4.9, this was not always the case. Nor were program transfers always small relative to annual income. In one village, 50 percent of the households, including some that had never reported a death, received more than $110 in program transfers during the six months before wave 4.

To analyze the relative costs of various types of programs for assisting households affected by AIDS and other causes of adult death, the survey collected data from one governmental and eleven nongovernmental organizations operating in the Kagera Region. Figure 4.10 presents the average cost per year of operating each of the programs where cost data were available from at least two agencies. In considering the implied cost comparisons, it is important to remember that the services provided may be very different; for example, home care focuses on the sick household member, while educational support helps dependent children, who may not be sick, to attend school. Furthermore, even the programs averaged in a single category often contain disparate program elements and vary in quality.

Despite these caveats, the figure reveals that there can be very large differences in the cost per beneficiary of different types of programs. A particularly telling comparison is between the cost of supporting a child in a foster home, estimated at $107 per year, and the cost of supporting a child in an orphanage, which averages $1,063, or ten times larger (not shown on the figure). For children who cannot be placed in a foster home, it may be necessary to consider the alternative of an orphanage. However, policymakers and NGO providers should keep in mind that every child sent to an orphanage will consume the resources that could have been used to support ten children in foster homes.

The economic impact of AIDS is larger in poor households. We have seen that households that experience an adult death draw on their assets to cushion the shock of this catastrophe. It follows that households with lower levels of assets can be expected to have more difficulty coping with the death than households with more assets. In this section we examine the effect of a households initial assets on its ability to cope with adult death. First we show how a households assets affect the short-term impact of an adult death on per capita food consumption; then we consider the long-term harm to children, through worsening malnutrition and reduced school enrollments.

In examining this evidence, it is useful to keep in mind the key question that policymakers are likely to face in deciding how society in general and governments in particular, can mitigate the impact of a generalized epidemic: who needs help?

The impact on food consumption. The greater impact of a prime-age adult death on poorer households appears most starkly in changes in food expenditure and food consumption. Figure 4.11 shows the changes in per capita food expenditure and consumption (which includes both purchased food and home-produced food) for the poorer half of the Kagera households and the less-poor half of the Kagera households during the six months when the death occurred. For the better-off households, both measures of food intake increased. The picture is quite different for the poorest 50 percent of the households: food expenditure, which was already lower in these households than in the others, dropped by nearly a third. The resulting drop in per capita food consumption was cushioned by an increase in the consumption of home-produced food (not shown). Even so, per capita consumption in the poorer households fell by 15 percent. Even if these households eventually return almost to the predeath level of per capita food consumption, as did the Ivoirian households, lack of adequate nutrition for a year or more can have a profound effect on the development of children. We turn to this topic.

The impact on child nutrition. Childhood malnutrition is potentially one of the most severe and lasting consequences of a prime-age adult death. The death of a parent or other adult may lower the nutritional status of surviving children by reducing household income and food expenditure, and by reducing adult attention to childrearing. Because childhood malnutrition can impede intellectual development and thus reduce a person's long-run productivity, improving childhood nutrition has long been an important development goal. Policymakers seeking to mitigate the impact of the AIDS epidemic will therefore be particularly concerned about minimizing the impact of the increasing number of prime-age adult deaths on childhood nutrition.

The impact of adult death on childhood nutrition is likely to vary according to many factors, not least of which is the nutritional status of children in the overall population. Little information is available on how adult death affects child nutrition. Moreover, the impact is likely to differ across countries and communities. The following discussion of the findings in Kagera illustrates some of the issues that policymakers will want to consider in attempting to mitigate the impact of the epidemic. In this discussion, the term "orphan" is used to indicate a child who has lost one or both parents.

We would expect that the drop in food consumption among the poorer bereaved families described above would result in an increase in malnutrition among children in these households, since these children are likely to be malnourished or at risk of malnutrition before the adult death. As figure 4.12 shows, among the poorer households in Kagera, stunting (very low height for age) among children under 5 is indeed substantially higher for orphans (51 percent) than for children whose parents are both alive (39 percent). What is surprising, however, is that the difference between orphans and nonorphans in the better-off households is even larger; indeed, orphans in the better-off households are stunted at almost the same rate as orphans in the poorer households.

This unexpected result raises difficult operational issues. If orphans in the poorer households were much more likely to be stunted than orphans in the less-poor households, as we might have expected, the policy prescription would be straightforward: to minimize childhood malnutrition, focus nutritional assistance on the poor households that suffer a prime-age adult death. Instead we find that, at least in Kagera, half of the children who have lost one or both parents are stunted, regardless of whether they live in a poorer household or a less-poor household.

There are several possible explanations for this surprising observation. One is that stunting among both groups of orphans is due in part to pediatric AIDS and to other illnesses that a child may contract from an HIV-infected adult, such as tuberculosis, which would not necessarily be closely linked to household asset levels. Another possible explanation is that some stunted orphans in the households with more assets originally resided in poorer households, and their stunting is a legacy of that earlier poverty. Finally, the fact that stunting is about equal among both groups of orphans suggests that, for this population, stunting of 50 percent may be approaching an upward limit beyond which any additional deterioration in childhood nutrition results in increased child mortality rather then increased stunting. In all three cases, child nutrition could indeed be worse in the poorer bereaved families than in the less-poor bereaved families.

It may also be the case, however, that childhood nutrition does deteriorate sharply after a prime-age adult death, even in households with comparatively high levels of assets. This could happen, for example, if grief and psychological depression in the surviving parent interferes with childrearing, including obtaining food and providing meals. If this is true, young orphans stand a high probability of being malnourished, irrespective of the economic status of the household in which they are living.

One policy approach that could be appropriate in either case would be to focus nutritional assistance on young children who show evidence of being malnourished or who are likely to be at risk of becoming malnourished (by virtue of losing one or more parents).

There are several advantages to such an approach. First, because the percentage of children under 5 who have lost a parent will be small, even in a generalized epidemic, such a response is likely to be much less costly, and therefore more feasible, than the alternative of providing assistance to all households that suffer a prime-age adult death from AIDS.

Furthermore, because of the long illness that often precedes death from AIDS, it will often be possible to identify young children who will soon be orphans before the mother or father dies and to enroll them in programs to minimize the nutritional impact. In cases where the mother is HIV-positive, this supplemental feeding could perhaps simultaneously reduce the risk of mother-to-child transmission through breast milk.

In addition, programs that provide food directly to malnourished children and to orphans, rather than to households that include orphans, may avoid the problem of households fostering children primarily to obtain benefits intended for the orphans. While creating an incentive for households to foster children may be desirable in a severe AIDS epidemic, too large an incentive can increase the number of children shifted between households, to the detriment of their welfare. A better approach may be to include children in households where a death is anticipated in community-based nutrition monitoring and feeding programs on the model of the UNICEF-sponsored "village feeding posts."

Finally, including orphans in a program designed to address malnutrition more broadly is more equitable than focusing assistance on AIDS orphans alone. This is particularly true in very poor countries, where an alarmingly high proportion of all children are malnourished. In Kagera, for example, even in households that are less poor and have both parents alive, nearly one-third of children are stunted. In such a situation, providing assistance only to AIDS orphans would neglect a large number of children who are also very needy.

The impact on child schooling. Besides increasing childhood malnutrition, a prime-age adult death in a household is likely to reduce school enrollment. This lack of schooling, perhaps exacerbated by inadequate nutrition, will make it particularly difficult for child survivors of a prime-age adult death to escape poverty. The effects of a prime-age death that could decrease enrollment among children in the household include:

* reducing the ability of families to pay for schooling

* raising the demand for children's labor

* reducing the expected return to adults of investments in children's schooling.

We have already seen how changes in income and expenditure that occur before and after a death would tend to reduce the ability of families to pay school fees and other education costs. Children may also be withdrawn from school to work outside the home, help with chores and farming, or care for an ailing family member. In addition, where prime-age adult mortality is high, parents may be less willing to invest in their children's schooling, either because they fear that the children will not live long enough to realize the higher earnings schooling promises, or because the parents themselves do not expect to live long enough to benefit from their children's future earnings. Similarly, relatives who take in an orphan may be less willing than the parents would have been to invest in the child's schooling. For all these reasons, children who have lost one or both parents are likely to have lower enrollment rates than those whose parents are alive.

Data from the Demographic and Health Surveys on enrollment and orphanhood in nine countries generally support this premise. Figure 4.13 shows the predicted enrollment rates for children by orphanhood status from a regression that holds constant within each country the children's age, gender, urban residence, and quality of housing--a crude proxy for wealth. All of these areas are characterized by low incomes and all except northeast Brazil are in the midst of a generalized HIV/AIDS epidemic. Orphans have significantly lower enrollment rates in every area except Uganda and Zimbabwe; differences in enrollment rates of orphans and nonorphans are greatest in the five sets of bars on the left.

But while the data support the view that orphans are less likely to attend school than other children, they also clearly demonstrate that in most of these countries a very large proportion of children who are not orphans are also not attending school. This indicates that at least in these low-income areas orphanhood is not the major reason for nonenrollment of children; other demand- or supply-side problems in the education sector or the labor market are leading to low enrollments among children irrespective of orphan status. As with nutrition, orphans appear to be specially disadvantaged in terms of education, but because enrollment levels are generally low in these low-income countries, special measures to boost enrollment among orphans would neglect the needs of the many nonenrolled children who are not orphans. Significant improvements in enrollments are therefore likely to require a systemic approach; this is beyond the scope of this book but is already among the educational goals in these countries.

[FIGURE 4.13 OMITTED]

Using the Kagera data, it is possible to consider how other factors may influence the relative enrollment levels of orphans and nonorphans. Using the same distinction between households according to assets, figure 4.14 shows that children in the poorer households are less likely to be enrolled than children in the less-poor households, regardless of orphanhood. Also, the difference in orphan and nonorphan enrollment rates is significant only among the poorer households. Most striking, however, are the low enrollment rates of children ages 7 to 10 regardless of the level of household assets. Thus, although orphans in the poorer households have the lowest enrollment rates, enrollment rates among all young children in Kagera are disturbingly low. Higher enrollments in the 11-to-14-age group are due mostly to the widespread practice of delaying enrollment, which results in many older children attending primary school. These observations, combined with the fact that school fees are lower in Tanzania than in neighboring Kenya and Uganda (both of which have higher enrollment rates), suggest that for some reason households in Kagera are choosing not to enroll their young children in primary school. Whatever the reasons for nonenrollment, they are probably not solely financial, even among the poor.

While household asset levels had only a relatively minor impact on whether or not orphans were enrolled, the study also found significant differences according to whether the deceased household member was female or male. In households where a prime-age female had recently died, children had lower enrollment rates and were more likely to engage in activities in which women typically specialize--cooking, shopping, laundry, cleaning, and collecting water and firewood. For younger children, enrollment was often merely delayed, while older children were likely to drop out and not return to school. Even those children in households with a female death who did not drop out nonetheless spent fewer hours in school than children in other households. Because these effects were not observed in households where a prime-age male died, it appears that children are dropping out of school to perform tasks that had been done by the woman before her death.

Are these findings from Kagera likely to be true elsewhere? Baseline levels of enrollment vary enormously within and across regions, according to the financial costs of schooling, levels of household income, the opportunity costs of children's time, and the economic benefits of schooling. For low-income countries such as those shown in figure 4.13 it is reasonable to expect that the enrollment rates for orphans and nonorphans in the poorer households will be lower than for children in less-poor households, and that the differential enrollment rates between orphans and nonorphans in poor households are greater. Similarly, we would expect the death of a prime-age female to have a larger impact on enrollments than the death of a prime-age male in any community where women provide households with crucial services that, in the event of a woman's death, could be provided by children.

In middle-income countries, where enrollment rates among all children are much higher, orphans in low-income households may account for a larger share of nonenrollments than in poorer countries. In Thailand, for example, as of 1992, 93 percent of primary-school-age children were enrolled and the enrollment rate for secondary schooling was growing rapidly (Shaeffer 1995; Brown and Sittitrai 1995). Although we lack country-wide data on the extent to which orphans are underenrolled in Thailand, one small study found that 13 percent of the school-age children in families where someone was ill and dying of AIDS were withdrawn from school to help support the family (Pitayanon, Kongsin, and Janjaroen 1997).

Two broad policy conclusions can be drawn from this evidence. First, in areas where enrollments are very low, a systemic effort to improve overall enrollment will be more fair, and likely to yield larger benefits, than special programs focused only on orphans. Second, as enrollment rates improve, it becomes increasingly likely that poor orphans will have much lower enrollment rates than other children. Yet even in these situations, special programs for orphans may not be the fairest or most effective answer. So long as a significant proportion of poor children are not enrolled in school, interventions that aim to raise enrollments among the poor will address the schooling of the neediest children, including the neediest orphans.

Poverty Policy in a Severe AIDS Epidemic

The preceding analysis has highlighted several key factors of the impact of AIDS on poverty. First, HIV infects both the rich and the poor. Although it already infects more poor people than rich people and will probably eventually infect a higher proportion of the poor, many HIV infections continue to occur among the nonpoor. Second, the short-term impact of a prime-age adult death is higher for AIDS than for other causes of death, primarily because of the long illness that often precedes an AIDS death. However, because other costs are incurred in all cases of adult death, the overall difference in the short-term impact of AIDS deaths and other deaths is not large. Third, rather than being destroyed by AIDS, households use a variety of mechanisms to cushion the short-term impact of an AIDS or other prime-age adult death. Fourth, we have seen that these coping mechanisms are much less effective in poor households, where more of the coping is at the expense of children's school enrollment and nutritional status. These latter effects are a permanent legacy of the AIDS epidemic that will hamper national efforts to achieve development goals for years to come.

These findings are based on a combination of theoretical analysis and empirical observation. Because the problems are relatively new and there are very few comparable data across countries, or indeed even across regions within a country, we have relied heavily on a single survey in Kagera, Tanzania, with additional observations from three other recent surveys in other countries. As experience with the AIDS epidemic increases and additional data become available, our understanding will certainly improve and some of the observations here will be challenged.

Despite these caveats, the broad findings described point out a key question that policymakers must consider in deciding how to mitigate the impact of AIDS on poverty: which households need help? The short answer, of course, is that the poorest households are most in need of assistance, and these are not necessarily the households hit by AIDS. In poor developing regions, many households that have not been affected by AIDS are likely to be very poor. Among the Kagera households that had not experienced an adult death, one-third of the children under 5 were stunted. Similarly, even in households where both parents were alive, 50 percent of the children under 11 were not enrolled in school.

The lack of a clear correlation between poverty and AIDS is strikingly evident in figure 4.15. The figure presents estimates of the percentage of the population in each district of Kagera living below the absolute poverty line of $124 dollars per person per year in 1991.22 In parentheses below the name of each district is an indicator of the severity of the AIDS epidemic in that district during that year, the mortality rate of adults ages 15 to 50, as calculated from the 1988 census data. The fact that AIDS is not the most important cause of poverty is obvious from the fact that two of the districts where the AIDS epidemic had been extremely severe for a decade, Bukoba Urban and Muleba, had the least problem with poverty, while one of the districts with almost no AIDS, Ngara, had the most poverty. (23)

While the households affected by AIDS are not necessarily poor, the poor households that are affected are much less able to cope than the nonpoor households. Less-poor households in Kagera actually experienced an increase in consumption per capita after the death, while the poorest households experienced a sharp reduction in consumption, especially food consumption, as a result of the death. While the increased consumption in the nonpoor households will not necessarily be observed in other locales, it is reasonable to assume that nonpoor households faced with an adult death will be much better placed to smooth consumption than poor households.

Finally, we have seen that even households that lack access to formal credit and insurance markets nonetheless use a variety of measures to cope with AIDS deaths and other misfortunes. Thus, even if the shock from an AIDS death is larger than that from other misfortunes, and poor households are more vulnerable to the shock than nonpoor households, governments seeking to mitigate the impact of AIDS on poverty must ask themselves whether it is possible to design and implement, either directly or through NGOs, assistance programs that are more efficient and equitable than the informal coping strategies already in place.

These broad findings can be further distilled into three general recommendations for policymakers:

* Not all households experiencing an AIDS death need assistance.

* If survivor assistance is to be offered, it should be targeted to all very poor households that suffer a prime-age adult death, regardless of whether the death was due to AIDS.

* Assistance will do the most good immediately before and after the adult death, during the period when per capita food consumption has fallen but not yet recovered. It need not be permanent.

In addition to these three points, the findings also suggest that there is potentially important synergy between AIDS mitigation and antipoverty programs. For example, the finding that poor households are more vulnerable to the impact of an AIDS death implies that general antipoverty policies can also be AIDS mitigation policies. If general antipoverty policies are effective in reducing the number of poor households, then AIDS deaths will occur in stronger households that can cope at smaller cost to the survivors.

Similarly, the finding that an adult death depresses per capita food consumption in the poorest households by 15 percent implies that AIDS deaths that occur in poor households exacerbate poverty. Thus, when AIDS mitigation policies are targeted to households that were poor before the AIDS death, they are likely to prevent the affected household from slipping further into misery as a result of the death. In this case, AIDS mitigation policies could be effective at limiting the depth, if not the extent, of poverty. (24)

In sum, the results of these studies suggest that antipoverty programs and mitigation programs be integrated. When an antipoverty program is designed for a community with low living standards, consideration should be given to including components that specifically address the needs of the poorest households hit by AIDS deaths. For example, suppose the antipoverty program in a specific AIDS-affected community consists of a labor-intensive public works program. Components that would generate such synergy might include:

* home-based or hostel-based care for the terminally ill to enable healthy adults who would otherwise have provided this care to take advantage of the jobs

* day-care centers or "feeding posts" to enable single parents to take the jobs.

Examples of targeted antipoverty programs in developing countries that could be modified to use adult death in the household as an additional targeting criterion are presented in box 4.9. Conversely, when a mitigation program is established, locating it close to and combining it with a conventional antipoverty program will improve its effectiveness. In an area severely affected by an AIDS epidemic, implementing either program in isolation from the other sacrifices an opportunity for effective development policy.

How Governments Can Cope with the Impact of HIV/AIDS on Hearth Care and Poverty

ALTHOUGH THE SPECIFICS OF THE IMPACTS ON HEALTH and poverty differ, the analysis leads to broadly similar conclusions in both areas. Special government assistance for people infected with HIV/AIDS and their survivors must be weighed carefully against the many other pressing needs that governments face. Well-intentioned government efforts to assist individuals with HIV/AIDS and their families may divert resources from other families that have not been afflicted by HIV/AIDS but are nonetheless suffering from illness, poverty, or both. In particular, HIV-infected patients should be responsible for the same portion of the cost of their care as other patients with similar income and likelihood of infecting others.

Because of HIV's long incubation period, governments may initially underestimate the cost of programs to provide special assistance to those affected by HIV/AIDS. As the number of people who get sick and die from the disease increases, these programs will absorb a growing share of resources that could have been used to address other problems. Because AIDS may divert resources from other pressing problems and commit governments to expenditures from which it will later be politically difficult to withdraw, policymakers in developing countries should be wary of programs that provide special assistance to people with HIV and their families solely on the basis of an HIV diagnosis. At a minimum, they should consider the long-term cost of such programs based on a range of likely assumptions about the course of the epidemic.

Box 4.9 Using Adult Death as a Targeting Criterion for Antipoverty
Programs

THE GENERALLY ACCEPTED STRATEGY FOR REDUCTION
long-term poverty comprises three components:
pro-growth macroeconomic policies, human capital
development, and social safety net programs. While
most countries depend primarily on the first two, some
countries, including some very poor countries, also
have substantial safety net programs that attempt to
provide assistance directly to the poorest households.
An important question for all such programs is how to
identify the households that need help most. Even a
brier summary of the extensive literature on targeting is
beyond the scope of this volume. However, it is important
to note that a number of countries at different income
levels and at different stages of the epidemic
already have in place targeted safety net programs that
could help poor households that suffer a prime-age
adult death. In some of these, including prime-age
adult death as a specific targeting criterion along with
other criteria may help to identify the neediest families.
Box table 4.9 describes five such programs.

Prior to the AIDS epidemic, prime-age adult death
was rare, perhaps too rare to warrant including it as a
targeting criterion. Sadly, it is now common enough
that countries with targeted poverty reduction programs
should consider whether and how to include it
as a targeting criterion. Because this is a new area, impact
evaluation of programs that attempt to do so
would generate important new knowledge.

Using prime-age adult death as a targeting criterion
is likely to have several advantages. Compared
with providing help to families with a death from
HIV/AIDS, it is fairer, since it will include families
with prime-age adult deaths from other causes. Combining
this criterion with others that identify the
household as poor may help identity the neediest families.
Since the death of a prime-age adult is usually
well known to everyone in the community, using this
as a targeting criterion may help program administrators
identify destitute families that might otherwise be
missed. For the same reason, such a criterion may be
effective in minimizing opportunistic responses: feigning
a household death to obtain the benefits of the
targeted program for surviving household members
would be very difficult Finally, including prime-age
adult death as a targeting criterion may help to increase
the political acceptability of safety net programs
among those who do not benefit, since many people
will readily understand that poor households suffering
such a death--and especially the children in such
households--are likely to face severe hardship.

Box Table 4.9 Social Safety Net Programs in Which Prime-Age Adult Death
Could Be Used as an Additional Targeting Criterion, Five Countries

Country and state of the
epidemic                   Program and existing targeting criteria

Zimbabwe (generalized)     Feeding program. Targeted to children in
                           drought-prone areas using nutritional
                           surveillance data. Uses locally grown
                           food and include, nutrition education.

India (concentrated)       Food gram distribution Through publicly
                           operated "ration" shops, the states have
                           distributed grain to anyone requesting it,
                           but under a new government program they are
                           required to limit distribution to those
                           below the poverty line.

Honduras (concentrated)    Food stamps. Distributed through health
                           centers to low-income children under 5 and
                           pregnant and lactating mothers, and through
                           schools to poor mothers and their children
                           grades 1-3.

Bangladesh (nascent)       Microcredit program. Targeted to households
                           owning less than 0.5 acre of land; group
                           lending and peer monitoring serve the poor
                           without collateral and ensure repayment.

Chile (nascent)            Cash transfer. Targeted to rural and urban
                           poor based on their answers to a computer-
                           scored questionnaire.

Sources Besley and Kanbur 1988. Subbarao and others 1996;
van de Walle an Nead 1995.

Notes

(1.) Impacts on other sectors may be substantial in some countries. See Ainsworth and Over (1994b).

(2.) The AIDS epidemic will increase costs, and thereby reduce supply in all sectors of the economy, and will reduce the domestic demand for nontradable goods. Since the value of health care output increases while that of other sectors declines, AIDS will increase the share of health care in national expenditure and product.

(3.) The increased number of deaths among prime-age adults is eventually offset by decreased numbers of deaths in older age groups. Since terminally ill elderly patients use little care in poor countries, this offset can be ignored in the developing countries that are the subject of this report.

(4.) A population that goes from 0 to 5 percent HIV infection in one year will not experience any increase in mortality the first year. Assuming the incubation period has a median of ten years, mortality from HIV would begin to rise in the second year, reach 2.5 per thousand in the tenth year and 5 per thousand in the twentieth year.

(5.) The calculation is: 100 x 0.25x (5.315.0).

(6.) For example, one source assumes that only about 2.5 percent of those African transfusion recipients who receive blood infected with hepatitis B would contract the disease, which would then require 20 years to kill them (Beal, Bontinck, and Fransen 1992, p. 116).

(7.) Gerrler and van der Gaag (1990) show that the poor are more responsive to price (measured as travel time) than the less poor. Lavy and Quigley (1993) and Mwabu, Ainsworth, and Nyamete (1993) provide recent evidence on the elasticity of demand with respect to quality. See Carrin, Perrot, and Sergent (1994) and Gerder and Hammer (1997) for reviews of the literature.

(8.) Barnum and Kutzin (1993, tables 3.3, 3.4) give occupancy rates for the developing world that range from 31 percent in Belize and 46 percent in Fiji to 116 and 129 percent in Malawi and Lesotho, respectively. But the pattern observed in Kenya (Collins and others 1996) of a positive correlation between the occupancy rate in a public facility and its degree of medical sophistication is common within many public health systems, especially if the user charge is equally low at all levels of care.

(9.) As part of a national health care reform process, the Kenyan government decreed a fee increase throughout the country in December 1989, which is after the 1988/89 data on Kenyatta Hospital patients were collected in the Floyd and Gilks study. Since AIDS patients were exempted from fees imposed during this period, care at the hospital simultaneously became more expensive for the HIV-negative and less expensive for the HIV-positive. This change in relative prices between the two groups probably accounts for part of the change in admission mix seen in figure 4.2. Collins and others 1996 describe health financing reform in Kenya.

(10.) Since Tanzania's national prevalence rate only recently attained 5 percent, the epidemic's full impact on mortality and health care expenditures are still in the future. Expenditure data on Mexico and Tanzania are from figure 4.6 and Shepard and others (backgroundpaper, 1996).

(11.) Insurance policies suffer to varying degrees from "moral hazard," when the amount of the loss incurred depends upon whether or not the individual is insured. For example, insured houses are somewhat more likely to burn than uninsured ones. The result of the problem is that insurance against a specific risk becomes more expensive per dollar of risk coverage and, in the extreme, may not be available at all (Arrow 1963). The problem arises regardless of whether the insurance is private or public and is particularly severe with health insurance, where it is controlled in practice by coinsurance provisions. These provisions typically specify higher coinsurance rates on highly price-elastic services like outpatient visits or psychiatric care than on less-elastic ones like inpatient services.

(12.) Areas of Africa studied include areas surrounding Lake Victoria--Rakai (Serwadda and others 1992; background paper, Menon and others 1996b); the Masaka districts of Uganda; Kagera (Killewo and others 1990) and Mwanza (Barongo and others 1992; Grosskurth and others 1995a,b) regions of Tanzania; and Kigali, the capital of Rwanda (Allen and others 1991).

(13.) One study converts consumption in developing countries to parity with the U.S. dollar (using the purchasing power parity indices). It estimates that two of every three persons in the developing world, and, in Africa, four out of five, spend fewer than two 1985 U.S. dollars a day (Chen, Datt, and Ravallion 1994), a level of consumption that suggests substantial poverty by almost any standard.

(14.) Surveys of survivors in the Kagera study found that, of the 264 household members age 15 to 50 who died during or in the year before the survey, 82 percent sought treatment, while 15 percent sought no medical care at all (survivors were unsure about the other 3 percent). Among men, about 90 percent of those who died of AIDS were reported to have sought medical care, compared with only 66 percent of those who died of other causes. (About 85 percent of women sought care, regardless of the cause of their death.) For both men and women, the percentage incurring our-of-pocket medical expenses was higher for those who died of AIDS (70%) than for those who died of other causes (59%).

(15.) Since everyone must eventually be buried, that portion of the funeral costs that would have occurred anyway, discounted to the present, should not be attributed to the prime-age death. However, when the death occurs many years before it would have otherwise been expected, as is the case with most AIDS deaths, the discounted value of the future funeral costs is quite small in comparison with the actual cost of the funeral.

(16.) The authors of the Thai survey analysis did not analyze direct costs by the gender of the deceased.

(17.) Analysis of a single wave of data such as this does not show the direction of causality: were the expenditure patterns the result of the death or were households with certain expenditure patterns more likely to suffer a death? Figure 4.11 demonstrates from an analysis of changes in consumption over time that the differences between the two pie charts are largely due to the impact of the death.

(18.) In most of the 29 households, the person with AIDS died; in a few cases the AIDS patient moved to another household.

(19.) The difference is statistically significant at the 0.01 level on the Rakai sample, but not significant in the Kagera sample, perhaps because it is a smaller sample.

(20.) The initial differences between Kagera and Rakai households that later suffered an adult death and those that did not are intriguing. The former began the survey period with somewhat lower ratios of dependents to adults, slightly more household members and assets, and greater participation in ROSCAs. All of these drop after the death, causing the households suffering a death to resemble the other households more after the death than before. There are two possible explanations for this. On the one hand, it is possible that households that anticipate a death prepare by accumulating assets, recruiting additional household members, joining a ROSCA, and so on. Such adaptive coping in a risky environment is undoubtedly part of the explanation. On the other hand, there is also evidence that AIDS-affected households in the samples were on average somewhat less poor than their neighbors. The initial differences cited above between the households that later suffered a death and those that did not could simply be indicative of the greater affluence of the average AIDS-affected households.

(21.) Because averages are pulled upward by extreme values and some households received as much as $5,000 in private transfers, the mean amount of assistance received in wave 4 by households that had experienced a death was $192, much larger than the median.

(22.) The figure of $124 is the 1996 dollar equivalent of 31,000 Tanzanian shillings at 1991 prices. See Ferreira and Goodhart (1995) and World Bank (1996b) for a discussion of poverty in Tanzania and details on the derivation of this and other poverty lines for Tanzania.

(23.) The recent influx of refugees to Ngara District from Rwanda and Burundi may be exacerbating the AIDS epidemic there. See CARE and ODA (1994).

(24.) That is, AIDS mitigation policies targeted to the poor may reduce the poverty gap if not the poverty head count.

Table 4.1 Annual Cost per Patient of Palliative Care and Treatment
of Opportunistic Illnesses, Sub-Saharan Africa and Thailand

(1996 dollars)

                                    Diagnosed episodes per
                                      100 patient-years

                                  Sub-Saharan
Symptom or illness                     Africa    Thailand (b)

Palliative care (c,c)

Diarrhea                                       63
Scaling skin rash                              15
Itching skin rash                              52
Cough                                         120
Fever                                         105
Headache                                       52
Pain, mild                                     52
Pain, severe                                   17
Nausea                                         75
Shortness of breath                            43
Subtotal                                  594            594

Treatment of inexpensive OIs

Tuberculosis (d)                         47.5             40
P carinii pneumonia                         3             20
Toxoplasmosis                               0              2
Oral thrush                                77             77
Esophageal thrush                          14             14
Pneumonia/septicemia                       20             20
Subtotal                                161.5            173

Treatment of expensive OIs

Cryptococcosis                              5             25
Herpes simplex virus                        5             18
Penicilliosis                               0              9
Other OIs including:
  Cylomegalo virus
  Mycobacterium avium/complex            19.5             19
Subtotal                                 29 5             71
Inpatient days (f)                      3.000          3.000
Outpatient visits (f)                   1,200          1,200

Grand totals per case

Palliative plus inexpensive OIs
Palliative plus all OIs

                                    Cost per episode (2)

                                  Sub-Saharan
Symptom or illness                     Africa    Thailand

Palliative care (c,c)

Diarrhea                                    13.00
Scaling skin rash                            1.50
Itching skin rash                            2.00
Cough                                        1.40
Fever                                        0.60
Headache                                     0.25
Pain, mild                                   1.12
Pain, severe                                14.00
Nausea                                       1.75
Shortness of breath                          6.50
Subtotal

Treatment of inexpensive OIs

Tuberculosis (d)                        37.00     261.88
P carinii pneumonia                      8.00     207.76
Toxoplasmosis                            8.00     207.76
Oral thrush                              2 00       2.48
Esophageal thrush                       10.00       4.96
Pneumonia/septicemia                    60.00      25.38
Subtotal

Treatment of expensive OIs

Cryptococcosis                         870.70   1,741.40
Herpes simplex virus                   140.00      46.80
Penicilliosis                        1,852.50     697.40
Other OIs including:
  Cylomegalo virus
  Mycobacterium avium/complex          717.88     717.88
Subtotal
Inpatient days (f)                       7.25      22.44
Outpatient visits (f)                    2.50      13.60

Grand totals per case

Palliative plus inexpensive OIs
Palliative plus all OIs

                                     Average cost per
                                       patient-year

                                  Sub-Saharan
Symptom or illness                    Africa    Thailand

Palliative care (c,c)

Diarrhea                                     8.19
Scaling skin rash                            0.23
Itching skin rash                            1.04
Cough                                        1.68
Fever                                        0.63
Headache                                     0.13
Pain, mild                                   0.58
Pain, severe                                 2.38
Nausea                                       1.31
Shortness of breath                          2.80
Subtotal                               18 96       18.96

Treatment of inexpensive OIs

Tuberculosis (d)                       17.58      104.75
P carinii pneumonia                     0.24       41.55
Toxoplasmosis                             --        4.16
Oral thrush                             1.54        1.91
Esophageal thrush                       1.40        0.69
Pneumonia/septicemia                   12.00        5.08
Subtotal                               32 76      158.14

Treatment of expensive OIs

Cryptococcosis                         43.54      435.35
Herpes simplex virus                    7.00        8.42
Penicilliosis                             --       62.77
Other OIs including:
  Cylomegalo virus
  Mycobacterium avium/complex         139.99      136.40
Subtotal                              190.52      642.94
Inpatient days (f)                    217.50      673.34
Outpatient visits (f)                  30.00      163.20

Grand totals per case

Palliative plus inexpensive OIs       299 22    1,013.65
Palliative plus all OIs               489 74    1.656.59

(a.) Costs per episode arc estimated in Perriens (background paper,
1996)

(b.) Frequency of various symptoms and OIs for Thailand are from
Perriens (background paper, 1996), or Kaplan and others (1996)
or, where both give a value, an average of the two

(c.) The frequency and treatment costs of symptoms listed under
palliative care are assumed to be the same in Sub-Saharan Africa
and Thailand

(d.) In Zambia, experience suggests that preventing tuberculosis in
a group of HIV-infected patients costs approximately the same as
treating those in the group who get the disease (Foster,
Godrey-Faussett, and Porter 1997).

(e.) Since palliative care involves generic drugs, these costs should
be similar in all countries able to buy essential drugs in bulk through
international tenders.

(f.) Patients in Thailand pay about 30 percent of these costs for
drugs, inpatient days, and outpatient visits. The cost per patient-day
in Sub-Saharan Africa is taken from Chela and others (1994)

Table 4.2 Annual Cost of Antiretroviral Therapy, Thailand,
and the United Kingdom or the United States

(dollars)

                                          Daily or unit cost
Inputs
                           Daily dose                 U.K. or
Drugs                         (mg)       Thailand       U.S.

Nucleoside RT inhibitors

Zidovudine (AZT)               500         1.80          7.50
Didanosine (ddl)               400         5.80          5.75
Zakitabine (ddC)              2.25         5.40          6.81
Stavudme (ddT)                  80           --          7.95
Lamivudine (3TC)               300           --          7.37
Protease inhibitors

Saquinavir (SQV)             1.800               19.08
Ritonavir (RTV)              1 200               21.95
Indinavir (IDV)              2.400               11.84

                           Times per
Monitoring                    year

Blood count                  12.00         2.00         21.00
Blood chemistry               4.00        12.00         35 00
CD4 count                     4.00        30 00        157.00
RNA viral load                3.50        50.00        100 00
Additional outpatient        12.00        15.60        100.00
  visits

Total for triple-drug
therapy (a)

AZT. ddl. and IDV
AZT. ddl. and RTV

                                             Annual cost
Inputs
                           Daily dose                 U.K. or
Drugs                         (mg)       Thailand       U.S.

Nucleoside RT inhibitors

Zidovudine (AZT)               500         657         2.738
Didanosine (ddl)               400        2.117        2.099
Zakitabine (ddC)              2.25        1.971        2.486
Stavudme (ddT)                  80          --         2.900
Lamivudine (3TC)               300          --         2.690
Protease inhibitors

Saquinavir (SQV)             1.800               6.870
Ritonavir (RTV)              1 200               8.010
Indinavir (IDV)              2.400               4.320

                           Times per
Monitoring                    year

Blood count                  12.00          24           252
Blood chemistry               4.00          48           140
CD4 count                     4.00         120           628
RNA viral load                3.50         175           350
Additional outpatient        12.00         163         1.200
  visits

Total for triple-drug
therapy (a)

AZT. ddl. and IDV                         9.595       19.803
AZT. ddl. and RTV                        13.285       23.493

-- Data not available or nor applicable

(a) Triple-drug therapy consists of two of first group of drugs
plus one of second group plus monitoring. Drugs are given daily.
Which three drugs should be combined as a matter of current
research and probably varies by patient.

Source: Background paper. Perriens 1996; Prescott and others
1997; and Moore and Bartlett 1996.

Table 4.3 Deaths per Thousand Adults Caused
by a Constant Rate of HIV Infection

                  Median time from
                 infection to death
HIV prevalence
rate {percent)   10 years   5 years

0                       0         0
5                     5.3      11.1
10                   10.5      22.2
It                   15.8      33.3
20                   21.1      44.4
30                   31.6      66.7
50                   52.6     111.1
1U0                 105.3     222.2

Note. The death rites in columns
2 and 3 are calculated by multiplying
the prevalence rate from column
1 by 20/(2M.-1). where M is the median
time from infection to death
This formula assumes a steady-state
epidemic in which incidence is constant
and a proportion 1/(2M of
those infected in a given year die in
each of 2M subsequent years. In the
absence of HIV, the baseline mortality
in rate per thousand adults age 15
to 50 ranges from 0.8 in industrial
countries to as high as 5 in some
parts of Sub-Saharan Africa.

Table 4.4 Evidence of Possible Crowding Out of HIV-Negative
by HIV-Positive Patients, Six Countries, circa 1995

                                              Percentage of beds
                                                 occupied by
City                         Hospital        HIV-positive patients

Chiang Mai Thailand         Provincial                50
Kinshasa, Congo DR (a)       Mama Yemo                50
Kigali, Rwanda                Central                 60
Burumbura, Burundi         Prince Regent              70
Nairobi, Kenya           Kenvatta National          59 (b)
                             Hospital
Kampala, Uganda           Rubaga Hospital             56

(a) Formerly Zaire

(b) Since Floyd and Gilks found the average length of stay
to be identical accross HIV-positive and negative patients,
the ratio of HIV-positive to the total admissions is a useful
estimate of the proportion of beds occupied by HIV-positive
patients. Thus this entry is calculated from
figure 4.2 as 9.6/24.9.

Source: First four hospitals, van Praag 1996; Kenyatta Hospital,
Floyd and Gilks 1996; Rubaga Hospital, Tembo and others 1994.

Table 4.5 Asset Ownership in Households with and without
an Adult Death

(percentage of total households)

                 Rakai District. Uganda     Kagera Region, Tanzania

                Households    Households    Households    Households
                    w/o          with           w/o          with
Asset           adult death   adult death   adult death   adult death

Bicycle
  First visit       34            39            27            26
  Last visit        41            35            29            28
Radio
  First visit       36            40            31            36
  Last visit        37            36            35            35

Source: Authors calculations background paper. Menon and others 1996.

Figure 4.1 Percentage of AIDS Patients with Three Opportunistic
Infections, Seven Countries

                P. carinii pneumonia   Tuberculosis   Cryptococcosis

Congo DR (a)              2                 41              19
India                     1                 68               5
Cote d'Ivolre             4                 54               5
Thailand                 13                 31              24
Mexico                   22                 30               9
Brazil                   29                 17               5
United States            64                  3               7

Note: Since only three of the 20 or more OIs are included, and since a
patient may suffer from many OIs before death, percentages for a given
country need not total 100 percent.

a. Formerly Zaire.

Source: Background paper, Perriens 1996; Kaplan and others 1996.

Note: Table made from bar graph.

Figure 4.5 Percentage of AIDS-Related and Total Treatment Expenditures
Financed by the National Government, Four Selected Countries and Sao
Paulo State, Brazil, 1994

                AIDS expenditures   All health expenditures

Tanzania               28                    28.5
Cote d'Ivolre          43                    48.7
Thailand               56                    20.4
Mexico                 49                    75.1
Sao Paulo              76                    36.1
State, Brazil
Average                50                    42.0

Governments often provide different
levels of health care subsidies
depending on whether or not the
patient is infected with HIV.

Source: Backgroundpaper, Shepard and others 1996.

Note: Table made from bar graph.

Figure 4.6 Average Medical and Funeral Expenditures,
by Gender and Cause of Death, Kagera, Tanzania, 1991-93

            Medical   Funeral

Males         22        56
w/o AIDS

Males         80        77
with AIDS

Females       25        73
w/o AIDS

Females       38        54
with AIDS

Note: Throughout this report currency amounts have been converted
from current Tanzanian shillings to 1996 U.S. dollars. The conversion
procedure involves three steps: (1) convert current shillings to 1991
shillings using the project's price deflator; (2) convert 1991
shillings to 1991 dollar amounts at 289 shillings per dollar; and (3)
inflate to 1996 dollars by multiplying by 1.15. Sample: deaths of 264
adult household members ages 15 to 50. Source: Over and others,
forthcoming.

Note: Table made from bar graph.

Figure 4.7 Consumption in Kagera, Tanzania, Households by Whether
the Household Experienced a Death in the Past Year (Results from
Wave 1 of Kagera Study)

Households not experiencing an adult death In the past year

Housing & utilities     12%
Selected nonfood         5%
Purchased               21%
Household expenditure   (392,838 Tsh.)
Home-produced food      36%
Other nonfood           26%

Breakdown of
selected nonfood
expenditure

Funerals               0.6%
Remittances sent       1.8%
Health care
Educations             1.3%

Note: Of the 6,395 TSh. spent on health care in the average sample
household, TSh. 748, or 11%, was spent on the care of nonadult
household members who had died.

Households experiencing an adult death In the past year

Housing & utilities     12%
Selected nonfood        10%
Purchased               19%
Household expenditure   (362,826 TSh.)
Home-produced food      43%
Other nonfood           16%

Breakdown of
selected nonfood
expenditure

Funerals               5.4%
Remittances sent       0.9%
Health care
Educations             1.1%

Note: Of the 9,453 TSh. spent on health care in the average sample
household, TSh. 6,069, or 64%, was spent on the care of household
members who had died.

Source: Over and others, forthcoming.

Purchased food accounted for a
smaller share of total consumption
in households that suffered a death
(bottom panel) than in households
that did not (top panel). Households
that suffered a death increased their
consumption of home-produced food,
but this only partially offset reduced
consumption of purchased food.

Note: Table made from pie chart.

Figure 4.9 Median Value of Assistance Received among Sample Households
Receiving Transfers, by Source, Wave, and Occurrence of Adult Death,
1991-94

           Private transfers   Program transfers

            No     Panel          No    Panel
           death   death        death   death

Wave 1      13      21            5       7
Wave 4      20      53            6      16

Households that suffered a death
between the first and fourth "wave" of
data collection received larger private
and program transfers than households
that did not suffer a death during
this period. For these bereaved
families, private transfers were much
larger than program transfers.

Source: Over and others, forthcoming.

Note: Table made from bar graph.

Figure 4.10 Average Cost per Year of Survivor Assistance in 1992 by
Government and Nongovernmental Organizations, Kagera, Tanzania

Average cost per unit of output (1996 dollars)

                  Fixed cost   Variable cost

Home care             91            126
for PWAs

Foster                59            126
care

Feeding               58             11
post

"Basic need"          33             14
to HHs

Educational           6               7
support

Note: PWA = person with AIDS, HH = household. Other costs
are per child per year.

Source: Over and Koda, forthcoming.

Note: Table made from bar graph.

Figure 4.11 Short-Term Impact of the Death of an Adult Household
Member on Food Expenditure and Consumption per Adult Equivalent
Member, Kagera, Tanzania, 1991-93

              Nonpoor   Poorest 50%

Food             12          10
expenditure

Food            -32         -15
consumption

Among households in Kagera,
Tanzania, that suffered a prime-age
adult death, food expenditure and
consumption declined for the poorer
half of households but increased for
the others.

Note: The poorest 50 percent of households are those with less than
the median value of assets per member in wave 1 of the survey, which
was about $415 per adult equivalent member in 1996 dollars. The sample
is 64 households that experienced an adult death between the first and
last waves of the Kagera survey.

Source: Over and others, forthcoming.

Note: Table made from bar graph.

Figure 4.12 Stunting among Orphaned and Nonorphaned Children under 5,
by Household Assets, Kagera, Tanzania

                  Nonorphans   Orphans

Households with       29         50
more assets

Households with       39         51
fewer assets

In Kagera, Tanzania, half the children
who had lost one or both parents were
stunted, regardless of the level of
household assets.

Source: Kagera data, authors' calculations.

Note: Table made from bar graph.

Figure 4.14 Enrollment Rates by Age, Orphanhood, and Household Assets,
Kagera, Tanzania, 1991-93

Age of   More assets,   More assets,   Fewer assets,   Fewer assets,
child     nonorphan        orphan        nonorphan        orphan

7-10          44             42             35              28
11-14         87             84             76              66
15-19         54             56             49              42

In Kagera, Tanzania, orphans in
households with fewer assets were
least likely to be enrolled in school;
but even nonorphans in households
with more assets and both parents
alive had low enrollment rates.

Source: Ainsworth and Koda 1993 and authors' calculations.

Note: Table made from bar graph.

Figure 4.15 Poverty in Kagera Region, by Distnct and Adult Mortali
Rate, 1991

District

Bukoba       0
Urban
(15.2)

Bukoba       7
Rural
14.7)

Muleba       1
13.7)

Biharamulo   11
(5.1)

Karagwe      0
(5.0)

Ngara        57
(5.0)

AIDS is not necessarily more widespread
in poorer districts. Among the
districts comprising Tanzania's
Kagera region, some have severe epidemics
but low rates of poverty; the
district with the most poverty (Ngaral
has a smaller epidemic.

Note: Adult mortality rate is per 1,000 for 1988.

Source: Gupta, Mujinja, and Over, forthcoming.

Note: Table made from bar graph.
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Publication:Confronting AIDS: Public Priorities In a Global Epidemic
Date:Oct 1, 1997
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