HIV and AIDS service delivery (in) efficiency in Malawi : a transaction cost economics analysis of the antiretroviral therapy programme.

Abstract

The gains from antiretroviral therapy have been remarkable over the years, but the global decline and flattening of aid has heightened the concerns for the sustainability of the diagnosis and treatment programmes, and the global HIV and AIDS response in general. Consequently, the heavy dependence on external financing, and limited scope for increased domestic funding in low- and middle-income countries heavily impacted by HIV and AIDS has heightened calls for efficient governance of the response. Concurrently, the ART services embedded in the public healthcare governance show inefficiencies, with high transaction or coordination costs as a key factor contributing to inefficiency. Conventional healthcare economic evaluation approaches have tended to ignore the role that transaction costs minimisation can potentially play towards efficient ART service delivery and contribute towards sustainability. Using a Transaction Cost Economics (TCE) lens, the aim of this research is an analysis of the HIV and AIDS ART governance in Malawi to identify the types of inefficiency, sources of transaction costs, their effect on ART programme efficiency, and the ART programme governance conformity with TCE theory. The specific objectives of the research are: a) to assess the (in) efficiency of the HIV and AIDS ART programme in Malawi and determine the types of inefficiency in the programme; b) to assess the effect of transaction costs on the HIV and AIDS ART programme efficiency in Malawi; c) to assess the degree to which the HIV and AIDS ART programme in Malawi conforms with the TCE economic governance theory, and, d) to determine the sources of transaction costs in the HIV and AIDS ART programme in Malawi and determine whether these costs are due to noncompliance with the prescription of transaction cost economics theory. The study used quantitative and qualitative approaches to collect data and analyse the application of TCE in the Malawi HIV and AIDS ART programme governance. Inefficiency estimation uses data envelopment analysis (DEA), a non-parametric linear programming efficiency estimation technique, econometric and statistical methods based on data extracted from the Ministry of Health Electronic Management Records (EMR). Qualitative data were collected from HIV and AIDS policy and programme managers, and service providers, which was analysed using thematic analysis to report on the key features of the HIV and AIDS ART programme governance in Malawi and its conformity with TCE theory. The results show that the HIV and AIDS ART programme in Malawi operates at inefficient levels with an estimated overall technical efficiency score of 92%, suggesting output can be increased by 8% with existing inputs. It displays increasing and decreasing returns to scale for 23% and 69% of the health facilities providing ART, suggesting that the facilities are operating at too small and too big a scale to be able to take advantage of economies of scale, respectively. Some border district facilities display high technical efficiency levels, largely due to high client volumes, but this may hide the strain on service delivery due to extension of services to foreign country citizens. The results further show that transaction costs are negatively correlated with health facility efficiency, suggesting that their minimisation should contribute to efficient facility-based ART provision in Malawi. Additionally, the design and implementation of the ART programme is found to conform with TCE theory prescriptions and harbours the governance instruments designed to reduce transaction costs that arise from ART transaction asset specificity, uncertainty and complexity. The main sources of transaction costs are programme coordination and administration and ART financing administration. An excessive ART aid administration safeguards framework by donors and a parallel healthcare supply chain management structure tend to increase transaction costs, and thus, violate the TCE theory efficiency principles. While ART governance design conforms to TCE theory prescriptions, the ART programme is assessed to be inefficient. Policy interventions that increase the use of excess capacity and align demand with facility allocation should assist to improve HIV programme efficiency in Malawi. An explicit focus on the sources and incidence of transaction costs would further assist to devise measures to minimise them and contribute towards efficient HIV and AIDS ART service delivery.