Estimating the government public economic benefits attributed to investing in assisted reproductive technology: a South African case study.

James Kiarie,Mark P Connolly,Thabo Matsaseng,Gitau Mburu,Saswat Panda

doi:10.1016/j.rbms.2020.08.001

Abstract

Limited resources and high treatment costs are arguments often used in many public health systems in low- and middle-income countries to justify providing limited treatments for people with infertility. In this analysis, we apply a government public economic perspective to evaluate public subsidy for in-vitro fertilization (IVF) in South Africa. A fiscal model was developed that considered lifetime direct and indirect taxes paid and government transfers received by a child conceived by IVF. The model was constructed from public data sources and was adjusted for mortality, age-specific educational costs, participation in the informal economy, proportions of persons receiving social grants, and health costs. Based on current proportions of individuals receiving social grants and average payments, including education and health costs, we estimate each citizen will receive ZAR513,165 (USD35,587) in transfers over their lifetime. Based on inflated age-specific earnings, we estimate lifetime direct and indirect taxes paid per citizen of ZAR452,869 (USD31,405) and ZAR494,521 (USD34,294), respectively, which also includes adjustments for the proportions of persons participating in the informal economy. The lifetime net tax after deducting transfers was estimated to be ZAR434,225 (USD31,112) per person. Based on the average IVF investment cost needed to achieve one live birth, the fiscal return on investment (ROI) for the South African Government is 5.64. Varying the discount rate from 4% to 7%, the ROI ranged from 9.54 to 1.53, respectively. Positive economic benefits can emanate from public financing of IVF. The fiscal analytic framework described here can be a useful approach for health services to evaluate future public economic benefits.

Highlights

Infertility is a disease that causes considerable suffering and hardship for those affected, and represents a significant public health burden (Dyer et al, 2016)
A public economic modelling framework consistent with established modelling practices was developed to evaluate the projected lifetime taxes paid and government transfers received from the perspective of the South African Government following the birth of an average child conceived by in-vitro fertilization (IVF) with a base year of 2018 (Mauskopf et al, 2018)
Wages were adjusted for the proportion of people within the informal economy, where wages are often lower. For those participating in the informal economy, we considered that consumption spending would be taxed at the normal value added tax (VAT) rate

Summary

Introduction

Infertility is a disease that causes considerable suffering and hardship for those affected, and represents a significant public health burden (Dyer et al, 2016). The consequences of infertility and childlessness in low- and middle-income countries (LMICs) can be even more pronounced due to cultural norms around fertility and gender roles in which the burden is often placed disproportionately on women (Cui, 2010; Rouchou, 2013). The most recent estimate reports that approximately 9.65 million women have primary or secondary infertility in sub-Saharan Africa (Mascarenhas et al, 2012). In South Africa, the estimated need for assisted reproduction is 76,500 cycles per year. Only 6.4% (Dyer and Kruger, 2012; SARA, 2014) of this need is met due to low access to assisted reproductive technology (ART) services. Access to ART involves costs to patients (Huyser and Boyd, 2013)

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Conclusion