The allocation of resources for animal health.

Economics is too important to be left to the experts. This paper is therefore mainly for animal health policy-makers who are not economists but want a better appreciation of how economics can contribute to resource allocation decisions. First, the methodology of economic analysis is outlined with the objective of dispelling criticisms of its simplifying assumption of rationality. Then, unusual in economics but more familiar to biological and veterinary scientists, the technical aspects of transforming resources into products are discussed. Economics' unique contribution is to establish criteria enabling society to obtain maximum value from the production and distribution of goods and services (products) from scarce resources. Animal disease reduces the efficiency of this process. Value is intangible, but people reveal how much they value (i.e. feel a want or need for) products by what they actually consume, in quality and quantity. Animal products, and so implicitly animals themselves, are an example. The strength of people's preferences is reflected both in the prices they pay for market goods and services, and by their political votes where markets do not exist. Importantly, there is a difference between financial value (what the consumer pays for a good or service) and economic value (the maximum amount of money they would be prepared to pay for it). Allocating resources for animal health creates both costs and benefits, financial and economic. Moreover, costs and benefits are both private and social because of externalities, a major consideration in infectious diseases. Where production decisions with animal health implications are made exclusively for private benefit, government has a role in providing incentives for animal sectors to act in ways that result in socially efficient outcomes.

L'économie est trop importante pour être laissée entre les seules mains des experts. C'est pourquoi cet article s'adresse principalement aux responsables des politiques de santé animale qui ne sont pas économistes mais qui souhaitent néanmoins évaluer l'apport de l'économie aux décisions relatives à l'affectation des ressources. L'auteur commence par rappeler la méthodologie de l'analyse économique afin de réfuter les critiques sur le caractère supposément simplificateur du postulat de rationalité. Il examine ensuite les aspects techniques liés à la transformation de ressources en produits, concept familier pour les biologistes et les chercheurs en médecine vétérinaire mais moins courant chez les économistes. La véritable contribution de l'économie consiste à déterminer les critères qui permettent à une société de valoriser le plus possible la production et la distribution de biens et de services (produits) à partir de ressources limitées. Les maladies animales compromettent l'efficacité de ce processus. La valeur est intangible par nature mais les individus expriment la valeur qu'ils attachent à un produit (c'est-à-dire le désir ou le besoin qu'ils ont de ce produit) à travers leur consommation, au plan qualitatif et quantitatif. Les produits d'origine animale et partant, implicitement, les animaux eux-mêmes illustrent parfaitement ce phénomène. L'influence des préférences des individus se manifeste par le prix qu'ils sont disposés à payer pour les biens et les services pour lesquels il existe un marché, et par le vote politique pour tout ce qui est extérieur au marché. La distinction entre la valeur financière (prix payé par le consommateur pour un bien ou un service) et la valeur économique (le montant le plus élevé qu'il serait disposé à payer pour ce même bien ou service) est un aspect important. Les ressources allouées à la santé animale génèrent à la fois des coûts et des bénéfices, financiers et économiques. De plus, du fait des externalités, ces coûts et bénéfices sont de nature tant privée que sociale, facteur essentiel à prendre en compte pour les maladies infectieuses. Dans les situations où les décisions en matière de production animale obéissent aux seuls impératifs du profit privé, sans tenir compte des répercussions sur la santé animale, les gouvernements ont un rôle incitatif à jouer pour que le secteur de l'élevage infléchisse son action en vue de résultats efficients pour la société.

La economía es demasiado importante para abandonarla a los expertos. Por ello este artículo va dirigido sobre todo a los planificadores de políticas zoosanitarias que no son economistas pero desean tener una idea más clara de cómo puede ayudar la economía a tomar decisiones sobre la asignación de los recursos. Ante todo el autor presenta sucintamente la metodología del análisis económico, a fin de refutar las críticas que achacan una excesiva simplificación al postulado de la racionalidad. Después aborda algo inusual en economía, pero más familiar para biólogos y veterinarios: los aspectos técnicos de la transformación de los recursos en productos. La singular aportación de la economía estriba en definir criterios que permiten a la sociedad extraer el máximo «valor¼ de la producción y distribución de bienes y servicios (productos) a partir de recursos escasos. Las enfermedades animales restan eficiencia a este proceso. El «valor¼ es algo intangible, pero las personas revelan cuánto valoran un producto (es decir, hasta qué punto sienten que lo desean o lo necesitan) por lo que en la práctica consumen, tanto cualitativa como cuantitativamente. Los productos animales, y por ende, implícitamente, los propios animales, son ejemplo de ello. La fuerza de las preferencias de la gente se manifiesta en el precio que paga por bienes y servicios, cuando hay un mercado para ellos, o por su voto político, cuando no lo hay. Es importante señalar que hay una diferencia entre el valor monetario (lo que pagan los consumidores por un bien o servicio) y el valor económico (la cantidad máxima de dinero que estarían dispuestos a pagar por él). La forma en que se distribuyen los recursos en sanidad animal genera costos y beneficios, tanto monetarios como económicos. Además, esos costos y beneficios son tanto privados como sociales debido a la existencia de externalidades, factor este de gran importancia en el caso de las enfermedades infecciosas. Allí donde las decisiones de producción que tienen consecuencias zoosanitarias se rijan únicamente por el criterio del beneficio privado, las administraciones públicas deben cumplir la función de ofrecer incentivos a los sectores ligados a la producción animal para que su proceder se traduzca en resultados socialmente eficientes.

A Framework for Categorization of the Economic Impacts of Outbreaks of Highly Contagious Livestock Diseases.

A framework for categorization of economic impacts of outbreaks of highly contagious livestock diseases (HCLD) is presented. This framework interprets veterinary measures to control HCLD outbreaks with reference to economic definitions of costs and benefits, and the implications for value losses both for different stakeholders affected and society as a whole. Four cost categories are identified, that is virus control-related direct costs (DC), spread prevention and zoning-related direct consequential costs (DCC), market and price disruption-related costs during (indirect consequential costs, ICC) and after the outbreak (aftermath costs, AC). The framework is used to review existing literature on cost estimation for different stakeholders. This review shows considerable differences between studies, making comparison of results difficult and susceptible to misunderstanding. It is concluded that the framework provides a logical basis for all future analyses of the economic impacts of HCLD.

Economic principles for resource allocation decisions at national level to mitigate the effects of disease in farm animal populations.

This paper originated in a project to develop a practical, generic tool for the economic evaluation of surveillance for farm animal diseases at national level by a state veterinary service. Fundamental to that process is integration of epidemiological and economic perspectives. Using a generalized example of epidemic disease, we show that an epidemic curve maps into its economic equivalent, a disease mitigation function, that traces the relationship between value losses avoided and mitigation resources expended. Crucially, elementary economic principles show that mitigation, defined as loss reduction achieved by surveillance and intervention, must be explicitly conceptualized as a three-variable process, and the relative contributions of surveillance and intervention resources investigated with regard to the substitution possibilities between them. Modelling the resultant mitigation surfaces for different diseases should become a standard approach to animal health policy analysis for economic efficiency, a contribution to the evolving agenda for animal health economics research.

An economic model to evaluate the mitigation programme for bovine viral diarrhoea in Switzerland.

Economic analyses are indispensable as sources of information to help policy makers make decisions about mitigation resource use. The aim of this study was to conduct an economic evaluation of the Swiss national mitigation programme for bovine viral diarrhoea virus (BVDV), which was implemented in 2008 and concludes in 2017. The eradication phase of the mitigation programme comprised testing and slaughtering of all persistently infected (PI) animals found. First, the whole population was antigen tested and all PI cattle removed. Since October 2008, all newborn calves have been subject to antigen testing to identify and slaughter PI calves. All mothers of PI calves were retested and slaughtered if the test was positive. Antigen testing in calves and elimination of virus-carriers was envisaged to be conducted until the end of 2011. Subsequently, a surveillance programme will document disease freedom or detect disease if it recurs. Four alternative surveillance strategies based on antibody testing in blood from newborn calves and/or milk from primiparous cows were proposed by Federal Veterinary Office servants in charge of the BVDV mitigation programme. A simple economic spreadsheet model was developed to estimate and compare the costs and benefits of the BVDV mitigation programme. In an independent project, the impact of the mitigation programme on the disease dynamics in the population was simulated using a stochastic compartment model. Mitigation costs accrued from materials, labour, and processes such as handling and testing samples, and recording results. Benefits were disease costs avoided by having the mitigation programme in place compared to a baseline of endemic disease equilibrium. Cumulative eradication costs and benefits were estimated to determine the break-even point for the eradication component of the programme. The margin over eradication cost therefore equalled the maximum expenditure potentially available for surveillance without the net benefit from the mitigation programme overall becoming zero. Costs of the four surveillance strategies and the net benefit of the mitigation programme were estimated. Simulations were run for the years 2008-2017 with 20,000 iterations in @Risk for Excel. The mean baseline disease costs were estimated to be 16.04 m CHF (1 Swiss Franc, CHF=0.73 € at the time of analysis) (90% central range, CR: 14.71-17.39 m CHF) in 2008 and 14.89 m CHF (90% CR: 13.72-16.08 m CHF) in 2009. The break-even point was estimated to be reached in 2012 and the margin over eradication cost 63.15m CHF (90% CR: 53.72-72.82 m CHF). The discounted cost for each surveillance strategy was found to be smaller than the margin, so the mitigation programme overall is expected to have a positive net economic benefit irrespective of the strategy adopted. For economic efficiency, the least cost surveillance alternative must be selected.

A qualitative approach to measure the effectiveness of active avian influenza virus surveillance with respect to its cost: a case study from Switzerland.

The aim of the project was to apply cost-effectiveness analysis to the economic appraisal of avian influenza virus (AIV) surveillance, using the implemented surveillance programme in Switzerland as a case study. First a qualitative risk assessment approach was used to assess the expected impact of surveillance on the transmission and spread of AIV. The effectiveness of surveillance was expressed as the difference in defined probabilities between a scenario with surveillance and a scenario without surveillance. The following probabilities were modelled (i) transmission of highly pathogenic AIV (HPAIV) from wild birds to poultry, (ii) mutation from low pathogenic AIV (LPAIV) into HPAIV in poultry, and (iii) transmission of HPAIV to other poultry holdings given a primary outbreak. The cost-effectiveness ratio was defined conventionally as the difference in surveillance costs (ΔC) divided by the change in probability (ΔP), the technical objective, on the presumption that surveillance diminishes the respective probabilities. However, results indicated that surveillance in both wild birds and poultry was not expected to change the probabilities of primary and secondary AIV outbreaks in Switzerland. The overall surveillance costs incurred were estimated at 31,000 €/year, which, to be a rational investment of resources, must still reflect the value policy makers attribute to other benefits from having surveillance (e.g. peace of mind). The advantage of the approach adopted is that it is practical, transparent, and thus able to clarify for policy makers the key variables to be taken into account when evaluating the economic efficiency of resources invested in surveillance, prevention and intervention to exclude AIV.

Economic evaluation of the surveillance and intervention programme for bluetongue virus serotype 8 in Switzerland.

Empirical analyses founded on sound economic principles are essential in advising policy makers on the efficiency of resource use for disease mitigation. Surveillance and intervention are resource-using activities directed at mitigation. Surveillance helps to offset negative disease effects by promoting successful intervention. Intervention is the process of implementing measures (e.g. vaccination or medication) to reduce or remove a hazard in a population. The scale and ratios in which the two are combined affect the efficiency of mitigation, its costs, benefits, and thus net effect on society's well-being. The Swiss national mitigation programme for bluetongue virus serotype 8 was used as case study to investigate the economic efficiency of mitigation. In 2008, Switzerland implemented a vaccination programme to avoid and reduce disease and infection in its ruminant population. To monitor the vaccination programme and the vector dynamics, a surveillance system consisting of serological and entomological surveillance was established. Retrospective analyses for the years 2008-2009 and prospective analyses for the years 2010-2012 were conducted to investigate if the mitigation programme was economically beneficial. In the retrospective analysis, the implemented programme (=comparative scenario) was compared to a hypothesised baseline scenario of voluntary vaccination and surveillance. In the prospective analysis, the comparative scenario assumed to continue was compared to two baseline scenarios: one of voluntary vaccination combined with surveillance and one of no vaccination combined with surveillance. For each scenario, monetary surveillance, intervention and disease costs were calculated. The comparison of baseline and comparative scenarios yielded estimates for the total benefit (=disease costs avoided), margin over intervention cost and the net value of the programme. For 2008-2009, in aggregate, the mean biannual total benefit was 17.46 m Swiss francs (CHF) (1CHF=0.66€ at the time of analysis) and the mean net benefit after subtraction of the intervention and surveillance cost was 3.95 m CHF. For the three years 2010-2012, overall net costs were estimated at 12.93 m and 8.11 m CHF, respectively, for comparison of the implemented mitigation programme with the two baseline scenarios. It was concluded that the surveillance and intervention programme implemented in 2008-2009 was economically beneficial, while its continuation in the same form in 2010-2012 would produce net costs. These costs were due to the mean intervention cost remaining constant at a level of approximately 11 m CHF per year while the mean total benefit would be gradually reduced in 2010-2012 due to the reduced occurrence of disease in a fully vaccinated population.

The effects of low dose parathyroid hormone on lumbar vertebrae in a rat model for chronic alcohol abuse.

UNLABELLED: This study evaluated the hypothesis that increased bone marrow adipogenesis is coupled to decreased bone formation in rats consuming alcohol. Parathyroid hormone (PTH) increased bone formation but had no effect on marrow adiposity. We conclude that increased adiposity does not prevent the bone anabolic response to PTH. INTRODUCTION: Alcoholism results in decreased bone formation and increased bone marrow adiposity. The present study tested the hypothesis that these reciprocal changes are coupled by evaluating the effect of intermittent PTH on bone formation and bone marrow adiposity in a rat model for chronic alcohol abuse. METHODS: Three-month-old male Sprague Dawley rats (n = 10-11/group) were fed the Lieber-DeCarli liquid diet with 35% of the calories derived from ethanol. Control rats were pair-fed an isocaloric alcohol-free diet. The rats were administered low dose PTH (1 µg/kg/day sc, 5 d/week) or vehicle for 6 weeks. Cancellous bone architecture in lumbar vertebrae was evaluated by micro-computed tomography followed by histomorphometric assessment of bone formation and marrow adiposity. RESULTS: Alcohol increased bone marrow adiposity but reduced bone formation. The latter was due to decreases in mineralizing perimeter/bone perimeter, a surrogate measure of osteoblast number, and mineral apposition rate, a measure of osteoblast activity. PTH increased bone formation by increasing mineralizing perimeter/bone perimeter. In contrast, PTH had no effect on mineral apposition rate or bone marrow adiposity. Interactions between alcohol consumption and PTH treatment were not detected for any endpoints evaluated. CONCLUSIONS: PTH treatment blunted the decrease in mineralizing perimeter/bone perimeter in alcohol-fed rats but was ineffective in preventing the increase in bone marrow adiposity. These findings suggest that the alcohol-induced increase in adipocytes is not directly responsible for the accompanying reduction in bone formation.

Alcohol alters whole body composition, inhibits bone formation, and increases bone marrow adiposity in rats.

UNLABELLED: Chronic alcohol abuse is a risk factor for osteoporosis and sarcopenia, but the long-term effects of alcohol on the immature musculoskeletal system are less clear. The present investigation in growing rats was designed to determine the effects of alcohol consumption on body composition, muscle mass, and bone mass, architecture, and turnover. INTRODUCTION: Few studies have focused on the long-term effects of drinking on bone and muscle during skeletal maturation. METHODS: Alcohol was included in the diet of 4-week-old male Sprague-Dawley rats (35% caloric intake) for 3 months. The controls were fed an isocaloric alcohol-free liquid diet ad libitum. A second study was performed in which the controls were pair-fed to the alcohol-fed animals. RESULTS: Compared to ad libitum-fed age-matched controls, alcohol-fed rats weighed less and had lower lean mass, fat mass, and percent body fat. In addition, they had lower slow- and fast-twitch muscle mass, lower total body bone mineral content and bone mineral density, and lower cancellous bone volume in the lumbar vertebra and proximal tibia. The effects of alcohol consumption on body composition were reduced when compared to the pair-fed control diet, indicating that caloric restriction was a comorbidity factor. In contrast, the effects of alcohol to decrease bone formation and serum leptin and IGF-I levels and to increase bone marrow adiposity appeared independent of caloric restriction. CONCLUSIONS: The skeletal abnormalities in growing alcohol-fed rats were due to a combination of effects specific to alcohol consumption and alcohol-induced caloric restriction.

Effect of vaccination against Aujeszky's disease compared with test and slaughter programme: epidemiological and economical evaluations.

In January 1990, a 6-year program was initiated to eliminate endemic Aujeszky's Disease virus (ADV) infection from the pig herds in an area of Northern Germany, bordering Southern Denmark, with intensive pig farming. In the first 3 years of the campaign, an intensive compulsory vaccination program, with glycoprotein I (gI)-deleted vaccines, of all pigs in the area was employed. Beginning in June 1990 and for the first 3 years of the project, approximately 200 herds randomly selected from all herds in the area, were serologically tested each quarter. In each farrow-to-feeder (FAFE), feeder-to-finish (FEFI) and farrow-to-finish (FAFI) herd, 20 female breeding pigs, 20 finishing pigs (> or = 50 kgs liveweight) and 10 female breeding pigs and 10 finishing pigs, respectively, were blood sampled. The sera were tested by the Herd-Check Anti-PRV(S) ELISA test (IDDEX Inc., ME). Sera positive to this test were examined by the HerdCheck Anti-ADV gI-ELISA test (IDDEX Inc., ME). Data on potentially confounding management factors were collected through a pilot-tested questionnaire, administered to farmers by 2 veterinarians who blood sampled the pigs. For fattening herds (FEFI and fattening sections of FAFI herds), the association between the odds of > or = 1 gI+ finishing pigs and the time between initiation of the program in the area and sampling date (a surrogate for the effect of the program) was modelled using ordinary logistic regression. The association between the odds of gI+ females in seropositive (> or = gI+ females) FAFE and FAFI herds and time since initiation of the program was investigated with logistic-binomial regression models. Results of the study show that the longer the period from the beginning of compulsory vaccination to the date the herd was sampled the lower the odds of gI+ fattening herds and gI+ female breeding pigs in herds of the area. The beneficial effect of mass vaccination on the reduction of ADV spread was accounted for by this relationship. For fattening herds this relationship appeared curvilinear, with the reduction in the log-odds being more rapid in the 1st year of the program. This non-linear pattern indicates that for the elimination of the risk of ADV-infection from fattening herds of the area, the mass vaccination program should be complemented with additional measures such as test-and-slaughter of infected breeding pigs. A computerized economical model to estimate the effects of ADV-infection at the herd and area level has been developed. The analytical structure consists of a basic epidemiological model linked to an economic estimation framework. The economic model predictions allow priorities to be given to alternative control strategies. Mass vaccination of all pigs in regions with endemically infected herds followed by test-and-removal of seropositive animals is the most cost-effective way to control the spread of ADV within the swine population. Other possible control strategies such as intensive vaccination or complete test-and-removal all had higher overall costs, either because of the less efficient production, or because of the high costs of straight test-and-removal.