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Summary

Using Life-Years (DALYs) as a unit of account rather than tons of CO2 could be an effective way to fund health care in developing countries.

I am looking for support and advice from the EA Community on:

  • Use Case validation:
    • What are the challenges with funding health care currently?
    • Does this proposal effectively develop rigorous impact?
    • Have you funded a healthcare intervention before? Would you be willing have a phone call to share how you chose who to fund?
  • Connections:
    • Do you know anyone else working on this problem we should talk to?

Rationale for HealthCredit

EA has created a great reputation for funding the highest impact work with rigorous evidence. Because of this, funding is concentrated in established interventions with rigorous impact. This project would make it easier for a wider variety of new health interventions to obtain rigorous evidence of impact and thus qualify for EA funding.

Compared to Givewell, which compares apples and oranges, we make it possible to compare all health impacts based on the DALY standard. Also, while Givewell generally makes the same recommendations each year to fund large, established organizations (which is great) this method could enable smaller and newer organizations to establish rigorous impact and receive funding.

Context

Imagine a maternal health clinic in rural Kenya. They are doing great work and want to expand their impact, but how do they convince funders half the world away?

Healthcare funders like corporations, governments, individuals and foundations want to improve health in developing countries but funders are unsure of the impact they are getting. Health interventions that could save lives go underfunded.

We’re all familiar with this: when we see a company’s annual report say “We are helping maternal health in Africa” we wonder “Are they? How much? And how sure are they?”

Solution

Just as carbon credits represent a ton of carbon or equivalent removed from the atmosphere, we can quantify health using DALYs (disability adjusted life years) as a unit of account.

Each HealthCredit represents a DALY averted. Each verified health care Project Developer gets a unique token of impact with their photo. Each accredited health organization can sell their credits on a marketplace at the market price. 

Here are example organizations with example stats:

Price of LIFE-YEARS depends on the subjective view of the buyer. For example, a LIFE-YEAR from a health center in rural Kenya might be worth more to buyers than a LIFE-YEAR from a hospital in New York. This is similar to how carbon credits work. Carbon credits were intended to be fungible (the price of 1 ton = the price of 1 ton), but in practice buyers are willing to pay a higher price for a ton of carbon from saving the amazon rainforest than a ton of carbon from a cement plant that reduces emissions by 5%.

A market-based solution might be a good way to solve the challenge of subjective value of health improvement while simultaneously referencing a concrete impact. The picture on the credit also maintains the emotional relationship to the project the DALY came from. Each health organization’s credit will come with an image of the project so that people can put it on their digital trophy wall or annual report.

The number of LIFE-YEARs for sale depends on how many DALYs an organization averts, which are subsequently verified.

Verification is done through a similar process as carbon credits where first a methodology is approved and then a project’s impact is approved through an assessor. (See more details in our draft whitepaper here. We encourage you to make comments directly on this draft white paper. Constructive criticism is helpful:-)

Progress to date:

  • We were a winner of the Impact Track of a Hackathon in March 2022.

Broader Appeal

  1. This is for retroactive funding but there could be a way to sell LIFE-YEAR futures that help organizations acquire capital earlier.
  2. While we are starting with Healthcare, one can imagine this working in other sectors in the future.

Team Information

Kyle Schutter founded, ran and sold a biogas company in Kenya. We also sold carbon credits as part of our work. Now he raises capital for startups in Africa at thegrant.co. He is looking for new ways to crowd capital into the space. 

Himanshu Bhatt (India)

Godswill Ezeoke (Nigeria)

Advisors:

Melissa Menke Founder Access Afya Kenya

Andrea Feigl CEO at Health Finance Institute



Thanks for reading. If you are willing to share your experience funding health interventions please DM me on Twitter or Telegram or reply here.

 

This post was inspired by work from Paul Christiano, Impact Markets, Denis Drescher and RowanBDonovan and their posts below:


 

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How are DALYs measured? Normally you'd need an RCT, but doing that for each organization might be too costly.

Each HealthCredit represents a DALY averted.

Do you mean "a DALY saved"?

Great question. Often we say DALY averted, but saved works too and maybe is more intuitive.

Yes, to determine the DALYs saved we would need to have an RCT. This would be to establish the methodology. Once the methodology is established then other organizations can apply to have their credits verified under the same methodology. For example, if we show that bednets prevent malaria and thus save DALYs in an RCT then there is no need to have every organization do an RCT, only that they prove how many people are using bednets and the base rate of malaria in the area.

Does that help?

I see this as a big step towards using value aligned markets to address inefficiencies in charitable giving, and a much needed proof of concept for tokenomics in EA. The proof of concept seems to be alone worth the attention of domain experts in health care funding. I am also curious how this could be extended to applications addressing food insecurity.

Congrats on winning the hackathon! Very Impressive! I'm excited to see how this project progresses, this seems like a great opportunity to improve the traditional funding and non profit sector without taking huge crazy leaps.

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