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New study of NIH funding allocations suggests potential efficiency gains
Date:5/3/2012

tion that represents the optimal trade-off between the YLL-denominated risk and reward of various funding allocations or "portfolios". Portfolios on the efficient frontier correspond to funding allocations that maximize the expected return on investment (ROI) (defined as subsequent expected improvements in YLL) for a given level of risk (defined as volatility of subsequent improvements in YLL).

The study's empirical results suggest that optimized funding allocations may yield more desirable public-health outcomes in terms of higher expected improvements and reduced risk in YLL. In their framework, the current NIH funding allocation does perform better than simple benchmark portfolios such as the equal-weighted allocation. However, the estimated efficient frontier suggests that a 28% to 89% greater decrease in average YLL-per-unit-risk may be achievable by other portfolios on the efficient frontier. "Our research shows that there appear to be significant differences between disease areas in research productivity, risk, and spillover into other areas of research. Portfolio theory may allow us to identify different funding allocations that can lead to greater progress in reducing burden of disease, even without any increase in research funding," said Bisias. However, their results also suggest significant benefitsas measured by YLL improvementsfrom increasing NIH funding. "If policymakers truly understood the implications of our empirical results, they would be pushing for greater appropriations for the NIH expeditiously," added Lo.

The researchers acknowledge that YLL is an imperfect measure of public health, and data limitations do not allow them to rule out other factors that may contribute to YLL improvements including research from other funding sources, public health policy, and changes in behavior. They point out other limitations including the impact of statistical estimation error, the lack of clearly articulated policy objectives wi
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Contact: Lori J. Shanks
ljshanks@partners.org
617-534-1604
Brigham and Women's Hospital
Source:Eurekalert

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