Tom Fagan and Elise Lang - Oct 08 2019
Health Funding is Decreasing: What Can Countries Do?

Credit: Lucien Alexe, Photoshare

Last month at the UN General Assembly, Secretary-General Antonio Guterres pushed to urgently "change the financing paradigm" to "step up the pace of investment" towards health coverage across the globe. Since 2000, donor countries have committed USD 500 billion to improving health systems and outcomes in developing countries. However, this external funding has slowed. While developing countries have gradually committed more domestic resources to health, it has not been in the quantities necessary to ensure the long-term sustainability of critical and lifesaving programs. Mobilising new funding is a long-term and multi-faceted challenge, but countries are not without options to achieve their goal of sustainable financing for health.

From our experience working with the Global Fund to Fight AIDS, Tuberculosis, and Malaria, there are three strategies that countries should prioritise to meet their health financing needs:

1. Harnessing Economic Growth

Many of the poorest countries in the world, long dependent on donor resources for health, have experienced a decade or more of strong, sustained economic growth and rapid growth in public revenues. However, health has remained a relatively low priority for the use of these new resources.

Even as donor resources have dwindled, there is still the perception that the health sector is taken care of by donors. Health sector budgets, inflated by donor resources, may have once dwarfed other sectors, but the myth is now larger than the reality.

Ensuring that health budgets benefit from domestic growth will require a reprioritisation of government financing towards human resources, drugs, and other key health inputs. To achieve this, ministries of health and their partners must effectively make the case to ministries of finance, parliaments, cabinets, and other high-level decisionmakers for greater public investment in health. To do so, they should focus on three things:

  • Sensitise decisionmakers: Lay out the funding context and trend for the health sector, with a focus on the plateauing of donor resources and contrasting it against growing health needs.

  • Link inputs and outputs: Clearly show how and where new domestic resources will be used and what outcomes they will produce.

  • Demonstrate results: Highlight health sector achievements and impacts, especially reductions in morbidity and mortality, that have been achieved with the current resources.

"Even as donor resources have dwindled, there is still the perception that the health sector is taken care of by donors."

2. Improving Efficiency in Resource Use

Not all countries have experienced the same, prosperous economic growth, and even those that have still face severe resources constraints. When there simply isn't enough new money, countries need to think about how they can do more with current resources. Better targeting of programs to populations with the greatest needs, reprioritising to invest in high-impact interventions, and emphasising accountability and transparency all cut down in wasteful, ineffective spending and help limited resources to go further. To do this, ministries of health and their implementing entities need to be asking:

  • Are we budgeting effectively and addressing barriers to spending? Budgets should be realistic and consider what the health sector can effectively spend in a fiscal year. Often financial management procedures can create delays in processing payments and spending the fully allocated budget — these challenges should be addressed head-on.
  • Are we funding the right interventions? Budgets should be prepared based on strategic decisions and cost-effectiveness rather than just needs or requests of each program.

  • Are we targeting them in the right places and to the right people? Programs should focus on populations with the highest burden of disease and/or potential impact — rather than the general population — to maximise results in terms of number of lives saved or infections averted.

  • Are the inputs to provide these services being properly and fully utilized? Significant investments in human resources for health and health infrastructure have been undercut by high absenteeism and stockout rates, highlighting the need to select the right mix of inputs, align incentives, and strengthen accountability mechanisms.

3. Promoting Pre-payment Schemes

With economic growth, many countries have recognised that the increase in financial resources at the household level presents an opportunity to harness this new wealth in a more equitable system that guards against impoverishing out-of-pocket health expenditures by households. Many countries have or are in the processing of rolling out public health insurance schemes that pool household resources to provide for reliable resources for the government health sector and more equitable access to health services. For health insurance schemes to be effective both in mobilising new resources and in ensuring equity health, they should focus on:

  • Increasing enrolment and the contribution base: Developing countries with high rates of informality need to find ways to expand contributory enrolment beyond the formal sector to non-poor informal sector workers.

  • Subsidising premiums for the poor: Schemes should promote cross-subsidisation of premiums for the poor to ensure that they have access to the same benefits and quality of care as wealthier individuals.

  • Expanding benefits packages: Benefits packages must incorporate HIV, family planning, and other priority health services and related commodities that have long been considered donor initiatives in a way that both ensures long-term financing for those services and is financially sustainable for the scheme.

No one of these solutions will be adequate to address a country's health financing needs in the short or medium term. Nor are all of them appropriate in every country. However, by carefully considering these options countries can begin to develop a pathway toward sustainability and make an elusive dream a reality.

Palladium, supported by the Global Fund, has recently produced reports on four countries identifying the opportunities and challenges for each across these pathways: Ethiopia, Liberia, Uganda, and Zambia.

These are accompanied by a series of advocacy briefs outlining priority actions for each country to strengthen domestic resource mobilization efforts: Ethiopia, Liberia, Uganda, and Zambia.