Development assistance for health was $37.6 billion in 2016. The latest figure, released by the Institute of Health Metrics and Evaluation, is consistent with observed growths averaging around 2 percent per year on global health aid spending since 2010.
Political changes across the globe marked by policy shifts, as seen in the United States, however, is putting a huge question mark on the future of global health aid financing. While in the previous year the U.S. was the biggest single source of development aid finance for health at $12.8 billion — 34 percent of the global total — its future position is less clear. Specifics on U.S. commitments to global health were lacking in U.S. President Donald Trump’s “skinny budget” released in March. The latest budget document released this week, meanwhile, shows proposed cuts to USAID’s global health funds. Cuts are also proposed across U.S. aid geographic regions, with the steepest ones in Europe and Eurasia (57.4 percent) as well as in East Asia and the Pacific (41.1 percent).
In the United Kingdom, concerns over Prime Minister Theresa May potentially reneging on the country’s commitment to spend 0.7 percent of its GNI on foreign aid could have a spillover effect in the already tense environment in the global health aid landscape.
Yet in the midst of uncertainties are opportunities for the global health community to rethink strategies, and explore how to more effectively use development assistance for health.
At a Kaiser Family Foundation and Center for Strategic and International Studies-hosted event on the future of global health financing on Thursday, April 20, Devex picked up several insights from Tim Evans, senior director of health, nutrition and population at the World Bank Group.
1. Catalyze domestic resource mobilization.
Countries’ domestic spending will be central in achieving universal health coverage as part of the Sustainable Development Goals.
In 2014, the latest available data from the IHME showed governments already cover the bulk of health spending at 59.2 percent of the global total, followed by private prepayments (17.4 percent), out-of-pocket spending (22.8 percent) and development assistance for health (0.6 percent).
To be sure, this varies according to countries’ capacities. For low-income countries, aid and out-of-pocket payments still, and will likely continue to, occupy a larger share of health spending. That, however, leaves them with little opportunity to pool money and allocate for best-buy interventions, or those that are most cost-effective in improving the health of their population, according to Evans.
Evans said the global health community needs to rethink the way it views and packages development assistance, from largely being linked to service provision to one that can strengthen countries' domestic resource mobilization. He shared a few examples of how aid can drive domestic resource mobilization through the use of technology and innovative financing mechanisms.
During the Ebola epidemic in Sierra Leone, for example, the World Bank helped institute an e-payment system that helped cut the unexplained numbers of emergency health workers showing up in the government payroll. That saved government money that was going to “ghost workers.”
He also discussed loan buy-down, a financing mechanism in which a third party donor such as the Global Fund for example buys down a country’s principal or interest-rate loan from a lender such as the World Bank, to reduce that country’s financial burden, and in turn encourage investments in other programs, such as health.
“The benefit for the Global Fund is that instead of making a grant of $100 million to a middle income country, which is tough for their development partners to justify, they can make a grant of $15 million and leverage $100 million of loan the bank has put out,” Evans said. “And that loan is actually on the government books. And so it’s a form of domestic resource mobilization.”
2. Build a demand for health.
At a time when the global health sector is under threat from cuts and policy shifts, organizations need to be more vigilant, and pour efforts in ensuring and maintaining strong support for its work.
Despite Gavi, the Vaccine Alliance’s successes in meeting and exceeding its replenishment ask of $7.5 billion in 2015, and what appears to be continued commitment from the US in Trump’s skinny budget proposal, Evans said “the biggest mistake Gavi could make is to take its constituency for immunization for granted.”
There’s a “very strong need to think about building demand and not to pretend that because you’re doing health and saving lives that everybody thinks that’s a great idea,” he said. “Actively cultivate that community, because you know if you don’t, then it doesn’t take much of a counter force — and we’ve seen this in the areas of vaccines and immunizations — to erode that base of support.”
3. Break out of a “public sector-only mindset.”
Current public health spending won’t be sufficient to address the growing burden of disease, particularly in low income countries, where IHME data project out of pocket payments will increase in future health spending, given projected little growth in government spending.
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But there are opportunities out there coming from the private sector that could bridge the gaps. One example Evans gave is in the training of health professionals. Over the past 10 years, he said, growth in tertiary education opportunities for doctors, nurses and midwives in most countries were in the private sector. So the question is not whether to involve private sector investment, but how.
“How do you embrace [the private sector] and make sure it’s part and parcel of the bigger health systems and seen as a collective asset rather than as something ripping off students, producing poor quality workers?” Evans said.
“The public sector has massively important functions. But we have to look in a granular way, various ways, in which the private sector is active, will be active, and work with that in ways that are going to address burden of disease in cost effective manners,” he added.
For more Devex coverage on global health, visit Focus On: Global Health