The way global health initiatives are funded may determine success as much as the actual funding level, says Amanda Glassman, Director of Global Health Policy and a Senior Fellow at the Center for Global Development, a Washington-based think tank.
Devex spoke with Glassman about smart ways to finance global health.
Our research suggests that to advance global health, the international community should invest in health systems perhaps even more so than in new drugs and other innovations. Would you agree?
We need to invest according to what we’d like to achieve. If what we’d like to achieve is better health, we should invest in ways to deliver better health. And that could mean a number of different things.
For example, one commonly observed phenomenon in most low-income countries is that we’re leaving out the bottom 20 percent of the income distribution, the extreme poor. Evidence shows that if we wanted to reach those people, either on the supply or the demand side, we may want to try conditional cash transfer or targeted cash transfer programs that encourage people facing big economic barriers to accessing care to access that care.
In fact, we’re debating right now whether we should benchmark all kinds of aid and government programs against cash transfers. We know that cash works fairly efficiently to improve welfare, so if you want to spend it on something else, whether it’s on technical assistance or some other kind of intervention, perhaps you should have to show that it’s better than cash.
Similarly, there’s work on using performance-based financing or results-based payments, for instance, to produce certain kinds of interventions that we know enhance health status. We want to encourage health systems to produce those things which will really make a difference for health.
Here in the United States, performance-based pay is being tried, and it’s controversial. Do you expect similar skepticism or outright opposition in developing countries?
I don’t. Part of it has to do with the baseline we’re starting from. If we’re starting with systems that have very low productivity or a very low delivery of certain health-enhancing interventions, and also pay really low salaries, doing additional performance-based payments is usually very non-controversial because you’re changing the incentives providers face. Right now, many providers face an incentive to work in the private sector instead of delivering services they’re supposed to in the public sector. That’s the reality we’re looking at in many low-income countries.
In the United States, it depends on what we’re paying for. Some health services are not easily “pay-for-performanced”: They’re complex, each patient is unique. But if we’re talking about population-level health outcomes — say, diabetes management — we do know what works. So we just have to create incentives for those things that are easy to define, that will clearly improve health and that won’t distort other kinds of things that doctors and nurses and other providers need to deliver care.
What’s the role of the foreign aid community in this space?
In the past, external funders have played the role of funding very specific cost-effective products: vaccines, antiretroviral treatment — that’s where the bulk of our spending goes today. How can we transfer that money and those inputs in a way that it encourages efficiency and effectiveness in the delivery of those products? I think that’s the role the international community has to think about for itself.
What would that look like, for example?
Everyone’s starting to focus on how to get better value for money. At the Center for Global Development, we’ve done some work specifically focused on the Global Fund for AIDS, Tuberculosis and Malaria looking at what kinds of incentives its old grant agreements created and how those could be enhanced in order to improve results.
We suggested results-based funding in the relationship between donor and recipient, whether that’s an NGO or a government agency. That gets the international funder out of the business of checking receipts for gas or bicycle tire replacements and gets them more into discussing [along the lines of]: “I will release certain tranches of money when I see independently measured progress on the coverage of an intervention that I know makes a difference on health.”
That’s what we should be talking about in the relationship between donor and recipient — not checking receipts.
Is there a downside?
It has a lot of advantages for implementing partners. It should give them more flexibility in the use of spending and it should allow them to be innovative: If they see something doesn’t work, they’re not stuck with some old budget; they can change their approach as long as you get progress on the result that matters for health.
So I think it’s a plus. It will change how people think about these issues. It’s being piloted. I don’t think anyone thinks we should massively scale up a new scheme everywhere. Instead, we should test it, see what works and what doesn’t, and go from there.
How long does such a process take?
Most of our industry is tied up in technical assistance funding and, particularly in the case of the United States’ assistance, U.S.-based contracting and cooperating partners — which is fine: We have a certain expertise to provide to the world. But that kind of funding doesn’t lend itself to these things, because what kind of output would you disburse against?
So the big question is: How much are we going to support countries’ own efforts to move toward progress on key coverage measures, or how much are we going to say, “I’ll achieve impact through providing some expertise and then linking that expertise to something somebody does and then that somebody is going to do something else…” That’s a very distant relationship between your input and the outcome that we’d like to see.
These are difficult questions we have to answer. But at least for big programs like the U.S. President’s Emergency Plan for AIDS Relief, the Global Fund and the GAVI Alliance — large funding entities that are funding recurring costs associated with delivering care — I see them moving to this approach.
Can you point to some examples?
Last year, the Global Fund board approved a program in Central America to battle malaria that includes some results-based payments. There’s some appetite to do more in Rwanda and I think their view is that they’d like to test these approaches and see whether they work.
In the case of the GAVI Alliance, I know they’re paying more attention to the quality of the coverage information they have on vaccination coverage, and that’s great because if you have better-quality independent verification, then you can pay without any worry that you’re creating incentives for something else, like overreporting data.
The tobacco tax is seen as an innovative way to finance development. Should global health get a piece of that pie?
The tobacco tax is probably one of the best buys in global health because it’s pretty much a win-win: lower incidents of smoking, later start to smoking and increased revenues for government. I personally wouldn’t advocate for earmarking because I think the main impact of the tax is to reduce tobacco, and that is what we should be focused on as public health professionals. If we also get a little bit of the action at the end of the day in terms of money, great.
I would like to see the global institutions focused on increasing tobacco taxes much more. And I think that’s really the business of the World Bank and the other multilateral development banks and the International Monetary Fund that work on tax and subsidy policy and have really ignored tobacco tax for many years. I would like to see them put tobacco tax at the top of their agenda.
What other new ways of financing global health do you see trending?
There are a number of ideas floating around.
We’ve been talking with a lot of funders about development impact bonds. The idea is to crowd in private sector financing and to create a sort of third-party group composed of those private sector investors that will create incentives for, usually, nongovernmental providers to deliver on some kind of outcome that will save government money later.
How does the universal coverage debate change the discussion around global health financing?
The way universal health coverage is being defined right now has two components: One is a component about coverage, that there’s a certain set of interventions everyone in a population should have — things like vaccination, access to safe delivery, family planning. And then the other aspect is that nobody should be impoverished by having access to health care.
These are very national goals; every country has its own health budget and they’re going to have their own definitions on how far they’re able to get toward these goals. They’re good goals. I don’t think we see big funders reflecting the universal health coverage goal at this time: They’re more focused on those Millennium Development Goals-related targets still. And maybe that’s appropriate because that’s their niche, that’s where they’ve been successful so far and that job isn’t done.
But that’s not to say that they shouldn’t fund these things with an eye toward reaching these other goals.
What have we learned from past global health campaigns like the fight against HIV/AIDS?
We’ve learned that we have to care a lot more about results and accountability, and attaching that more closely to the funding flows. We have a lot of modeled results in health, meaning we buy a lot of something and we model what we expect that amount of product has produced in terms of people’s health at the end of the day. But what we really don’t know is, are those products actually reaching people, are people using them the way they have to use them to get the health gains and therefore, are we reaching the disease goals the way we expect?
We do know that health has improved a lot, but we don’t know whether that’s because of us or not. Maybe that doesn’t matter but it does matter in the sense of, are we going as fast as we can or could we have saved many millions more lives? That’s the big lessons learned.
This story is part of Best Buys in Global Health, a campaign by PSI, PATH and Devex to highlight sound investments in global health. Find out more.