Return on investment (ROI) is an economic measure used to indicate how much economic benefit is derived from a program in relation to its costs. Interest in the use of ROI in public health has grown substantially over recent years. Given its potential influence on resource allocation, it is crucial to understand the benefits and the risks of using ROI to defend public health programs. In this paper, the authors explore those benefits and risks. They present two recent examples of ROI use in public health and conclude with a series of proposals to minimise the risks associated with using ROI to defend public health interventions. ROIs are increasingly being calculated to demonstrate the value of investments and ultimately to reinforce funding. Consequently, they argue that careful reflection is needed on how their use influences allocation decisions, especially given their role as an advocacy tool in the political arena. It is therefore crucial to understand the basics of how ROIs are calculated and to know their limitations and risks, rather than blindly accepting black-box numbers.
Resource allocation and health financing
This paper presents the findings of a critical review of studies carried out in low- and middle-income countries (LMICs) focusing on the economic consequences for households of illness and health care use. These include household level impacts of direct costs (medical treatment and related financial costs), indirect costs (productive time losses resulting from illness) and subsequent household responses. It highlights that health care financing strategies that place considerable emphasis on out-of-pocket payments can impoverish households.
This paper argues that weaknesses in health systems have contributed to a failure to improve health outcomes in developing countries, despite increased official development assistance. Changes in the demands on health systems, as well as their scope to respond, mean that the situation is likely to become more problematic in the future. Diverse global initiatives seek to strengthen health systems, but progress will require better coordination between them, use of strategies based on the best available evidence obtained especially from evaluation of large scale programmes, and improved global aid architecture that supports these processes. This paper sets out the case for global leadership to support health systems investments and help ensure the synergies between vertical and horizontal programmes that are essential for effective functioning of health systems. At national level, it is essential to increase capacity to manage and deliver services, situate interventions firmly within national strategies, ensure effective implementation, and co-ordinate external support with local resources. Health systems performance should be monitored, with clear lines of accountability, and reforms should build on evidence of what works in what circumstances.
This study of progress in financial risk protection in Uganda used data from the Uganda National Household Surveys for 2005/06, 2009/10, 2012/13 and 2016/17, measuring financial risk protection in terms of catastrophic health care payments and impoverishment. Although catastrophic health payments at the 10% threshold decreased from 22.4% in 2005/06 to 13.8% in 2012/13, they increased to 14.2% in 2016/17. The percentage of Ugandans pushed below the national poverty line decreased from 5.2% in 2005/06 to 2.7% in 2016/17. The distribution of both catastrophic health payments and impoverishment varied across socio-economic status, location and residence. The authors suggest targeted interventions reduce ‘out-of-pocket’ (OOP) payments among those affected and ensure that public health services are funded adequately, through forms of mandatory prepayment.
According to AFRODAD, tax revenues are, on average, lower in developing countries than in rich countries; the average revenue in African countries was approximately 15% of GDP in 2008. Hence the argument that if developing countries were able to collect sufficient tax revenues, they might be able to increase their independence, the provision of social protection, infrastructure and basic services such as education and health care which are crucial for development. The two reports on Mozambique and Zimbabwe reveal that mobilising domestic resources as a means to financing development has become an important development issue, a shift from the past emphasis on financing development from aid and external borrowing. For a long time mobilising domestic revenue has been neglected, despite being a better long-term option, AFRODAD argues. The reasons for this included the inherent pessimism about raising revenue, a prevalent ‘small-state’ ideology and a preference for foreign aid-led solutions. AFRODAD proposes that progressive taxation should play an important role in shaping the distribution of benefits from higher-income citizens to those most in need in a country. The reports also examine the various complexities surrounding taxation as a development finance mechanism in the two country cases including the current tax framework, the amount and extent of tax evasion and more specifically tax incentives and governance in various sectors of the economy. They conclude with policy and institutional recommendations to the governments of Mozambique and Zimbabwe – and civil society – to refine their tax systems.
Moving towards a predominantly publicly funded health system with a specified role for private voluntary health insurance will take time, according to this article. What is required in the short term is for Treasury to be responsive to submissions to gradually increase the allocations to the health sector from general tax revenue, to enable the Department of Health to implement its plans to strengthen substantially both primary healthcare and hospital services, as outlined in the National Health Insurance (NHI) Green Paper and other recent policy documents. It is likely that it will be necessary to supplement this with additional taxes dedicated to the health sector, such as an income tax surcharge, payroll tax on employers and/or ‘sin taxes’ on tobacco and alcohol, which can be phased in after initial improvements to the public health system have been achieved. The author argues that when universal entitlements to specified services are formalised in legislation, it will be important to specify the complementary role of private voluntary insurance. Through this overall process, the relative distribution of healthcare funding across different financing mechanisms will, it is argued, shift gradually to the pattern seen in countries that have already achieved universal coverage.
Do rural and urban mothers differ in their choice of health providers when their children are ill? How does proximity to different health facilities affect a mother's decision? These questions are important for health planners responding to rising urban poverty and ill health, as sub-Saharan Africa has the highest rates of urbanisation in the developing world.
This paper analyses power dynamics at play in the implementation of maternal health policies in rural Malawi, a country with one of the world’s highest burdens of maternal mortality. The authors analysed Malawi’s recent experience with the temporary reintroduction of user-fees for maternity services as a response to the suspension of external funding, a shift in political leadership and priorities and unstable service contracts between the government and its implementing partner, the Christian Health Association of Malawi. The authors report that different actors are frustrated about user fees and their impact on poor people, especially because in Malawi non-institutional deliveries have become strongly associated with maternal deaths. This especially affects women in rural areas, where access to care is already minimal. In addition, the poorest rural women struggle most to pay user-fees, and would have to travel to the district hospital. User-fees eroded trust between women and health workers. The authors indicate that the fact that local maternity services excluded of the most vulnerable rural women from care rather than address higher level sources reflect the power dynamics involved in this issue.
This study set out to examine how health aid is spent and channelled, including the distribution of resources across countries and between subsectors. It aimed to complement the many qualitative critiques of health aid with a quantitative review and to provide insights on the level of development assistance available to recipient countries to address their health and health development needs. A quantitative analysis of data from the Aggregate Aid Statistics and Creditor Reporting System databases of the Organisation for Economic Co-operation and Development was carried out. The analysis shows that while health official development assistance (ODA) is rising and capturing a larger share of total ODA, there are significant imbalances in the allocation of health aid, which run counter to internationally recognised principles of ‘effective aid’. Countries with comparable levels of poverty and health need receive remarkably different levels of aid. Although political momentum towards aid effectiveness is increasing at global level, some very real aid management challenges remain at country level.
How has the Paris Declaration has been translated into action in Mozambique, Tanzania and Zambia? The authors of this study found that, despite some positive developments, the dialogue between donor and recipient governments is breaking down. External funders are becoming increasingly concerned with governance issues in recipient countries, so the dialogue has become more political in nature. At some point in the past, all three countries have had their general budget support temporarily suspended or permanently stopped due to corruption disputes. The authors argue that the dialogue structure developed so far by external funders has become too complex for the three recipient countries, which have insufficient capacity and lack funds for higher-than-expected transaction costs. In conclusion, the authors recommend that stakeholders must try to deal with the inherent contradictions between aid partners: on the external funders’ side there is increasing concentration on short term quantifiable results, a continuous tendency for micro-management and over-optimistic expectations on the speed of agreed reforms, while on the recipients’ side, a lack of visible improvements in governance has undermined the necessary trust needed for increased alignment and programme-based forms of aid.