The notable increases in funding from various donors for health over the past several years have made examining the effectiveness of aid all the more important. This study examines the extent to which donor funding for health substitutes for – rather than complements – health financing by recipient governments. It found evidence of a strong substitution effect. In fact, the proportionate decrease in government spending associated with an increase in donor funding is largest in low-income countries. The results suggest that aid needs to be structured in a way that better aligns donors’ and recipient governments’ incentives, using innovative approaches such as performance-based aid financing.
Resource allocation and health financing
Does funding from donors displace government spending for health in developing countries?
Farag M, Nandakumar AK, Wallack SS, Gaumer G and Hodgkin D: Health Affairs 28(4): 1045–1055, 2009
Does investment in the health sector promote or inhibit economic growth?
Reeves A, Basu S, McKee M, Meissner C, Stuckler D: Globalization and Health 2013, 9:43
In this study, the authors evaluate the economic effects of alternative types of government spending by estimating “fiscal multipliers” (the return on investment for each $1 dollar of government spending). While the study is implemented using data from Europe the findings may have wider relevance: they indicate that government spending on health may have short-term effects that make recovery more likely.
Does the equity fund in Madagascar target benefits to the poorest members of society and those most in need?
Honda A, University of Cape Town: November 2012
Targeting to identify the poorest or those most in need of exemptions has proven a major challenge under exemption schemes in terms of protecting the poor from financial risk. In this presentation given at the Second Global Symposium on Health Systems Research in November 2012, the author discusses her research into Madagascar’s Equity Fund, which is intended to exempt the poorest in Madagascar from costs such as user fees at health facilities. She assessed the accuracy of the Fund’s targeting process to determine who receives benefits by examining whether the socio-economic status of equity fund beneficiaries was lower than that of non-beneficiaries, as well as identify factors influencing the targeting outcomes. Results suggested that beneficiaries were reasonably well targeted; however, both leakage and under-coverage occurred. Coverage remains very low, with conflicts of interest between health administrators and village level agents. The local health administration could not monitor or influence village level agents’ behaviour during beneficiary identification. Monitoring, decision-making and managerial mechanisms were re-shaped to allow health administrators to influence the number of indigents registered on the list. In addition, a re-orientation of the policy objectives changed the emphasis of equity fund operations to favour financial performance.
Domestic Revenue Mobilisation in Countries Emerging from Conflict
Holmes K: International Peace Institute, 10 July 2013
On 10 July 2013, the International Peace Institute hosted Kieran Holmes, General Commissioner of the Burundi Revenue Authority, to present lessons and recommendations from countries emerging from conflict, while positing ways the wider international community can support the development of domestic revenue generation and revenue authority. In this video, he argues from the position that imposed decisions and models of the global agencies are often not the in the best interests of recipient countries. A relevant system should be determined by local conditions. International and national partners must radically change the way they engage with states emerging from conflict. African leaders need to find how to move away from the model of partnership according to which priorities, policies, and funding needs are determined in foreign capitals and development partners’ headquarters. Conflict-affected states need to be able to determine their own destinies.
Donor AIDS money weakening health systems
Oomman N, Bernstein M and Rosenzweig S: Centre for Global Development, 8 August 2008
More international aid has been dedicated to fighting HIV and AIDS than any other disease, but what impact have all those donor dollars had in countries where HIV and AIDS funding often exceeds total domestic health budgets? The three largest HIV and AIDS donors - the Global Fund to Fight AIDS, Tuberculosis and Malaria, the US President's Emergency Plan for AIDS Relief (PEPFAR) and the World Bank's Multi-Country AIDS Programme (MAP) - have spent US$20 billion on combating AIDS since 2000. This report, launched at the International AIDS Conference in Mexico City, suggests that AIDS donors may actually have weakened the health systems necessary for an effective AIDS response. Noting that ‘the future of the global HIV/AIDS response cannot be considered independently from that of national health systems,’ the study examined interactions between the three donors and health systems in three countries where they work: Mozambique, Uganda and Zambia. Focusing on three components of those health systems - health information systems, supply chains for essential drugs, and human resources - the researchers found that donors had developed AIDS-specific processes, often creating a drain on resources essential to the country's broader health system.
Dr Lieve Fransen elected Vice Chair of the Board - Global Fund
The Global Fund to Fight Aids, Tuberculosis, and Malaria
A unanimous Board in Geneva met on 23 March 2006 and elected Dr Lieve Fransen Vice Chair of the Board after Prof Michel Kazatchkine, France's Ambassador on HIV/AIDS and Transmissible Diseases announced his resignation in January.
DRC: HIV effort needs government funding to succeed
Plus News: 4 May 2012
Many national hospitals in the Democratic Republic of Congo (DRC) are no longer accepting new HIV-positive patients for antiretroviral treatment (ART), largely due to lack of capacity and funding shortfalls. According to Medicins Sans Frontiers, urban areas are poorly covered by ART (30% for Kinshasa), but rural areas are much more severely underserved. Funding remains uncertain. A major World Bank project recently closed after six years, while UNITAID, which provides funding for paediatric and second-line antiretrovirals, will end its funding to the DRC in December 2012. The cancellation of Round 11 funding by the Global Fund to fight AIDS, Tuberculosis and Malaria is likely to worsen the situation. Réseau National d'Organisations Assises Communautaire (RNOAC), a national network of community-based organisations, has called on government to supply funding for HIV programmes instead of relying exclusively on external funding.
Drop in tuberculosis funding could set back fight against AIDS
Engel M: Los Angeles Times, October 15 2008
About 11 million of 33 million HIV-positive people have tuberculosis (TB) and, if financially troubled nations renege on aid pledges, it would deprive the poor of life-saving treatment. New Nobel laureate and HIV co-discoverer, Francoise Barre-Sinoussi, fears that the global economic crisis could cause nations to renege on commitments to fight tuberculosis and wipe out gains made against AIDS because so many people suffer from both diseases. The world is achieving success with antiretroviral treatment for HIV, but we have an epidemic of multi-resistance to tuberculosis treatment, which is really alarming. An estimated 33 million people worldwide are infected with HIV. About 11 million of them also have tuberculosis. By suppressing the immune system, HIV leaves people susceptible to other infections, especially TB.
Dying to live: Kenya’s search for universal healthcare
Mwangi T: Global Health Check, 14 March 2013
Like many countries in east Africa, Kenya has a complicated patchwork of different health insurance schemes offering different levels of coverage to different population groups. The author of this article argues that merging these into a single national risk pool that uses public financing to provide for all citizens will improve access to healthcare and reduce administrative costs. She puts forward two proposals for financing universal health care: introducing an earmarked tax on diaspora remittances and merging existing funds to create a single National Social Health Insurance Fund that pools all the resources that are currently available for health into one pot to stop the current duplication of financing mechanisms. Although a proposal to start a National Social Health Insurance Fund in Kenya was recently passed by Parliament the president did not sign it.
Dynamic cost-effectiveness: A more efficient reimbursement criterion
Lundin D and Ramsberg J: Forum for Health Economics & Policy 11(2), 2008
Basing drug reimbursement on cost-effectiveness provides too little incentives for research and development. The reason for this is that cost-effectiveness is concerned with immediate value for money. But since the price of a drug usually declines over time, the drug might well provide value for money as seen over its entire life cycle, even though its price during patent protection is too high to warrant reimbursement according to the cost-effectiveness decision rule. This paper shows in a theoretical model that welfare could be improved if decision-makers took a longer perspective and initially allowed higher prices than immediate value for money can motivate. It also discusses the real-world relevance of applying dynamic cost-effectiveness.