Over the last decade we have seen impressive improvements in health in almost all countries and many low- and middle-income countries are now planning the way forward to achieve universal access to essential health services. The challenge remains to ensure Universal Health
Coverage for all these vital services, particularly for hard to reach populations, while avoiding catastrophic health expenditures with people having to pay for their health care through out-of-pocket payments. As the discussion on the post-MDG framework is approaching its final phase, the question of how to finance Universal Health Coverage requires further consideration both in terms of its domestic and international components.
Increase in international
assistance for global health
Since the turn of the century there has been an unprecedented increase in international resources for health. A landmark study published in 2009 by Ravishankar et al showed an increase from around US$ 5.8 billion/year in 1990 to more than US$ 21 billion in 2007.1 A more recent study published in April 2014 by Dieleman2 and colleagues estimated that Development Assistance for Health (DAH) reached US$ 31.3 billion in 2013, its highest ever level. DAH is now 5.5 times greater than in 1990, with 74.1 percent of this growth attributable since 2002. This is particularly remarkable as this period of growth has at least partially coincided with the global economic and financial crisis beginning in 2008 with negative consequences for donor budgets. However, Dieleman et al did note that annualized growth of DAH has slowed down to 1.1 percent since 2011 compared to 11.3 percent average annual growth during the first decade of the millennium. Almost simultaneously, the OECD reported on April 8, 20143 that “Development aid rose by 6.1 percent in real terms in 2013 to reach the highest level ever recorded, despite continued pressure on budgets in OECD countries since the global economic crisis. Donors provided a total of US$ 134.8 billion in net official development assistance (ODA), marking a rebound after two years of falling volumes, as a number of governments stepped up their spending on foreign aid.” Looking forward, OECD is predicting a further slight increase of ODA in 2014 but that international resources will remain more or less stable thereafter.
The increase in national and international funding over the last 14 years has been associated with impressive improvements in health. Life expectancy has increased in virtually all countries and particularly the poorest which have significantly closed the gap with the richer world. Child mortality has gone down dramatically.4 Since 1990 global under-five mortality rate has dropped by 41 percent. We also see strong declines in a number of individual diseases. Just over the last decade deaths due to malaria have declined by 45 percent globally and even 49 percent in Africa, the most affected continent5. Global mortality due to tuberculosis has fallen 41 percent since 19906 and new HIV infections declined globally by 33 percent since 20017. The number of women dying during pregnancy and childbirth has decreased from 543,000 in 1990 to 287,000 in 2010 almost half of the rate just two decades ago. These results have been achieved by national programs, communities, health care workers all over the world and by a strong partnership including governments, civil society, bilateral and multilateral organizations, and the private sector. These results would not have been possible without international resources complementing national efforts.
Future funding of global health
There is consensus that the primary responsibility for financing health services rests with governments requiring sufficient domestic revenue generation. Recent impressive economic growth in most low- and middle-income countries provides some optimism that, indeed, governments will be in a position to increase their health funding. However, this will require the political will to ensure that health programs receive sufficient prioritization within budget processes. Significant progress has been made already. UNAIDS reported that domestic spending accounted for 53 percent of all HIV-related spending in low- and middle-income countries in 20128. Kenya has established a Health Trust Fund and Tanzania an AIDS Trust Fund demonstrating not only political leadership but also opportunities for innovative ways of increasing domestic revenue channeled to the health sector.
Member states of the African Union (AU) have adopted the AU Roadmap on Shared Responsibility and Global Solidarity for the AIDS, TB, and Malaria response in Africa. One of the key priority actions under the Roadmap has promised to identify and maximize opportunities to increase domestic resource allocation to AIDS, TB, and malaria and health funding in general. In March 2014, ministers of finance and ministers of planning met in Abuja and adopted a resolution in the context of an African common position on the post-2015 agenda calling on the AU, in collaboration with partners, to carry out projections for financing needs for implementing the post-2015 agenda including domestic financing. In addition, in recognition of the 2015 MDG deadline there was a call to strengthen African institutional and financial mechanisms to support medium- to long-term goals making domestic resource mobilization a priority for African countries.
Development assistance for health
Even if the majority of the funding will come from domestic resources there is still a need to complement those resources from international DAH particularly for the poorest countries, and countries in crisis that will not be able to raise sufficient revenue in the medium term. The Global Fund to Fight AIDS, TB and Malaria is one of the institutions available to channel part of DAH to partners in low- and middle-income countries. It receives about 95 percent of its resources from ODA. Following the launch of its fourth replenishment in December 2013, the Global Fund will be in a position to channel at least US$ 4 billion per year to its partners for the period 2014-2016.
It will be important to continue to make the case to all international funders that health is an excellent investment
producing concrete, measurable results with significant pay-offs for socio-economic development. While it is predicted that ODA will increase further at best at a modest pace, targeted investments in health could increase further as DAH still receives only a modest share of ODA. Health advocates
around the world should continue to explain the benefits of health investments to decision makers and the general public in countries that can afford to support low- and middle-income countries.
The Private Sector has often been mentioned as an important source of additional international funding for
global health. However, the expectation that private corporations would contribute on a scale comparable to donor governments has been overly optimistic and is not likely to materialize in the near future. Of course, in particular the Bill and Melinda Gates Foundation has become a major partner and a number of corporations have provided financial resources. The Global Fund has benefitted from financial support from Chevron, Anglo American, Takeda, Vale, BHP Sustainable Communities and many others. International NGOs and other multilateral organizations have also benefitted from private sector
monetary and in-kind contributions. High Networth Individuals, particularly from countries with high disease burdens, are a huge potential source of complementary funding. The Global Fund recently received a significant donation from the Tahir Foundation and several other business leaders in Indonesia targeted for tuberculosis programs in their home country and matched by the Bill and Melinda Gates Foundation9.
(Product) RED has initiated an innovative approach to private sector engagement by combining the good will of consumers with the marketing expertise of well-known global brands. Its member companies are appealing to consumers by marketing attractive products and channeling parts of the proceeds from the sales of these products to AIDS programs in Africa through the Global Fund. They have become a key partner in the campaign to achieve an AIDS Free generation by 2015 by mobilizing a cumulative amount of about US$ 250 million since its start in 2006. In addition to these impressive initiatives the main private sector contribution in the future will be based on the provision of their particular expertise and innovation. Companies have developed business practices and technologies that can be readily deployed for the successful and efficient implementation of health programs in low- and middle-income countries. The Global Fund is establishing a platform called the Innovation Hub to provide a link between the specific needs of implementers and the solutions global leaders in business can provide. This can be particularly important in the areas of procurement and supply chain management, financial and risk management, as well as information and communication technologies.
Innovative finance has been an important component of international health financing and has often been touted as a major future contributor. Most of the current and planned innovative finance schemes have been based on taxes or levies
such as the airline levy that is the main source of funding for UNITAID. Other ideas under consideration are a Financial
Transaction Tax (FTT) or taxes and levies on products such as alcohol and tobacco. The FTT that has already been approved in principle by 11 European countries has a great potential
but only if the revenue generated by these taxes is indeed dedicated to ODA and DAH. Taxes on tobacco and other harmful substances have additional health benefits by discouraging unhealthy practices thereby reducing the risk for important non-communicable diseases.
Other schemes include the International Finance Facility for Immunization (IFFIm), which monetizes long-term pledges from donor governments in the form of ‘vaccine bonds’ in the capital markets, making large volumes of funds immediately available for GAVI programs; and Debt2Health, through which debtor countries have cancelled to date more than US$ 170 million of their debt, in return for making agreed contributions to their own health programs through the Global Fund. Some new ideas such as Development Impact Bonds (DIBs) for malaria and other health challenges could provide frontloaded resources from the financial markets and tap incremental pools of funding with the main benefit of catalyzing efficiency in the implementation of health programs due to its rigorous focus on impact and results. Altogether innovative finance can provide complementary resources and implementation support but will not be able to replace ODA in the foreseeable future.
The post-2015 era offers unprecedented opportunities for global health building on the achievements following the launch of the MDGs in 2000. Full Universial Health Coverage will require a mix of funding sources. While domestic funding will play the most important role, additional funding through DAH, particularly from ODA, complemented by the private sector and innovative finance will remain critical to achieve the ambitious goals particularly in low-income countries. GHD