Submission to the High Level Taskforce on Innovative International Financing for Health Systems.

Transcription

1 Save the Children UK Policy Department Health & HIV Team Submission to the High Level Taskforce on Innovative International Financing for Health Systems. Financing health in the current economic climate: a life-threatening discussion Save The Children UK aims to improve child survival prospects in the developing world through addressing social determinants of health. Our programme and advocacy work focuses on the understanding that governments and international donors must collectively take responsibility for the health of children in developing countries. We work towards the empowerment of nationally-led health plans (through the strengthening of health systems and the call for general or sectoral budget support wherever possible) and strive for the protection of the most vulnerable (through for example the promotion of universal coverage of a basic package of quality care free at the point of use). Executive Summary. In this global context of economic recession, the Taskforce must urgently raise additional resources to fill the substantial financial gap to reach the health MDGs as well as respect previous commitments both at the international and national levels. Further investigation of international tax systems should be undertaken. Building progressive financed health systems will take time, and donors have a responsibility to support countries attempting to establish progressive health financing systems, through long-term predictable funding and an immediate focus on the removal of user fees. The taskforce policy choices must be evidence-based and context specific. Allocation of resources should be improved through increased general budget support wherever possible, the encouragement of transparency in budget allocation and accountability of political leaders towards their population rather than a general call for good governance, and a strengthening of health systems. Crucially, the increased fiscal space and flexibility afforded by the G20 s reaction to the current global recession must be capitalised on by the Taskforce and maintained in a post-global recession context, and serious reflection on the role of International Financial Institutions and the current macroeconomic paradigm must be urgently undertaken. Aid disbursements should be based on health needs of recipient countries, and aim to address the fragmentation of the global aid architecture for health. The IHP s mandate could be extended to include the design of national health plans for its members, the identification of funding gaps, and the harnessing of international and domestic level funds to support these plans. The Global Fund s mandate could be extended to become the operational arm of the IHP.

2 Introduction. Six years to the Millennium Development Goals timeline of 2015, the world appears to be off-track to achieve the health-related targets. 1 Maternal mortality has stagnated in the last two decades, and child mortality declines are not happening as fast as necessary. As a result every year about half a million women 2 die as a result of pregnancy-related or post-partum complications and over 9 million children under the age of 5 die 3 mostly of easily preventable or treatable causes. Perhaps even more worryingly, progress is very uneven, with the most disadvantaged socioeconomic groups and the poorest geographical areas being left behind. 4 In some countries child mortality is actually increasing. 5 And while historical data point to a global declining trend, these statistics mask an increasing concentration of the global burden of child deaths in Sub-Saharan Africa. 6 While the precise reasons may vary from country to country, there are common trends that recur with remarkable consistency across most dysfunctional health systems: lack of qualified human resources (in particular in rural areas), inefficient and inequitable resource allocation, excessive focus on curative care, unregulated commercialization of health services and management practices, financial and non-financial barriers to access, inadequate quality of services provided and of course lack of financial resources allocated to the health sector. 7 This submission follows on the first reports of the two working groups and outlines what Save The Children UK considers the most pressing issues to be addressed to achieve the health MDGs. 1. Raising additional resources According to Working Group 1, filling the financial gap to achieve the health MDGs would cost a minimum of $7bn (assuming previous commitments were met), and a maximum of $36bn (assuming those commitments were not met). The importance of the health financing gap cannot be underestimated, particularly in the current global economic climate, and addressing it requires a radical change in thinking: a paradigm of sustainability that sees each individual state as responsible for providing most or all of the financial resources for its programmes is irreconcilable with the global political ambition to achieve the Millennium Development Goals, particularly in Sub-Saharan Africa. If the MDGs are to be met, the world needs to take action collectively, and financial sustainability must be interpreted in global rather than country-specific terms, and therefore as a responsibility shared among countries and the international community. 8 Previous commitments to increase resources for health have not been respected, whether by international donors (such as the Gleneagles commitments to increase development aid by $50bn a year) or national governments (such as respecting the 2001 Abuja declaration for African countries to allocate 15% of their national budgets to health). The first innovative financing policy which we strongly call for is for taskforce members to respect their previous commitments. Domestic resources There is consensus on the need to establish progressive systems of raising financial resources, i.e. tax financed systems and/ or social health insurance schemes implemented at the national level. At the moment however, the majority of health funds in developing countries comes from out-of-pocket expenditures, an extremely regressive form of funding health. While the working group recognises the regressive nature of out-of-pocket payments and calls for a focus on pooling mechanisms, it fails to recognise that the immediate removal of user 2

3 fees would not only support equity and efficiency concerns, but would also provide an immediate boost to the achievement of health related MDGs. Generally, the Working Group s recommendations on avenues to explore for innovative financing do not sufficiently focus on equity concerns. Whilst recommending insurance schemes, we propose that the taskforce acknowledges the differing impact of various insurance schemes. Community based health insurance (CBHI) schemes for example, often presented as pathways towards national health insurance plans, have not demonstrated sustainability potential, much improved protection of the most vulnerable or great pooling ability of risks and resources. Despite the limited evidence of positive impact of CBHIs, these schemes are being encouraged in many developing countries. The Working Groups also do not sufficiently focus on the potential to mobilise resources through domestic taxes or improved domestic savings. Whilst the difficulties in raising funds through taxation in low-income countries are well recognised, literature suggests that there might be steps to build up national tax bases such as gradual rather than sudden trade liberalization - acknowledging that the current tax base in many low income countries is largely trade dependent-, the introduction of an income tax of high income expatriates for example or the implementation of incentive schemes to attract the informal sector into the formal market 9. Further analysis by the Taskforce is necessary to debunk the a-priori that taxes or savings cannot be increased in developing countries. We call on the Taskforce to focus on building health financing mechanisms at the domestic level that have proven to be progressive, and to refrain from piloting programmes whose regressive nature or limited pooling or revenue raising capacity constrain both equity and long term sustainability. Donors decision to support particular funding schemes should be evidence-based rather than ideologically driven. Recognising that progressive mechanisms will take time to implement, the Taskforce should take a long term view to financing health systems and support developing countries in their construction of such systems through immediate and predictable ODA. While the WG s statement that the responsibility for financing health systems ultimately rests with national governments is valid, it needs to be qualified by the recognition that many developing countries will need extensive immediate and long-term support to be in a position to fulfil this responsibility. International resources Working Group 2 has outlined a number of potential innovative forms of raising additional revenue. The use of a hypothecated tax such as the Currency Transaction Tax (CTT) does offer an interesting avenue to raise substantial and long-term additional funds. Our concern however is that this tax has been offered as a solution to many development priorities (from climate change to education). The taskforce must clarify the use of the CTT or any other global Tobin-type tax as a tax allocated towards filling the health MDGs s funding gap. Furthermore, additional analysis should be undertaken to identify and earmark additional taxes on goods or services whose object relates to health, such as alcohol, tobacco products, fuel (or generally polluting products), pesticides, and so on. This could imply two combined options: a) an agreed percentage of each of these existing taxes to be allocated to health; and b) an increase of, say 5% in each of the above taxes to be earmarked for health expenditures. Crucially, whatever the route chosen by the taskforce to innovatively fund health, the resources generated must be additional to existing commitments. 3

4 2. Allocation and channelling of resources As recognised by the working groups, raising additional resources is not sufficient. Delivery of healthcare and channelling of resources must improve to positively impact health outcomes. We would however recommend that the taskforce nuances its response. - need for context specific rather than blue-print approach Formulating recommendations on the most appropriate modalities to deliver international health financing requires a comprehensive approach, spanning from a household-level analysis and the factors that lead individual patients to seek care, to decision processes relating to the development of national budgets for health systems, allocation of resources to the sub-national level, and accountability within the health system. The taskforce must therefore recognise the need for a context specific approach. - need for evidence-based approach WG1 recommends that Result Based Financing (RBF) should be the basis for all financing of national health plans. It also specifically singles out the potential of conditional transfers of money or material goods linked to performance-based measurements. On the latter the WG also recognises that the evidence to support such an approach is insufficient. On the former, there is extensive literature warning against the perverse effects of performance based financing, such as a focus on quantity rather than quality and a disregard of equity concerns 10. We therefore urge the taskforce to implement evidence-based policies and to put equity and quality of care at the heart of its approach. - need for budget support International donors agendas in health have changed significantly since the 1980s: recommendations have swayed from a need to focus on universal coverage of a basic package of care delivered by the state to a commercialisation and privatisation of health. The economic and social costs associated with the implementation of new and often conflicting policies have undermined health systems strengthening. Furthermore, and as stated in the Paris Declaration for Aid Effectiveness, the fragmentation of the aid has undermined health systems strengthening and the ability of governments to implement their national health plans. We therefore strongly believe in the need to channel resources through the national budget both to improve aid effectiveness and to strengthen national health plans. We do however recognise the difficulty in the budget support approach in certain contexts such as failed or particularly fragile states. However, recognising this caveat, we call on the taskforce to support nationally-developed health plans and own the working group s recommendation for general, or at least sectoral, national budget support. The working groups, and the taskforce, also need to clarify their position on the following statement: good governance is a fundamental prerequisite for all parts of the health system to work well. Whilst we recognise the benefits of transparency in budget allocation of resources and the intrinsic value in accountability of political leaders towards their population, overall: (a) the good governance agenda suffers from lack of clarity (means different things to different donors), (b) there is a wide range of governance indicators that measure too many different things at the same time (and sometimes do not measure what they intend to measure) 11 ; and (c) the causal relationship between good governance in general and long-term development (and economic growth) is so far a contested issue 12. We would therefore encourage the taskforce to nuance its emphasis on good governance in health, and simplify the statement by calling for transparency in budget allocation and increased accountability of governments towards their population. 4

5 - need to strengthen health systems In the last few years, rather than addressing the deep-seated health system constraints that affect most health systems, development assistance for health has been concentrated on disease-specific initiatives, leading to a stagnation or relative decline of resources for maternal, newborn and child health and wider health system strengthening. 13 For example, maternal, newborn and child health appears to have fallen through the cracks of a global architecture of health agencies and development assistance for health. In 2006, the last year for which comparable figures are available, total development assistance for health and HIV was US $16.7 billion. 14 Out of this HIV and AIDS received US $ 4.09 billion from international sources, while development assistance for maternal, newborn and child health amounted to US $ 3.48 billion, 15 even though maternal and child conditions are responsible for a larger number of deaths. 16 HIV/ AIDS MNCH Funds available (US$ billion) Yearly deaths (millions) HIV/ AIDS MNCH Figure 1 international development assistance and number of deaths: comparison between HIV/AIDS and maternal, newborn and child health (MNCH) in ,18,19 We therefore commend the recommendation by the working group of the need to focus on health-systems support over and above a disease specific approach but would strongly recommend that resources be allocated based on the health needs of the country. - need to recognise and address structural constraints Fiscal constraints to the scaling up of the human resources pool in developing countries was not properly addressed by WG1, neither were the structural limitations to developing countries choices in their own economic and social affairs recognised. The G20 announcement of resources allocated to the IMF to encourage fiscal stimulus in developing countries warrants a reaction from the Taskforce and deeper analysis of the following questions: is the IMF the best conduit for increased resources towards development and hence the health sector; how will the taskforce members work towards the widening of developing countries fiscal space; how will the taskforce address the macroeconomic constraints preventing developing countries from scaling up their health interventions and the strengthening of their health systems (such as absorption concerns)? 5

6 - a global fund for health The fragmentation of the current global health architecture across a multitude of specialised agencies and disease-specific initiatives results in inefficient allocation of external resources, distortion of national priorities to fit with donor driven agendas, and a bias towards certain diseases. The International Health Partnership and Related Initiatives (IHP+) remains as yet a relatively loose structure, and the extent to which its signatories adhere to the formal commitments undertaken is variable, given that resource allocation is not explicitly tied to an IHP+-managed structure. So while the IHP+ has recently received most of the attention, it is the global (disease-specific) health initiatives that continue to receive most of the money. We propose a simplified global health structure with the IHP playing a pivotal role in centralising support for national health plans, identifying funding gaps and harnessing international and domestic level funds to support these plans. The loose coordination approach to channelling resources envisaged under the IHP+ structure however would benefit from a more structured and binding approach to pooling and channelling resources. We therefore call for the creation of a funding mechanism that instead of having a narrow focus on individual diseases or beneficiary group is tasked with strengthening comprehensively health systems. This is in our view the only feasible and sustainable strategy to ensure that development assistance for health supports countries to move towards a more credible trajectory to achieve the health-related Millennium Development Goals. The taskforce should make use of existing initiatives (such as the Global Fund for AIDS, Tuberculosis and Malaria or the GAVI Alliance) and structures rather than create new adhoc ones, if only to minimise transaction costs and start-up time. The Global Fund for AIDS, Tuberculosis and Malaria in particular has developed over the years an administrative apparatus and processes and operates at a scale that make it a natural candidate for assuming the role of operational arm of the IHP. Despite its current mandate being clearly focused on three diseases, it possesses several of the desirable features of a hypothetic Global Health Fund (summarised in table 1), such as its focus on results and accountability, and its openness to civil society, hence represents a legitimate democratic structure. Therefore there appears to be a clear case for broadening the remit of the Global Fund to encompass health systems, and become the operational arm of the IHP+. Despite the obvious costs (in terms of both money and time) necessary to change the Global Fund mandate and structure, we believe this would be a strategy that could actually make other global health initiatives redundant in the long run, by allowing the mainstreaming of disease-specific initiatives and resources in revamped general health services. What a hypothetical Global Health Fund might look like. 1. A clear mandate to strengthen general health services in low- and middle-income countries 2. A performance evaluation framework that is not linked to any individual disease or beneficiary group, but that looks at the functionality of a health system as a whole (including coverage with services relating to maternal, newborn and child health, HIV, malaria and tuberculosis, other infectious and non-communicable chronic diseases, quality of care, fairness of financial contribution to the health system); 17 6

7 3. A new paradigm of financial sustainability, determined by what the world can afford rather than what an individual country can afford, 103 and a rights-based approach to health; 4. The ability to attract, pool, and disburse a large and progressively increasing share of global development assistance for health; 5. The capacity to disburse resources beyond the public system when this represents an appropriate strategy to strengthen the health system; 6. Flexibility to provide support to the public sector on- or off-budget, in the form of grants and not loans, and be unconstrained by financial ceilings and macroeconomic stability criteria; 7. Funding criteria that allow addressing key bottlenecks in health systems (including support for recurrent costs), providing longterm predictable support, and rewarding good performance with additional resources and flexibility. A Global Health Fund would lead to both a simplification of the global health architecture and improved health and HIV outcomes in low- and middle-income countries, by ensuring that no country with a credible integrated plan to address its unmet health needs fails to do so for lack of resources. 18 Conclusions Maternal, newborn and child health outcomes can be considered a proxy of the development status of a country: regardless of income levels and other parameters, if a country cannot keep its young women and children alive it probably has a long way to go on the path to development. Weak health systems are one of the reasons maternal and child mortality remain unacceptably high in too many low- and middle-income countries. Health systems can be made more effective and responsive, but only if both external and domestic resource allocation improve in both efficiency and equity. The current global health architecture is not well aligned to address the most important priorities, and is need of radical surgery rather than incremental changes. 7

8 References. 1 World Health Organisation (2008). World Health Statistics WHO; Geneva. Available at: Accessed: Nov 24th Hill K, Thomas K, AbouZahr C, Walker N, Say L, Inoue M, Suzuki E (2007), Maternal Mortality Working Group. Estimates of maternal mortality worldwide between 1990 and 2005: an assessment of available data. Lancet. Oct 13;370(9595): Loaiza E, Wardlaw T, Salama P. (2008), Child mortality 30 years after the Alma- Ata Declaration. Lancet Sep 13;372(9642): World Health Organisation (2008) Commission on Social Determinants of Health. Closing the gap in a generation WHO Geneva (2008). Available at: Accessed: Nov 25th Countdown to Tracking progress in maternal, newborn and child survival The 2008 report. Available at: Accessed: Nov 25 th World Health Organisation (2003), The World Health Report 2003 shaping the future. Chapter 1. Geneva (2003). Available at: Accessed: Nov 25th World Health Organisation (2008), World Health Report Primary Health Care: Now more than ever. Geneva Available at: Accessed: Feb 20th Ooms G (2008)The right to health and the sustainability of healthcare: Why a new global health aid paradigm is needed. Ghent University. Available at: Accessed: Nov 26th Di John J (2006), The political economy of taxation and tax reform in developing countries, Research Paper No 2006/74, UNU-WIDER, United Nations University 10 Eldridge C and Palmer N (2009) Performance-based payment: some reflections on the discourse, evidence and unanswered questions, Health Policy and Planning, 2009, February 7 11 Meisel N and Ould Audia J (2008), Is Good Governance a good development strategy?, Working Paper January 2008, Agence Francaise de Developpement 12 Khan H M (2007), Governance, economic growth and development since the 1960s, DESA Working Paper No. 54, United Nations, Department of Economic and Social Affairs 13 Shiffman J. (2008), Has donor prioritization of HIV/AIDS displaced aid for other health issues? Health Policy Planning Mar;23(2): World Bank (2008). Global Monitoring Report Page 109. Washington DC. Available at: GLOMONREP2008/0,,menuPK: ~pagePK: ~piPK: ~the SitePK: ,00.html Accessed: Nov 25 th Greco G, Powell-Jackson T, Borghi J, Mills A. (2008) Countdown to 2015: assessment of donor assistance to maternal, newborn, and child health between 2003 and Lancet Apr 12;371(9620): Hill et al (2007) and Loaiza et al (2008) 17 World Health Organisation (2008), Toolkit for monitoring health system strengthening Draft. Geneva Available at: Accessed: Nov 26th Save the Children UK (2008), Saving Children s lives Why equity matters. London, Available at: Accessed: Nov 26th