The session brought together officials from Kenya, Zambia, Indonesia, Eswatini, Rwanda and Malawi representing ministries of health, national health insurers, a Prime Minister’s cabinet and academia to share practical experiences from health financing reforms, with a focus on priority-setting and strategic purchasing.

Dr Velphi Okello: “Weak links between budgets and supply chains often a challenge”

Dr Velphi Okello, Deputy Director of Clinical Health Services at the Eswatini Ministry of Health, shared her knowledge of the design of an essential Health Benefits Package and emphasised the importance of assessing the healthcare provision landscape. Dr Okello stated assessments carried out in 10 rural clinics in Eswatini revealed they were ready to scale up the National Essential Health Care Package (EHCP). However, through assessments at clinics and hospitals, bottlenecks in the supply chain were identified and efforts were made to ensure delivery of EHCP through improvements in the supply chain through budget processes. Political attention was also found to be focusing more on tertiary care than primary care; and there was room for improvement in cross-ministerial relationships. Dr Okello raised the need to mobilise resources to make these health landscapes ready and the need to maximise efficiency opportunities as much as possible.

Dr Solange Hakiba: “Rwanda is continuing to work on educating and engaging patients and the public more to emphasise primary care is just as crucial as tertiary care”

Dr Solange Hakiba, Deputy Director General in charge of Benefits at the Rwanda Social Security Board, highlighted the importance for low and middle-income countries (LMICs) to scope out opportunities to engage the private sector. Dr Hakiba detailed how Rwanda brought the private sector on board to help build infrastructure in partnership with nurses and the District Government, who provided buildings and furniture. Dr Hakiba explained how Rwanda experienced a lack of health workforce following genocide in 1994; as the country recovered its education system this meant more university graduates were coming through, however Rwanda still required non-university educated nurses and community health workers, thus set up ‘Health Posts’ which operate as entry-level clinics in the public sector and provide care for common conditions such as malaria and diarrhoea. Each post is run by an experienced nurse given access to financing and training in business, post-operations and clinical skills. The franchise approach allows the nurse operator to earn a living operating a small business while increasing access to essential medicines and basic healthcare for communities. After a short grace period, the Health Posts begin operating on a self-sustaining basis and can accept reimbursements through Rwanda’s community-based health insurance scheme, the Mutuelle de Sante, which covers approximately 90% of the population. Rwanda is continuing to work on educating and engaging patients and the public more to emphasise that effective and efficient primary care is just as crucial as tertiary care.

Dr Gerald Manthalu: “Multiple sources of funding for health are often not used efficiently as many have different priorities and plans – pooling of funds where possible can help with challenges of fragmentation of financing”

Issues surrounding the fragmentation of financing was raised by Dr Gerald Manthalu, Deputy Director of Planning at Malawi’s Ministry of Health. Dr Manthalu explained how Malawi had over 190 different sources of funding for health, however their use was not always efficient as many had different priorities and plans in place. Dr Manthalu specified Malawi was tackling this specific challenge by aiming to carry out more detailed resource mapping; and encouraging the pooling of funds where possible, especially from donors. Dr Manthalu mentioned the importance of potential revisions of Essential Medicines Lists and also the need to make citizens more aware and encouraging nationwide discussions. The last revision of Malawi’s Essential Medicines List included the addition of antenatal corticosteroids, chlorhexidine, injectable contraceptives and contraceptive implants – increasing commodity access for women and newborns who need lifesaving interventions.

Remaining on the topic of Essential Medicines Lists, Pak Budi Hidayat, Professor of Health Economics and Health Insurance at the University of Indonesia and a member of the national Health Technology Assessment (HTA) Committee, announced at the satellite session the decision by Indonesian authorities to delist certain medicines deemed to be cost-ineffective from the national formulary. Professor Hidayat stated that Badan Penyelenggara Jaminan Sosial, the social insurance agency responsible for administering the Jaminan Kesehatan Nasional (JKN), the world’s largest single national health insurance scheme for Universal Health Coverage, will no longer reimburse cetuximab and bevacizumab for certain colorectal cancers. iDSI core partner HITAP was instrumental in the economic evaluation of the two medicines which led to the policy decision. The costs of these drugs are strikingly high with only marginal benefits for patients, so much so that they are considered poor value for money and not advised as first-line treatment options even in high-income countries.

Dr Henry Kansembe: “G2G funding can result in one strategic plan and a country’s strategic purchasing formula can be applied to a larger amount”

Chief Planner at Zambia’s Ministry of Health (MoH) Dr Henry Kansembe gave examples of how strategic thinking can improve health indicators in a space where fiscal expansion is limited. Dr Kansembe explained how Zambia’s MoH were aware they would unlikely get increased funding from their country’s treasury, so created incentives for providers to perform better. Results-based financing was on five key performance indicators and led to 30% of the allocation being invested more strategically. Zambia has also explored ‘G2G’ funding, where government funds are pooled with donor funds – meaning one strategic plan can be put together and a country’s strategic purchasing formula can be applied to a larger amount of funding.

Practicalities surrounding health financing towards UHC discussed ranged from data constraints to political challenges, such as how to engage civil society. Professor Tony Culyer highlighted the importance of the education of and understanding from all stakeholders, including the public; and used examples of where blood pressure control methods had received public ‘buy in’ after they were successfully communicated, by both health ministries/departments and the media.

Professor Kalipso Chalkidou emphasised the need for LMICs to have more access to data on costs/prices of essential medicines, as high mark-ups are often charged on medicines in LMICs. This could be due to historical practices, or a result of public services buying medicines in the private sector. Professor Chalkidou used the Congo as an example, where the cost of essential medicines is four times higher than the international average; and stressed that the impact is often on individuals, given the high percentage of out-of-pocket payments in LMICs.

The need for integration and transparency with regards to priority-setting; and ensuring policy-makers are on the same page as academics was also high on the agenda during the session.  All agreed academics are habitually signed up to the process of priority-setting for decision making. Decision making however doesn’t always follow through with the priority-setting process. Being transparent when engaging with stakeholders and citing what options were and who was consulted was highlighted as the only way to defend difficult decisions. The value of having a legal and governance framework to link priority-setting and decision making was a theme that was frequently raised throughout the session.

On the topic of Health Technology Assessment (HTA) infrastructure, the UK and Sweden were hailed as success stories, as a drug is not approved for reimbursement before the HTA process (including health economic analyses) has occurred. In contrast, the HTA process happens far too infrequently in LMICs. All concurred it could be challenging to replicate the same structure the UK and Sweden has elsewhere, however a strategy to collaborate internationally – such as via universities’ economics departments – could be a promising way forward to foster HTA within LMICs.

The satellite session received funding from the Swedish International Development Cooperation Agency (Sida), working on behalf of the Swedish Parliament and Government; and was co-hosted by the Clinton Health Access Initiative, Sida and iDSI. We have made all presentations from the session available for download.

 Ahead of the event iDSI caught up with Patric Landin, regional advisor for Sida’s Sexual and Reproductive Health and Rights team; and Dr Yogan Pillay, Deputy Director-General for Communicable and Non-communicable Disease, Prevention, Treatment and Rehabilitation in the National Department of Health in South Africa.

 Read our 60 seconds interview with Patric Landin here.

Read our 60 seconds interview with Yogan Pillay here.

According to the WHO report, public expenditure in health decreases as a percentage of total public expenditure in the presence of donor aid, and does not increase in line with fiscal growth. But what does this mean in relation to improving population health and economic productivity? This answer to this question is not easily extracted from the report. In fact, the single methods page gives little detail as to data provenance and how it was analysed – necessary requisites of any academic paper submitted for peer-reviewed publication. The document also reports patterns of spending as proportional to total investment, which in the absence of absolute figures can be misleading, though the authors do recognise this as a caveat within the report. The underlying assumption here seems to be the myopic belief that the healthcare sector should be taking up an ever-greater share of public expenditure in all circumstances. But what does analysing and tracking percentage of public expenditure on health really tell us about whether monies are allocated appropriately and systems are operating efficiently?

The WHO report focuses heavily on the question of fungibility and whether development assistance crowds out domestic funding for the healthcare sector. However, an argument can be made that investing in areas such as infrastructure, sanitation, or education may be an even better use of scarce country resources than healthcare, since it has a direct impact on alleviation from poverty and an indirect positive impact on health. There is perhaps some value in a country trying to ensure access to safe drinking water and adequate sanitation before investing in the rotavirus vaccine for all its children. Indeed, a recent study examining the fungibility of development assistance in Tanzania found that fungibility of external funds was in fact beneficial to the country’s development, with evidence suggesting that the ‘displaced’ funds were reallocated towards education. It is obvious that the opportunity cost of spending finite, scare resources in LMIC unwisely has implications beyond health, so fiscal elasticity in this context is not necessarily detrimental, but potentially beneficial.

In recent years, a number of econometric studies have been carried out to address the question of the fungibility of development assistance. However, results of these analyses have been shown to be highly sensitive to the methods used, and are usually based on weak and divergent data sources.

The real problem with the question of fungibility and how to capture and analyse it, is that we’re asking the wrong questions. What we should be asking is not where the money is going, but instead ‘are those monies allocated appropriately and spent efficiently to maximise value?’, where allocative efficiency is dependent on the presence of effective priority setting and governance. Answering this question involves looking beyond the expenditure databases at priority setting mechanisms within particular countries and what financing and governance models can be made to work best for donors and, more importantly, for countries, in their quest to improve health and wellbeing for their populations. Indeed, the emergence of pay for performance incentive schemes and Development Impact Bonds is evidence of a growing trend towards results-based health financing (for more information, see Centre for Global Development’s extensive literature on the potential and pitfalls of these kinds of financing models).

Aside from the substantial technical, statistical, and data quality issues of fungibility-focused econometric studies, it is very difficult to extract the answer to the ‘So what?’ question of how to make things better. One way to address this question experimentally is to design a well-structured, responsive, and flexible co-financing system which facilitates a shift of focus on fungibility to productivity gains. Such a system was recently put forward by Morton and Colleagues, which is founded in the assumption that a list of ‘best buys’ can be relatively easily generated for countries. These high-benefit and low cost interventions could be paid for by the country and more costly interventions higher up the list could be paid for by donors, either in full or as part of a cross-subsidy agreement. The question is then targeted at the point at which an intervention becomes cost effective, within the confines of the domestic budget, and whether donors should subsidise up to this point at the assumption (or agreement) that local policymakers will pay for interventions at the point at which they become cost effective for them. This kind of alignment of donor and local priorities has also proved successful in the form of sector wide approach to payments (SWAp), where recent analyses suggest that $0.52 more cents of domestic government revenues is spent in the health sector when health aid is channelled to settings where there is a SWAp in place. Such co-payment mechanisms focus more on a reciprocal relationship and open conversations between donors and local governments to enter into mutually beneficial contractual arrangements, which significantly reduces the importance of fungibility. To take the argument one step further, we should aspire towards non-siloed donor budgets which can look not only beyond vertical programs, but also beyond health towards pan social-sector relevance – then fungibility loses its meaning entirely.

As countries progress they should be establishing robust mechanisms for evidence-based priority setting to ensure that value is maximised for every rupee, peso or rand spent. Whether health spending as a share of public spending increases or decreases is of secondary importance to the question of whether money is spent wisely. In the context of a rapidly changing development assistance landscape, policymakers and donors alike should be focussing on the ‘so what’ question – what will the transition from external to domestic financing mean for health outcomes? How can donors and policymakers work together to facilitate a smooth transition? And how can domestic resources be most effectively prioritised to ensure best value health buys? The global health community needs to rise to the challenge and support policymakers across the world to spend their money better, and ensure that adequate governance mechanisms are in place to protect these finite resources against waste.

Laura Downey¹, Alec Morton², Kalipso Chalkidou^1,3

1 – Global Health and Development, Institute of Global Health Innovation, Imperial College London, London UK
2 – Strathclyde Business School, University of Strathclyde, Strathclyde UK
3 – Global Health and Policy, Centre for Global Development, London UK