Resource allocation and health financing

Financing A National Health Insurance for South Africa
The Davis Tax Committee: Ministry of Finance, South Africa, 2017

The Davis Tax Committee was established in 2013 by the Minister of Finance to inquire into the role of the tax system in promoting inclusive economic growth, employment creation, development and fiscal sustainability. This report concentrates on identifying long term financing principles – the specific operationalisation which will be informed by more detailed implementation and costing plans in order to manage the transition from the status quo to the financing regime envisaged in the National Health Insurance (NHI) in South Africa. This report examines the definition, rationale and design of the proposed NHI. It explores international experience in financing universal health coverage, with a focus on middle income developing countries and existing sources of health financing in South Africa are analysed. Cost estimates and potential macroeconomic impacts are discussed and the report concludes with an evaluation of options for NHI financing. The authors identify a number of factors in the design of NHI, as well as its implementation, all of which have an impact on its financing trajectory. These include parameters on risk pooling, on health care purchasing and on provision. Risk pooling decisions include whether there would be a single or multiple purchaser, the level of consolidation of risk pools and their coverage and composition as well as the nature of the resources allocation formula (evidence and needs based, risk equalisation etc.). The structure of purchasing encompasses, inter alia, the scope and pricing of the benefit package (which had not yet been defined in the White Paper), contractual arrangements with health care providers such as GPs and hospitals, quality management systems, payment and information systems.

A Political Economy Analysis of Domestic Resource Mobilization in Uganda
Kjær A; Ulriksen M; Kangave J; Katusiimeh M: United Nations Research Institute for Social Development WP 2017-8, Geneva, 2017

This synthesis paper brings together the research findings from four papers prepared by the Uganda team in the UNRISD Politics of Domestic Resource Mobilisation for Social Development project. It addresses three broad themes: bargaining and contestation, key relations, and institution building with regard to mobilising resources for social development. The authors analyse how political economy factors affect revenue raising and social spending priorities in Uganda. It applies a political settlement theory, exploring revenue bargaining or political negotiations that shape revenue mobilisation, revenue composition and policy priorities guiding revenue allocation. The authors focus on three instances of revenue bargains: legislative tax reform, institutional performance of the revenue agencies, and policy making. The first two instances relate to the actual mobilisation of resources, whereas the third example focuses on bargains over spending priorities within a given revenue base. The findings indicate that in Uganda, a low-income country with competing political factions, there are specific challenges to mobilising resources for social development. The need to maintain political power is argued by the authors to have led to reduced tax intakes as taxes levied on rural voters are abolished and tax exemptions introduced for powerful supporters. On the spending side, social development concerns are argued to compete with other public policy areas as well as the pressure to allocate resources for political purposes.

Financing transformative health systems towards achievement of the health Sustainable Development Goals: a model for projected resource needs in 67 low-income and middle-income countries
Stenberg K; Hanssen O; Edejer T; et al.: The Lancet Global Health 5(9), e875-e887, 2017

No estimates of the additional resources needed to strengthen comprehensive health service delivery towards the attainment of SDG 3 and universal health coverage in low-income and middle-income countries have been published. The authors developed a framework for health systems strengthening, within which population-level and individual-level health service coverage is gradually scaled up over time. They developed projections for 67 low-income and middle-income countries from 2016 to 2030, representing 95% of the total population in low-income and middle-income countries. The authors considered four service delivery platforms, and modeled two scenarios with differing levels of ambition: a progress scenario, in which countries' advancement towards global targets is constrained by their health system's assumed absorptive capacity, and an ambitious scenario, in which most countries attain the global targets. They estimated the associated costs and health effects, including reduced prevalence of illness, lives saved, and increases in life expectancy. They projected available funding by country and year, taking into account economic growth and anticipated allocation towards the health sector, to allow for an analysis of affordability and financial sustainability. The authors estimate that an additional $274 billion spending on health is needed per year by 2030 to make progress towards the SDG 3 targets (progress scenario), whereas US$371 billion would be needed to reach health system targets in the ambitious scenario—the equivalent of an additional $41 or $58 per person, respectively, by the final years of scale-up. In the ambitious scenario, total health-care spending would increase to a population-weighted mean of $271 per person across country contexts, and the share of gross domestic product spent on health would increase to a mean of 7.5%. Around 75% of costs are for health systems, with health workforce and infrastructure (including medical equipment) as the main cost drivers. Despite projected increases in health spending, a financing gap of $20–54 billion per year is projected. Should funds be made available and used as planned, the ambitious scenario would save 97 million lives and significantly increase life expectancy by 3.1–8.4 years, depending on the country profile. All countries will need to strengthen investments in health systems to expand service provision in order to reach SDG 3 health targets, but even the poorest can reach some level of universality. In view of anticipated resource constraints, each country will need to prioritise equitably, plan strategically, and cost realistically its own path towards SDG 3 and universal health coverage.

Zimbabwe Parliament To Boycott 2018 Budget Unless It Meets Abuja Target
: Pembere K: Health Times, 11 October 2017

The Zimbabwe Parliamentary Portfolio committee on Health says it will not entertain a flimsy allocation of funds to the health sector in the forthcoming 2018 budget presentation unless the 15% Abuja target is met. Zimbabwe is a signatory to the Abuja Declaration of 2001 in which African Union countries pledged to allocate at least 15 percent of their annual budgets to improving the health sector. Since then, the country is yet to meet the target. In the 2017 budget, the health sector only got 7 percent of total government spending. Non state organisations expect the treasury to meet the Abuja declaration which states that 15 percent of the National budget should be dedicated to health to show commitment to ensuring a healthy and productive nation. Presenting the 2017 national budget, the then Finance and Economic Development Minister Patrick Chinamasa announced that $281,9 million will be channeled towards the sector inclusive of remuneration for the public health care personnel ($223 million), operations and maintenance ($29,6 million), as well as capital expenditure that has been pegged at $29,5 million. Binga North MP Prince Dubeko Sibanda sharing his experience in Uganda learnt that if a budget ignores the plight of the marginalized it doesn’t get Parliamentary approval to be passed. “One thing I took in Uganda, they have got a law which says unless the budget meets certain criteria or takes care of people that are generally marginalized that budget should not be passed. Its part and parcel of their law. Its never passed,” the parliamentarian said.

Zimbabwe's public sector health spending one of the lowest in SADC
Langa V: NewsDay October 2017

Zimbabwe government spending towards health this year averaged US$21 per person, lower than 2016 levels, the Community Working Group on Health (CWGH), in Zimbabwe, said in its contribution to the 2018 National Budget consultations. CWGH said the per capita allocation towards health is one of the lowest in the Southern African Development Community (SADC) region whose average spending on health per person is $146. CWGH raised concerns about the total budget allocation to health, which has remained lower than the 15% of the total budget committed to in the Abuja Declaration. The CWGH said Zimbabwe has made significant gains in the area of HIV prevalence, child and maternal mortality, but noted an over-dependence on external funding, poor infrastructure and ill-equipped hospitals, as well as a worrying ratio of patients to health personnel. The CWGH observed that Zimbabwe relies heavily on imports for drugs, equipment and other hospital consumables, and called for government to broaden the tax base to fund health.

“If donors woke up tomorrow and said we can't fund you, what would we do?” A health system dynamics analysis of implementation of PMTCT option B+ in Uganda
Doherty T; Besada D; Goga A; Daviaud E; Rohde S; Raphaely N: Globalisation and Health 13(51) 2017

In October 2012 Uganda extended its prevention of mother to child HIV transmission (PMTCT) policy to Option B+, providing lifelong antiretroviral treatment for HIV positive pregnant and breastfeeding women. The rapid changes in and adoption of new PMTCT policies are argued by the authors to have not been accompanied by research to explore health system preparedness to implement such programmes. The implementation of Option B+ provides many lessons which can inform the shift to ‘Universal Test and Treat’, a policy which many sub-Saharan African countries are preparing to adopt, despite fragile health systems. This qualitative study of PMTCT Option B+ implementation in Uganda three years following the policy adoption, uses the health system dynamics framework to explore the impacts of this programme on ten elements of the health system. Qualitative data were gathered through rapid appraisal during in-country field work. Key informant interviews and focus group discussions (FGDs) were undertaken with the Ministry of Health, implementing partners, multilateral agencies, district management teams, facility-based health workers and community cadres. The authors conducted a simple manifest analysis, using the ten elements of a health system for grouping data into categories and themes. Of the ten elements in the health system dynamics framework, context and resources (finances, infrastructure and supplies, and human resources) were the most influential in the implementation of Option B+ in Uganda. Support from international actors and implementing partners attempted to strengthen resources at district level, but had unintended consequences of creating dependence and uncertainty regarding sustainability. The health system dynamics framework is argued to offer a novel approach to analysis of the effects of implementation of a new policy on critical elements of the health system. Its emphasis on relationships between system elements, population and context is helpful in unpacking impacts of and reactions to pressures on the system, which adds value beyond some previous frameworks.

Global funding trends for malaria research in sub-Saharan Africa: a systematic analysis
Head M: Lancet Global Health 5, doi: http://dx.doi.org/10.1016/ S2214-109X(17)30245-0, 2017

Total domestic and international funding for malaria is inadequate to achieve WHO global targets by 2030. The authors describe the trends of investments in malaria-related research in sub-Saharan Africa and compare investment with the national disease burden to identify areas of funding strength and potentially neglected populations, including that for malaria control. Research funding data related to malaria for 1997–2013 were sourced from existing datasets, from 13 major public and philanthropic global health funders, and from funding databases. Investments (reported in US$) were considered by geographical area and compared with data on parasite prevalence and populations at risk in sub Saharan Africa. 45 sub-Saharan African countries were ranked by amount of research funding received. The authors found 333 research awards totalling US$814.4 million. Public health research covered $308.1 million (37.8%) and clinical trials covered $275.2 million (33.8%). Tanzania ($107.8 million [13.2%]), Uganda ($97.9 million [12.0%]), and Kenya ($92.9 million [11.4%]) received the highest sum of research investment and the most research awards. Malawi, Tanzania, and Uganda remained highly ranked after adjusting for national gross domestic product. Countries with a reasonably high malaria burden that received little research investment or funding for malaria control included Central African Republic (ranked 40th) and Sierra Leone (ranked 35th). Congo (Brazzaville) and Guinea had reasonably high malaria mortality, yet received little investment. Some countries receive reasonably large investments in malaria-related research (Tanzania, Kenya, Uganda), whereas others receive little or no investments (Sierra Leone, Central African Republic). Research investments are typically highest in countries where funding for malaria control is also high. The authors suggest that investment strategies should consider more equitable research and operational investments across countries to include currently neglected and susceptible populations.

Seven key messages from the World Health Organisation meeting on Global Strategic Purchasing
Barasa E: Resilient & Responsive Health Systems (RESYST), London School of Hygiene and Tropical Medicine, June 2017

The purchasing function of health financing is gaining increasing attention and traction in global health systems and universal health coverage (UHC) debates, which have, in the past, focused predominantly on revenue collection and pooling. A recent workshop convened by the World Health Organisation on strategic purchasing. In the blog, the author summarises seven key messages from the workshop that are likely to feature in future discussions on strategic purchasing. Purchasing refers to the process by which funds are allocated to healthcare providers to obtain services on behalf of identified groups. Strategic purchasing is a continuous search for the best ways to maximise health system performance, by deciding which interventions should be purchased, how, and from whom. It is typically considered from the point of view of the purchaser. However, by looking at it from the perspective of healthcare facilities, a complex picture of multiple purchasers and funding flows emerges. A key responsibility of healthcare purchasers is in deciding what to include in the benefit package for health. However, decisions about priority setting are often neglected in this process. The governance boards of many purchasing organisations, such as social health insurers, include representatives from the government, employers (e.g. an umbrella employer association) and employees (labour unions). However, in most low and middle income countries, a significant proportion of the population work in the informal sector. They do not belong to the labour unions, and do not have formal employers to represent them on such boards. A further governance issue is the perennial problem regarding oversight of purchasers that are separate entities from the Ministry of health, such as social health insurers. Strategic purchasing cannot occur in the absence of good quality data. Often information systems are fragmented, presenting a partial view of the system. While it was appreciated that Results Based Financing (RBF) can contribute to strategic purchasing and act as a catalyst for health system reform, there is a need to ensure that RBF mechanisms are embedded and integrated within the wider health system. Strategic purchasing is argued to be not just a technical issue, but also a political issue.

WHO estimates cost of reaching global health targets by 2030
World Health Organisation: WHO, Geneva, 2017

The SDG Health Price Tag estimates the costs and benefits of progressively expanding health services in order to reach 16 Sustainable Development Goal (SDG) health targets in 67 low- and middle-income countries that account for 75% of the world’s population. The analysis shows that investments to expand services towards universal health coverage and the other SDG health targets could prevent 97 million premature deaths globally between now and 2030, and add as much as 8.4 years of life expectancy in some countries. While most countries can afford the investments needed, the poorest nations will need assistance to reach the targets. The SDG Health Price Tag models two scenarios: an “ambitious” scenario in which investments are sufficient for countries to attain the health targets in the SDGs by 2030, and a “progress” scenario in which countries get two thirds or more of the way to the targets. These investments would boost health spending as a proportion of gross domestic product across all 67 countries from an average of 5.6% to 7.5%. The global average for health spending as a proportion of GDP is 9.9%. Although higher spending does not necessarily translate to improved health, making the right investments at the right time can. The SDG Health Price Tag does not prescribe what countries should spend on health, but is intended as a tool to inform further research. It also highlights that achieving universal health coverage and the other health targets requires not only funding but political will and respect for human rights. WHO plans to update the estimates every five years and will include other health-related targets and diseases as more evidence becomes available.

Financing transformative health systems towards achievement of the health Sustainable Development Goals: a model for projected resource needs in 67 low-income and middle-income countries
Stenberg L; Hanssen O; Edejer T; et al.: The Lancet Global Health, Doi: http://dx.doi.org/10.1016/ S2214-109X(17)30263-2, 2017

The ambitious development agenda of the Sustainable Development Goals (SDGs) requires substantial investments across several sectors, including for SDG 3 (healthy lives and wellbeing). No estimates of the additional resources needed to strengthen comprehensive health service delivery towards the attainment of SDG 3 and universal health coverage in low-income and middle-income countries have been published. The authors developed a framework for health systems strengthening, within which population-level and individual-level health service coverage is gradually scaled up over time and calculated projections for 67 low-income and middle-income countries from 2016 to 2030. The authors estimated that an additional $274 billion spending on health is needed per year by 2030 to make progress towards the SDG 3 targets (progress scenario), whereas US$371 billion would be needed to reach health system targets in the ambitious scenario—the equivalent of an additional $41 or $58 per person, respectively, by the final years of scale-up. In the ambitious scenario, total health-care spending would increase to a population-weighted mean of $271 per person across country contexts, and the share of gross domestic product spent on health would increase to a mean of 7.5%. Around 75% of costs are for health systems, with health workforce and infrastructure (including medical equipment) as the main cost drivers. Despite projected increases in health spending, a financing gap of $20–54 billion per year is projected. Should funds be made available and used as planned, the ambitious scenario would save 97 million lives and significantly increase life expectancy by 3·1–8·4 years, depending on the country profile. All countries will need to strengthen investments in health systems to expand service provision in order to reach SDG 3 health targets, but even the poorest can reach some level of universality. In view of anticipated resource constraints, each country will need to prioritise equitably, plan strategically, and cost realistically its own path towards SDG 3 and universal health coverage.

Pages