Resource allocation and health financing

Innovative Financing Mechanisms: Potential Sources of Financing the WHO Tobacco Convention
Ko Sy D, Syam N, Velásquez G: South Centre Research Paper No. 54, September 2014

This research paper is produced as part of the South Centre’s research on expanding fiscal policies for global and national tobacco control. The objective of this research is to identify innovative solutions to fill the funding gaps in the implementation of the WHO Framework Convention on Tobacco Control (FCTC). Ideas and mechanisms for generating additional funding may be spawned from a review of the popular forms of non-traditional financing mechanisms that have been aimed at mobilizing resources for developmental programmes. The General Assessment section for each innovative financing idea in the paper reflects lessons learned and best practices that provide the reader with some framework when evaluating an innovative financing mechanism. Some are more administratively feasible than others but in all cases, political feasibility is a critical element. A deeper understanding of the political concerns would surface and can possibly be addressed only if the ideas are allowed to be debated on, and sufficient space to explore is provided in the appropriate forum.

Ten best resources for conducting financing and benefit incidence analysis in resource-poor settings
Wiseman V, Asante A, Price J, Hayen A, Irava W, Martins J, Guinness L, Jan S: Health Policy and Planning: 24 September 2014

Many low- and middle-income countries are seeking to reform their health financing systems to move towards universal coverage. This typically means that financing is based on people’s ability to pay while, for service use, bene-fits are based on the need for health care. Financing incidence analysis (FIA) and benefit incidence analysis (BIA) are two popular tools used to assess equity in health systems financing and service use. FIA studies examine who pays for the health sector and how these contributions are distributed according to socioeconomic status (SES). BIA determines who benefits from health care spending, with recipients ranked by their relative SES. In this article, the authors identify 10 resources to assist researchers and policy makers seeking to undertake or interpret findings from financing and benefit incidence analyses in the health sector. The article pays particular attention to the data requirements, computations, methodological challenges and country level experiences with these types of analyses.

African activists meet in Johannesburg to demand more transparent health budgets
Africa Health Budget Network: Johannesburg, South Africa, July 2014

African civil society organizations have called for greater accountability and transparency from African leaders regarding the use of public funds for the survival of mothers and babies. This call to action marks the launch of an African-led network demanding better use of existing funds for African women and children’s health as well as a greater share of African national budgets allocated to mothers and babies’ survival. While most African government have already made commitments about improving the health of their population, including through greater spending, it is difficult to check whether they are keeping their promises if the budget is not publicly available or if the information in the budget is not clearly presented. The members of the Africa Health Budget Network have compiled a scorecard[1] showing how open African Governments are about their health spending. Out of the 26 African countries profiled, only one, South Africa, is reported to be sufficiently transparent.

The promise and limitations of cash transfer programs for HIV prevention
Fieno J and Leclerc-Madlala S: African Journal of AIDS Research (2) 13, 153–160, 2014

This article examines elements of a successful cash transfer program from Latin America and discusses challenges inherent in scaling-up such programs. The authors attempt a cost simulation of a cash transfer program for HIV prevention in South Africa comparing its cost and relative effectiveness – in number of HIV infections averted – against other prevention interventions. If a cash transfer program were to be taken to scale, the intervention would not have a substantial effect on decreasing the force of the epidemic in middle- and low-income countries. The integration of cash transfer programs into other sectors and linking them to a broader objective such as girls’ educational attainment is argued by the authors as one way of addressing doubts raised by the authors regarding their value for HIV prevention.

Aid and its implications for governance
Soko KB: Pambazuka News, 3 July 2014

Malawi is one of the most aid dependent countries in the world. When one considers the work that is done by international NGOs, however, or by them through local surrogates, it is argued that there is no aspect of life in Malawi that has escaped external funding. With July 6, 2014 a day 50 years to the day when Malawi became an independent state the author argues that it’s important to accentuate the discussion on aid in Malawi and its implications for Malawi. the author argues that a heavy reliance on external funding means that foreigners, not the citizens, are in charge of the country’s governance.

Implementing Global Fund programs: a survey of opinions and experiences of the Principal Recipients across 69 countries
Wafula F, Marwa C, McCoy D: Globalization and Health 10(15): 24 March 2014

Principal Recipients (PRs) receive money from the Global Fund to fight AIDS, Tuberculosis and Malaria (Global Fund) to manage and implement programs. However, little research has gone into understanding their opinions and experiences. This survey set out to describe these, thereby providing a baseline against which changes in PR opinions and experiences can be assessed as the recently introduced new funding model is rolled out. An internet based questionnaire was administered to 315 PRs. A total of 115 responded from 69 countries in Africa, Asia, Eastern Europe and Latin America. The study was conducted between September and December 2012. Three quarters of PRs thought the progress update and disbursement request (PU/DR) system was a useful method of reporting grant progress. However, most felt that the grant negotiation processes were complicated, and that the grant rating system did not reflect performance. While nearly all PRs were happy with the work being done by sub-Recipients (92%) and Fund Portfolio Managers (86%), fewer were happy with the Office of the Inspector General (OIG). Non-government PRs were generally less happy with the OIG’s work compared to government PRs. Most PRs thought the Global Fund’s Voluntary Pooled Procurement system made procurement easier. However, only 29% said the system should be made compulsory. When asked which aspects of the Global Fund’s operations needed improvement, most PRs said that the Fund should re-define and clarify the roles of different actors, minimize staff turnover at its Secretariat, and shorten the grant application and approval processes. All these are currently being addressed, either directly or indirectly, under a new funding model. Vigorous assessments should nonetheless follow the roll-out of the new model to ensure the areas that are most likely to affect PR performance realize sustained improvement. Opinions and experiences with the Global Fund were varied, with PRs having good communication with Fund Portfolio Managers and sub-Recipients, but being unhappy with the grant negotiation and grant rating systems. Recommendations included simplifying grant processes, finding performance assessment methods that look beyond numbers, and employing Local Fund Agents who understand public health aspects of programs.

Performance-based Incentives in Mozambique: A Situational Analysis
Connor, C, Cumbi A, Borem P, Beith A, Eichler R, Charles J: Abt Associates Bethesda, MD: Health, 2011

This report presents the findings of USAID’s Health Systems 20/20 Project assessment of local interest in and capacity to implement PBIs. PBIs are reported to be legally and culturally feasible. Given the low level of health spending, limited population coverage, and estimates of unmet need in
Mozambique, the authors argue that PBIs should be designed to improve system efficiency but not be expected to reduce spending in absolute terms. Local stakeholders are repirted to be open to the PBI concept, citing CDC, USAID, and World Bank being ready to support introducing PBIs in Mozambique; however, some authorities and health worker staff express concerns about sustainability and equity of paying for performance.

Performance-based Incentives to Improve Health Status of Mothers and Newborns: What Does the Evidence Show?
Rena Eichler, Koki Agarwal, Askew I, Iriarte E, Morgan L, Watson J: Journal of Health, Population and Nutrition; 31:4: December 2013

Performance-based incentives (PBIs) aim to counteract weak providers’ performance in health systems of many developing countries by providing rewards that are directly linked to better health outcomes for mothers and their newborns. Translating funding into better health requires many actions by a large number of people. The actions span from community to the national level. While different forms of PBIs are being implemented in a number of countries to improve health outcomes, there has not been a systematic review of the evidence of their impact on the health of mothers and newborns. This paper analyzes and synthesizes the available evidence from published studies on the impact of supply-side PBIs on the quantity and quality of health services for mothers and newborns. This paper reviews evidence from published and grey literature that spans PBI for public-sector facilities, PBI in social insurance reforms, and PBI in NGO contracting. Some initiatives focus on safe deliveries, and others reward a broader package of results that include deliveries. The Evidence Review Team that focused on supply-side incentives for the US Government Evidence Summit on Enhancing Provision and Use of Maternal Health Services through Financial Incentives, reviewed published research reports and papers and added studies from additional grey literature that were deemed relevant. After collecting and reviewing 17 documents, nine studies were included in this review, three of which used before-after designs; four included comparison or control groups; one applied econometric methods to a five-year time series; and one reported results from a large-scale impact evaluation with randomly-assigned intervention and control facilities. The available evidence suggests that incentives that reward providers for institutional deliveries result in an increase in the number of institutional deliveries. There is some evidence that the content of antenatal care can improve with PBI. We found no direct evidence on the impact of PBI on neonatal health services or on mortality of mothers and newborns, although intention of the study was not to document impact on mortality. A number of studies describe approaches to rewarding quality as well as increases in the quantities of services provided, although how quality is defined and monitored is not always clear. Because incentives exist in all health systems, considering how to align the incentives of the many health workers and their supervisors so that they focus efforts on achieving health goals for mothers and newborns is critical if the health system is to perform more effectively and efficiently. A wide range of PBI models is being developed and tested, and there is still much to learn about what works best. Future studies should include a larger focus on rewarding quality and measuring its impact. Finally, more qualitative research to better understand PBI implementation and how various incentive models function in different settings is needed to help practitioners refine and improve their programmes.

Towards achieving universal health coverage in Nigeria
Business day, June 20 2014

As high out-of-pocket payment dominates Nigeria’s healthcare spending and with low priority accorded to health by state and local governments, Nigeria’s quest to attain universal health coverage by 2015 is argued in this article to be bleak. The absence of financial protection has led most Nigerians to depend on out-of-pocket payment for healthcare financing with insurance penetration, which is a measure of the relationship between premiums earned and the nation’s Gross Domestic Product, put at less than 6 percent, according to industry experts. Experts explain that achieving universal health coverage would be hard to attain without expanding the fiscal space (through increasing domestic tax revenues, expanding tax base, developing social health insurance, and getting debt relief. Analysts believe that there is need to expand contributions from large profitable companies and tax mobile phone operators to fund healthcare.
Other innovations include tobacco and alcohol exercise tax, excise tax on foods that contribute to an unhealthy diet, and additional levy on top of existing VAT rate as is in the case with countries like Chile.
Some issues to consider in evaluating each innovative method include administrative costs, magnitude of the potential revenue, political acceptability and whether such funds should go into Consolidated Government Revenues or be earmarked.

Fiscal Capacity and Aid Allocation: Domestic Resource Mobilization and Foreign Aid in Developing Countries
Bhushan A, Samy Y: UNRISD working paper number 7, 2014

In their paper on Fiscal Capacity and Aid Allocation: Domestic Resource Mobilization and Foreign Aid in Developing Countries the authors look into the interaction between fiscal performance and donor aid allocation. The analysis reveals that there is hardly any correlation between overall aid and fiscal performance and capacity. Furthermore, the authors point to gaps in terms of external funders delivering on their commitments to align with recipient country priorities and providing aid through country Public Finance Management systems - despite promises to pay greater attention to DRM efforts of recipient countries.