This article was written as Zambia went to the polls in September 2011. The author evaluated the impact of the government’s policy to abolish user fees over the past five years. When the Zambian President announced the policy change in January 2006, only three months were allocated for planning and communication, and this he notes resulted in understaffing and a lack of resources including drugs. Measures were not taken to reduce the risk of drug stock-outs and in the first year 60% of essential drugs were unavailable. Many health facilities experienced a loss of income, as compensation for lack of income from user fees was delayed by months. Between 2004 and 2006 there was a large reduction in district non-wage and district drug expenditure (down by 13% and 34% respectively). Overall, quality of health care suffered and patients faced longer waiting times, fewer drugs, and overworked staff. The author argues that, despite the significant shortcomings of the current system, canceling free health care is not an option in a poor country like Zambia. He urges that the issues identified in the evaluation be urgently addressed by the Government of Zambia with aligned support from development partners.
Resource allocation and health financing
Before free care for pregnant women and children was introduced in Sierra Leone, 88% of citizens said that their inability to pay was by far the greatest barrier to accessing care when sick. Just 12 months after the introduction of free care, medical care for children under five has increased by 214% and the proportion of children getting approved treatment for diagnosed malaria increased from 51% to 90%. Forty-five percent more pregnant women are delivering in formal clinics and hospitals and the number of delivery complications treated in health units increased 150%, while fatality rate in these cases fell by 61%. Success was achieved, the author of this article argues, through a high level of political commitment and leadership from the President of Sierra Leone and key staff within the Ministry of Health, as well as health worker reform including the elimination of 850 ghost workers from the payroll and salary increases of at least 100% for all staff. Over 1,000 additional workers were hired, facilities were upgraded and major resources and effort went into sorting out the key issue of medicines supply. Countries that want to implement free health care shouldn’t have to wait for external funders to get their house in order, the author concludes – like Sierra Leone, they should kick start progressive policies in the interests of their citizens that external funders will be forced to follow.
The authors of this paper suggest that the debate around performance-based financing (PBF) has become polarised, and argue for a more balanced approach. PBF is not a panacea and the provision of inputs, provider training, supervision and health-system strengthening should continue with the aim of producing results. A research agenda and an effective community of practice embracing all views on PBF is critical to understanding more about its potential for helping developing countries to reach some of the United Nations Millennium Development Goals.
Dependency on aid (external funding) among 54 of the world’s poorest countries has declined by a third over the last decade, according to this new report from ActionAid. The number of low income countries (LICs) receiving external funding equivalent to 30% of government expenditure or more has reduced from 42 to 30 in the past decade. In Zambia, for instance, external funding has fallen from 84% of government expenditure to just 44%. ActionAid notes the apparent paradox that while external funding has increased globally, dependence on the funding has reduced because of strong economic growth. Allied to growth is a new-found determination among poor countries to end 30 or more years of dependence on funding that has seldom delivered the kind of development for which they had hoped. Some of the poorest countries in the world, including Ghana, Rwanda, and Uganda, have set reducing this type of dependence as a key medium-term goal in their national development or aid-management policies. Reliance on external funding in Ghana has reduced from 46% to 27%, Mozambique from 74% to 58% and Rwanda from 86% to 45%.
The financial sector is traditionally under-taxed relative to the rest of the economy, so it is ideally suited as a source of taxes that can be used for global health, according to this brief. Taxes on the sector are also predominantly progressive, falling on the richest institutions and individuals. Harm Reduction International (HRI) proposes a financial transaction tax (FTT) that collects a tiny percentage (between 0.5% and 0.005%) of the value of each financial product that is traded. An average tax of just 0.05% on transactions (such as bond and share sales) could raise as much as US$409 billion a year, HRI notes, significant funding for disease responses and health system strengthening in poorer countries. HRI cautions that the FTT would be in addition to - not instead of - government commitments to overseas development assistance, so it could help bridge the resource gap that currently exists to achieve the Millennium Development Goals.
Low-income countries bear over 60% of the HIV disease burden, but ActionAid argue that their total annual resources for HIV went down from 2009 to 2010. This raises a gap between resources available and needed. To close this gap by 2015, UNAIDS estimate that the international community needs to raise an additional US$6 billion annually, with a parallel increase in commitments for the period 2011-2020. Proposed potential sources of funding include innovative financing mechanisms, indirect taxation (airline tickets, mobile phone usage, exchange rate transactions), front-loading mechanisms (IFF-Im) and advance market commitments. The author urges pharmaceutical companies to enter into negotiations with the Patented Medicines Pool and to ensure that the geographic scope of these licensing agreements includes low- and middle-income countries.
From 9 to 13 July 2011, members of the Future Health Systems consortium gathered in Toronto, Canada, to participate in the 8th World Congress on Health Economics (iHEA 2011). Following a keynote address that considered the risks of a polarised debate between private or public health care, a presentation considered the future of working with health markets. The focus of the Congress was how to deliver quality health services. Participants argued that ensuring quality in inequitable contexts requires the skillful combination of commodities with knowledge. With this in mind, two panels were convened to look at how both supply side and demand side factors can be altered to improve quality of health care, in terms of both ethics and economics.
In the run-up to the fourth High-level Forum on Aid Effectiveness in Busan, South Korea, in November 2011, analysts are warning that aid measurements cannot be "dumbed down", particularly in fragile states. The UK Overseas Development Institute (ODI) has condemned the much-praised British campaign, Make Poverty History, which suggests that all that is required to solve poverty is for rich nations to give money to poor ones. In contrast, the ODI argued that development processes tend to be complex and time-consuming, especially in fragile states and states emerging from conflict. While politicians, press and voters in donor countries often demand greater transparency and less corruption as part of their aid effectiveness criteria, citizens in recipient countries may prioritise other issues like job creation or better health services. This gap in priorities needs to be addressed, the ODI concludes. The World Bank said the Busan meeting should present new funding opportunities, as increasingly important `non-traditional' development funders, such as China, India and the Arab states, will be present, and they will demand effectiveness criteria that are different from those of traditional external funders like the European Union and the United States.
According to AFRODAD, tax revenues are, on average, lower in developing countries than in rich countries; the average revenue in African countries was approximately 15% of GDP in 2008. Hence the argument that if developing countries were able to collect sufficient tax revenues, they might be able to increase their independence, the provision of social protection, infrastructure and basic services such as education and health care which are crucial for development. The two reports on Mozambique and Zimbabwe reveal that mobilising domestic resources as a means to financing development has become an important development issue, a shift from the past emphasis on financing development from aid and external borrowing. For a long time mobilising domestic revenue has been neglected, despite being a better long-term option, AFRODAD argues. The reasons for this included the inherent pessimism about raising revenue, a prevalent ‘small-state’ ideology and a preference for foreign aid-led solutions. AFRODAD proposes that progressive taxation should play an important role in shaping the distribution of benefits from higher-income citizens to those most in need in a country. The reports also examine the various complexities surrounding taxation as a development finance mechanism in the two country cases including the current tax framework, the amount and extent of tax evasion and more specifically tax incentives and governance in various sectors of the economy. They conclude with policy and institutional recommendations to the governments of Mozambique and Zimbabwe – and civil society – to refine their tax systems.
In this study, researchers analysed Global Fund grant data from 122 recipient countries as an initial exploration into how well these grants are performing in fragile states as compared to other countries. Since 2002, the Global Fund has invested nearly US$ 5 billion in 41 fragile states, and most grants have been assessed as performing well, the researchers found. Nonetheless, statistically significant differences in performance exist between fragile states and other countries, which were further pronounced in states with humanitarian crises. This indicates that further investigation of this issue is warranted: variations in performance may be unavoidable given the complexities of health governance in fragile states, but may also have implications for how the Global Fund and others provide aid. For example, faster aid disbursements might allow for a better response to rapidly changing contexts, and there may need to be more of a focus on building capacity and strengthening health governance in these countries.