# Session Overview ## Learning outcomes - Demonstrate an understanding of the concepts of global health financing and development assistance for health; - Examine key issues in global health finance spending and outcomes; - Identify the range of actors involved and their influences; - Identify and assess challenges in achieving effective global health financing; and - Understand the impact of the COVID-19 pandemic on global health financing # 1. Introduction Measurements of spending are based on development assistance for health ([[DAH]]) data, defined as the as “the financial and in-kind contributions transferred through major development agencies to LMICs for maintaining or improving health” (Zhao et al 2020). This session focuses on trends in DAH, the main global donors and the relationships between these actors and recipient countries. It also assesses inefficiencies in the global health financing system, reasons for them and possible remedies. Finally, it considers challenges to the global funding of health, including challenges associated with the COVID-19 pandemic # 2. What is global health financing? McCoy et al (2009) define global health financing as “any external finance channelled towards the health sector of low- and middle-income countries (LMICs) in order to meet the needs of predominantly poor population groups.” In 2018, $40.4 billion in DAH was provided to LMICs (IHME 2020). But this represents a relatively small share of the overall global health spending figure, which was estimated to be $8.4 trillion1 in that same year. Larger spending categories are: national government health budgets; out of pocket expenditures (paid directly by patients where insurance or government programs do not cover the full cost of health care); and pre-paid private insurance (see Figure 1). While DAH constitutes a fraction of spending on global health, its significance lies in its support for low-income countries particularly, where 25% of health spending in 2018 was DAH, compared to 3.3% in lower-middle-income countries (IHME 2021). ## 2.1 Key issues - Plateu of recent years due to increasing threats to global health, eg, climate change, conflict-related displacement of populations, and demographic and epidemiological transitions resulting in older populations in many countries. - External pressures also exist - most notably the nationalistic focus of governments in many HICs - Fragmentation of funding due to absent or inadequate collaboration, and funding be used only for specific purposes in line with their interests, and concerns that DAH may undermine recipient countries by ignoring their agendas and priorities. ### 2.1.1 Trends in [[DAH]] - Steady from 1990 but plateus in late 1990s and between 2013 and 2019. The level of financing between 2019-2020 was the greatest recorded. - COVID-19 funding aside, the decade from 2010 - 2020 saw a levelling-off of DAH provision. - SDG targets have been split into two scenarios: an "ambitious scenario" in which investment is sufficient for countries to achieve health targets; and a "progress scenario" in which countries reach two thirds or more of the target. - The IHME describes other health focus areas as “development assistance for health for which we have health focus area information but which is not identified as being allocated to any of the health focus areas listed”, while “health assistance for which we have no health focus area information is designated as ‘Unallocable.’” ‘Development assistance for health systems strengthening (HSS)’ and ‘sector wide approaches’ ([[SWAps]]) are funding categories aimed at strengthening health systems. HSS is generally focused on improvements to access and efficiency of health care. - [[SWAps]] were developed in the early 1990s in an effort to improve coherence between donor and recipient objectives and were intended as long-term partnerships led by national governments. Funding is intended to support national policies, strategies and expenditure frameworks to improve population health. While they continue to exist, the concept has been overtaken by the emergence of powerful new global health actors such as the [[Global Fund to Fight AIDS, Tuberculosis, and Malaria (GFATM)]] and the [[Bill & Melinda Gates Foundation]] (Peters et al 2012). ### 2.1.2 Targeting developmental assistance for health DAH is largely disease-focused, while funding for structural initiatives such as health systems strengthening (HSS) and sector wide approaches (SWAps) is significantly less. It is also the case that funding for diseases is far from equitable. The clear imbalance between support for disease-specific vertical programmes, and horizontal system strengthening has been the source of an important debate in global health. Investment in vertical initiatives has been questioned as gains made may not be sustainable in the face of funding fluctuations and a lack of health system improvements that conceptually define HSS (Hemingway et al 2021). Critics have described HSS as a poorly-defined term, and argue that efforts to explain what the idea actually constitutes have been influenced by organisational and political interests. It also been found that some ostensibly HSS programmes have actually been selective, disease-specific projects (Witter et al 2019). ### 2.1.3 Does global health financing 'work'? - Monitoring overall effectiveness remains complicated due to accountability, incosistency in data collection and reporting methods within and across countries, etc. - Data sources use different metrics - can create challenges in analysing disbursement patterns and trends. Some aid also not reliably tracked, and IHME inclusion of unallocable funding of $7 billion suggest some of the problems inherent in monitoring financial assistance. - There have also been criticisms of ‘[[phantom aid]]’ - monies committed to a recipient country that in fact, remain with the donor country in the form of administrative costs or debt relief (Missoni et al 2019). Examples include the proportion of DAH that pays donor organisation staff and consultants’ salaries, and donor costs for administration, meetings and conferences (Spicer et al 2020). - A related concern is that aid can be ‘tied’ to the donors’ market. Tied aid refers to a ==funding arrangement whereby recipient countries must purchase some amount of goods, such as medicines or clinical equipment, from companies located within donor countries==. In effect, [[power operates in multiple and interconnected ways and that different forms of power are at play simultaneously in socio-political relations|donor governments]] are reserving a proportion of DAH provided for suppliers from their own countries. This results in higher costs to recipient countries who could otherwise find goods and material at cheaper prices on the open market. Such arrangements can reportedly increase costs of a development project by as much as 15% to 30% (Missoni et al 2019). - ==Assistance for NCDs has been lacking==. However, as noted earlier, for some health areas DAH has been lacking. This is particularly true of assistance for non-communicable diseases (NCDs) (Jailobaeva et al 2021), which are the cause of 71% of global deaths (three-quarters of which occur in LMICs) and account for nearly three times as many deaths as communicable, maternal, neonatal, and nutritional diseases and injuries combined. Yet NCDs attracted only $887 million in DAH in 2020, or 1.8% of total DAH spending (IHME 2020), despite their inclusion in the SDGs. One important reason is that infectious diseases programmes have established, low-cost management strategies within the health sector that are simpler to deliver than the complex behaviour change strategies necessary for multisectoral NCD prevention and control. Plus, there is little data on cost-effectiveness of interventions to tackle NCDs (Jailobaeva et al 2021). ## 2.3 Activity 1. Funding for mental health 1. First, watch this short (3:37) 2010 interview with Dr Vikram Patel, Pershing Square Professor of Global Health, Harvard Medical School and formerly of the London School of Hygiene and Tropical Medicine, who suggests reasons for the low prioritisation of mental health http://www.youtube.com/watch?v=sx3CnS3ejrE&feature=related 2. Then watch this 2018 video (3:02) produced by the Lancet Commission on Global Mental Health https://www.youtube.com/watch?v=whRrAy6xSRU. Do you get the sense that much has changed since 2010? What are the Commission’s recommendations, and do they seem likely to meet the challenges outlined in the first video? *Post 2-3 short points on the videos, and provide constructive feedback on posts by other students.* # 3. Key actors in global health financing ## 3.1 Funders, channels and implementing institutions - In 2018, there are 203 *transnational* actors that have a primary intent to improve health and the *polylateral arrangements* for *governance, finance, and delivery* within which these actors operate. - The IHME’s (2020) ==global health financing model further categorises actors into funders, channels and implementing institutions==. National governments and philanthropic organisations are the main funding sources, while channels of assistance include bilateral and multilateral development agencies, foundations, global health partnerships, and NGOs; and implementing institutions encompass national ministries of health, NGOs, private sector contractors, and research institutions. - Lastly, what Missoni et al (2019) describe as the “progressive change in the economic and geopolitical equilibrium” has resulted in the emergence of new donor countries and financing streams. The BRICS countries, Brazil, Russia, India, China and South Africa, have been increasing their contributions to DAH, while countries in the Middle East and North Africa including Saudi Arabia, Kuwait and United Arab Emirates (UAE) have been among the world’s largest donors for decades but details are sparse. Information on their contributions has been, however, difficult to obtain due to reporting procedures (Zhao et al 2020). ## 3.2 Donor motivation - They range from the altruistic - a desire to prevent avoidable mortality and disease, alleviate poverty, foster economic growth, and improve educational outcomes – to protecting their own populations (in the case of states) from pandemics, and promotion of political, economic or foreign policy interests (Jamison et al 2017). - Bollyky (2018) describes the surge in investment to combat infectious diseases since the early 2000s, for example, as being driven by “an idiosyncratic mix of motivations”, some humanitarian and some geostrategic. - At state level, Nye argues that “a country’s soft power rests on its resources of culture, values, and policies”, in contrast to ‘hard power’ which is based on coercion and backed up by military and/or economic might. The WHO (2015) has noted that health can “be an important instrument of soft power and relationship-building between countries, especially when cooperating in other areas of foreign policy is difficult”. - Returning to PEPFAR, opinion poll surveys taken in forty-five countries following the launch of PEPFAR in 2003 and the US President’s Malaria Initiative in 2005, found consistently more favourable attitudes toward the US among recipient populations (Jakubowski et al 2019). Finally, the COVID-19 pandemic has created opportunities for many countries, including China, India, Russia and the United States to “persuade and attract through the [[soft power of vaccines]]” (Pannu et al 2021; Kickbusch et al 2020; Stokes 2021). # 4. Challenges facing global health financing ## 4.1 Initiatives to improve DAH effectiveness The Paris Declaration on Aid Effectiveness (OECD 2005) is arguably the most important, for its establishment of principles to improve the aid process: - Ownership: recipient countries exercise leadership over their own objectives and policies; donor countries respect recipient leadership; - Alignment: donors base support on recipient countries development strategies and procedures, coordinate and simplify procedures and share information to avoid duplication; - Harmonisation; donors harmonise procedures and make them more transparent and collectively effective; - Managing for results: managing resources and improving decision-making with a focus on results; - Mutual accountability: donors and recipients are accountable to each other for development results (OECD 2005). ## 4.2 The [[DAH]] shortfall - The most immediate challenge facing DAH is the gap between funding committed, actual disbursement and financial needs of LMICs. The most immediate challenge facing DAH is the gap between funding committed, actual disbursement and financial needs of LMICs. - Dieleman, Cowling, Agyepong et al (2019) argue that thinking around DAH must adapt to evolving challenges including the increasing impact of climate on global health; displacement of populations due to conflict; and a growing focus on national interests exhibited by many states; and demographic and epidemiological transitions resulting in older populations experiencing related health conditions. Their assessment, however accurate, only underlines the current DAH funding shortfall. - The OECD’s (2020) sombre assessment is that the ‘[[scissor effect]]’ in recent years of increasing needs and declining resources has been exacerbated by the COVID-19 pandemic, and that progress toward the SDGs may be slowed or even reversed. The annual SDG financing gap in developing countries, it cautions, could increase by $1.7 trillion (note: this estimate is across all 17 SDGs, not just SDG 3). These predictions reinforce the inherently volatile and uncertain nature of funding. Such unpredictability can be especially detrimental when DAH underwrites ongoing costs such as drugs, salaries and transport, and detrimental to long-term initiatives to improve health systems (Moon and Omole 2017; Missoni et al 2019). ## 4.3 Fungibility and accountability [[Fungibility]] describes the process whereby DAH is disbursed to the health sector by donors, but recipient governments reallocate donor funding or displace their own resources to fund other priorities. This ties into broader concerns around weak accountability mechanisms in the current DAH system. ## 4.4 Prioritisation How DAH priorities are established involves three main issues: ==to what extent donor interests, recipient needs or other factors determine priorities; who should set priorities; and how should priorities be set, i.e. based on objective indicators such as disease burden or through wider participatory processes==(Moon and Omole 2017). With regard to state funding specifically, donor governments do not have the same fiduciary responsibilities to populations of recipient countries as they do to their own populations, which can result in funding priorities that may have little relevance to the needs of recipients (Bendavid et al 2017). ## 4.5 Fragmentation [[Proliferation of public and private actors working on health issues is considered one of the main causes of fragmentation in global health governance|DAH fragmentation]] refers to inadequate levels of coordination between donors, and insufficient alignment of [[Robert Dahl argued that power is the ability to influence outcomes, to prevail in decision-making, to impose one's preferences, and even to dominate|donor priorities]] , systems and interventions with those LMICs receiving aid (Spicer et al 2020). Such systematic deficiencies can result in “duplication of services, dilution and distortion of limited human and financial resources, and weak coordination between levels of care and is both a product and perpetuator of short-term, siloed, [[vertical program|vertical]] approaches to development (Barr et al 2019). Spicer et al (2020) have identified five distinct but interconnected factors that lead to fragmentation, examined in turn below: the proliferation of global health actors and their divergent interests; issues of accountability; problems of power relations; and leadership of global health. ### 4.5.1 Proliferation of global actors With so many actors, DAH [[Governance, order and change in world politics|governance]] in global health significantly affected. Until 2000, half of DAH was distributed bilaterally, much of it from the OECD and development member countries. The remainder went through with the WHO, UNICEF, and other multilateral institutions. The emergence of new donor countries also added a layer of complexity. MENA region, BRICS, have also been making important commitments to global health. Of the BRICs states, [[China has become an increasingly important global health actor]]. Micah et al (2019) describe global health as a main pillar of China’s Belt and Road Initiative, which aims to link the country to Central and South Asia, the Gulf countries, North Africa and Europe. China also contributed substantially to help contain the Ebola crisis in West Africa and has engaged with other donors, including the USA, to establish the Africa Centres for Disease Control and Prevention. The country has been increasing support to WHO, and began contributing to Gavi, the Vaccine Alliance in 2016 (Chang et al 2019; Micha et al 2019). ### 4.5.2 Divergent interests Self-interest of global health actors can lead them to adopt priorities and approaches that do not align with recipient LMICs. National interests that have grown out of specific histories, political systems and values have contributed to carrying out broader geopolitical agendas. It is also conceded that DAH from high income countries is primarily [[As the architecture of global health changes, its governance is shifting away from WHO and towards donors|driven by national strategic and political agendas]]. Global health security has been described as efforts by high income countries to protect their own citizens and economies; this results in significant levels of funding being directed towards communicable diseases that may spread from LMICs. DAH can also be used to promote trade and investment and open new markets in recipient LMICs and, as described above, to ‘tie’ aid to donor markets. Self-interest can also be reflected in ‘[[phantom aid]]', also discussed above. Funding arrangements made by both national government and non-governmental funding agencies often include substantial sums in staff salaries and administration costs (Spicer et al 2020). ### 4.5.3 Problems of accountability Inadequate levels of donor accountability to LMIC governments and recipients is contrasted with greater accountability to high-income country governments and taxpayers. Pressure to deliver results to governments that fund agencies can lead to an emphasis on bilateral, vertical projects that are more easily quantifiable at the expense of multilateral projects or efforts to strengthen the health system that have with longer term, less explicitly demonstrable outcomes. This focus on individual donor priorities discourages harmonisation between global funders. [[Insights]] This is a very important point in [[global health policy]]. If we seek to understand why the [[vertical program]] are mainstream, it's because the accountability and pressure to deliver lies in the national government of donor countries, not the recipient countries. ### 4.5.4 Problems of power relations The current DAH system has been described as impeding economic growth in LMICs, while facilitating the interests of high-income donors and transnational. Khan et al (2018) argue that power relationships between donor and recipient are “more complex and multifaceted than simply donors having direct influence over decisions by controlling resource allocation” and extend to all levels of the national policy-making process. From influencing which health issues get onto decision-making agendas, to emphasising donor targets linked to global health programs, donor influence can permeate the entire policy-making process. This situation is underpinned by donor ability to control indirect financial and political incentives as well as direct control of financial resources. ### 4.5.5 Problems of global leadership The burgeoning number of initiatives, public and private actors, and agendas has contributed to challenges to effective global health leadership as no single “actor, institution or process exists that is able to harmonise the multitude of global health actors, and there is of course no ‘global government’ with jurisdiction over different countries” (Spicer et al 2020), as further discussed in Session 2 on Global Health Governance. The WHO’s traditional position as the directing and coordinating authority in international health has been undermined not only by the emergence of powerful actors such as the World Bank, UNICEF and the Gates Foundation. It is inadequately resourced by donors, who have diverse agendas and significant control of its budget, to meet global health challenges such as infectious disease pandemics. [[Open Question]] [[Is WHO an anti-fragile entity?]] #to-write Why is WHO undermined and underresourced all the time? What does it take for WHO to reclaim its throne? [[Pandemic Fund]] then doesn't answer this concern as it is also led by [[World Bank (WB)]] . However, prominent global health actor such as John Arne Rottingen suggested that WHO should not handle big financial simply because WHO does not have the capacity nor the track record to manage such money. So it's a circle of death. ## 4.6 Remedies? [[innovative financing|innovative fundraising schemes]] have been put forward to address these challenges and the gap between predicted DAH and the needs of LMICs. Some examples are levying international taxes on financial transactions; dedicated taxes on products harmful to health, tobacco, alcohol, food and fossil fuels; and taxing the super-rich. Another source of income would be realised if OECD donor governments live up to their commitments to apportion 0.7% of gross national income for development assistance, which they typically fail to do (Moon and Omole 2017). Whatever monies are made available, however, it is widely agreed that changes in assistance procedures are necessary. This should include creation of mechanisms to direct aid to the poorest and most vulnerable within recipient countries. Dieleman Cowling and Agyepong et al (2019) suggest that possible strategies to achieve this could include ==the use of allocation formulas based on the size of the population living below the poverty line instead of the size of whole population; a stronger focus on subnational areas (states, regions provinces etc) with larger shares of disadvantaged people==; and funding high-impact multisectoral programmes that aim to alleviate poverty. # 5. COVID-19 implications for global health financing Only 10% of COVID-directed funding from global actors was repurposed, i.e. taken from other programs (IHME, 2020). However impressive the response to COVID has been, funding patterns have also mirrored many of the problems of broader global health financing, and the context of its global spread has been described as “one of grave inequality in access to health services” (Micah et al 2021). Of the $13.7 billion targeted at COVID, nearly a quarter (23·5%) of donor resources went to global initiatives including investment in vaccine development and procurement. Allocation of the remaining 75% was directly targeted at single countries or regions. A more obvious problem of the COVID response has been the markedly inequitable vaccine roll-out. At the end of November 2021, 63.9% people in high-income countries had received at least one dose; in low-income countries the figure was only 7.46% (UNDP 2021; Figure 8). In large part, this is due to “vaccine nationalism” which has seen large volumes of vaccines reserved for high-income countries, while other vaccine-producing countries restrict their export to ensure supply for their own citizens, a situation the current UN Secretary-General Antonio Guterres has described as “immoral and stupid” (Towey 2021). # 6. Summary Disbursement of DAH for COVID has, in some ways, echoed some of the main challenges facing global health financing more broadly, particularly funding in relation to regional mortality and the strategies of high-income countries on vaccine acquisition. # 7. References ## 7.1 [[Essential readings]] [[@dielemanG20DevelopmentAssistance2019]] Dieleman JL, Cowling K, Agyepong IA et al The G20 and development assistance for health: historical trends and crucial questions to inform a new era and crucial questions to inform a new era. Lancet 2019; 394:173–83 [[@moonDevelopmentAssistanceHealth2017a]] Moon S, Omole O. Development assistance for health: critiques, proposals and prospects for change. Health Econ Policy Law. 2017 Apr;12(2):207-221. ## 7.2 [[Recommended reading]] #to-read Institute for Health Metrics and Evaluation (IHME). Financing Global Health 2020: The impact of COVID-19. Seattle, WA: IHME, 2021. #to-read [[@bendavidDevelopmentAssistanceHealth]] Bendavid E et al. Development Assistance for Health (Chapt 16). In: Jamison DT et al, editors. Disease Control Priorities: Improving Health and Reducing Poverty. 3rd edition. Washington (DC): The International Bank for Reconstruction and Development / The World Bank; 2017 https://openknowledge.worldbank.org/bitstream/handle/10986/28877/9781464805271.pdf?sequence=2 (available free online)