Critics of performance-based financing suggest that it may be a fad of external funders, with limited potential to improve service delivery. Most critics view it solely as a provider payment mechanism. The authors of this article argue that performance-based financing can catalyse comprehensive reforms and help address structural problems of public health services, such as low responsiveness, inefficiency and inequity. The emergence of performance-based financing in Africa may profoundly transform the public sectors of the low-income countries in the region. However, the authors caution on the limits to performance-based financing, particularly as some dimensions of performance are difficult to measure and, therefore, to remunerate. More classical support and mechanisms will remain crucial for strengthening health systems in low-income countries.
Resource allocation and health financing
The authors of this paper reviewed aid to health and borrowing from the International Monetary Fund (IMF) between 1996 and 2006. They found that, on average, for each US$1 of development assistance for health, only about $0.37 is added to the health system. In their comparison of IMF-borrowing versus non-IMF-borrowing countries, non-borrowers add about $0.45 whereas borrowers add less than $0.01 to the health system. Health system spending grew at about half the speed when countries were exposed to the IMF than when they were not.
At the opening of the World Health Organization’s (WHO) Executive Board meeting, held from 17–25 January 2011, there were calls for reform amid concerns about WHO’s finances for the year ahead. WHO Director-General, Margaret Chan, said that the United Nations agency is stretched thin due to a high level of demand impacting its efficiency in some areas, and that far-reaching reform is needed. She also warned against big corporations’ influence on policies, in her response to dissension over a pharmaceutical industry representative named by the WHO secretariat to join a new research and development funding working group. In her opening remarks, Chan underlined the financial shortfall of the WHO, which some later said could range between US$200 and $600 million dollars in the biennium.
Economic collapse in Swaziland, exacerbated by a major decline in revenue from the Southern African Customs Union (SACU), has cast uncertainty over financing the national HIV and AIDS response. According to the Ministry of Economic Planning and Development, revenue from SACU contributed 76% of the Swazi government's income in 2009 but dropped in 2010 and is expected to continue declining over the next decade. The decline in SACU tariffs and revenue collection has been identified as part of a policy shift towards freer trade within the southern African region and it is likely to continue. The National Emergency Response Council on HIV/AIDS (NERCHA) has blamed the situation on years of government overspending and the International Monetary Fund has urged the government to downsize the civil service by almost a third. Swaziland is heavily dependent on foreign donors to finance its HIV and AIDS programmes and doubts have been expressed that external funders might fill the gap left by an increasingly insolvent government. Meanwhile, the government assures that health services will not be cut, although long-term financing remains uncertain and there are concerns that no funds will remain to expand HIV and AIDS services.
Global Fund spokesman Jon Liden said it is not exceptional for proposals to be rejected, adding that Zimbabwe has enough funds coming from the organization to keep its programs going. Health experts said Monday that Zimbabwe’s gains in the fight against HIV/AIDS could be eroded if the Global Fund to fight AIDS, Tuberculosis and Malaria adopts a decision by its technical review panel not to fund Zimbabwe’s Round 10 proposal.A spokesperson for the Global Fund confirmed the technical panel had not recommended funding of the country’s latest HIV and TB grant requests. But Jon Liden said it is not unusual for proposals to be rejected, adding that Zimbabwe has enough funds coming from the organization to keep its programs going. Coordinator Gilles Van Cutsen of the medical relief group Doctors Without Borders said the Global Fund should reconsider its decision. Cutsen told VOA Studio 7 reporter Sandra Nyaira that the failure to recommend funding of the proposal is a disaster for Zimbabwe, noting that other countries in the region such as Lesotho and Mozambique have also seen their latest bids rejected. Programs manager Raymond Yekeye of the National Aids Council said Zimbabwe must look to other sources for funding to ensure gains are not rolled back.
The Global Fund to Fight HIV, Tuberculosis (TB) and Malaria has rejected Zimbabwe’s application for US$220 million to finance HIV and TB programmes for 2011, threatening to derail progress achieved so far towards efforts containing the two diseases. The Global Fund did not give reasons for the rejection. Zimbabwe had applied for US$170 million for HIV and US$50 million for TB. National Aids Council chief executive, Dr Tapiwa Magure, described the development as devastating, and doubted that Zimbabwe would be able to attain the Millennium Development Goal of universal access to treatment. Zimbabwe’s adult HIV prevalence has been on a downward trend, dropping from 18.1% in 2006 to 13.7% in 2009. Yet, according to the government, about 343,600 adults and 35,200 children under 15 years urgently need anti-retroviral (ARV) treatment out of a total of 1.2 million Zimbabweans living with HIV and AIDS. The government’s anti-retroviral programme only caters for about 200,000 infected people, while an estimated 3,000 people die of AIDS-related illnesses every week.
Microfinance among people living with HIV and AIDS (PLWHAs) faces some opposition and remains understudied. This literature review examines microfinance’s evolution and impact on a variety of social and health indicators and its emerging implementation as a primary prevention tool for HIV and economic intervention for PLWHAs. There is an abundance of literature supporting the apparent utility of microfinance. However the author argues that understanding of the subject remains clouded by the heterogeneity and methodological limitations of existing impact studies, the still limited access to microfinance in this population and inadequate understanding of the specific challenges posed by the socioeconomic and health issues of PLWHA. The author concludes that carefully designed studies are needed to assess the role of microfinance for PLWHA.
In its annual World Health Report, the World Health Organization (WHO) shows how all countries, rich and poor, can adjust their health financing mechanisms so more people get the health care they need. It highlights three key areas where change can happen – raising more funds for health, raising money more fairly, and spending it more efficiently. WHO says that in many cases, governments can allocate more money for health. In 2000, African heads of State committed to spend 15% of government funds on health, a goal that three countries – Liberia, Rwanda and Tanzania – have already achieved. If the governments of the world’s 49 poorest countries each allocated 15% of state spending to health, they could raise an additional $15 billion per year – almost doubling the funds available, notes the report. Countries can also generate more money for health through more efficient tax collection, and find new sources of tax revenue, such as sales taxes and currency transactions. A review of 22 low-income countries shows that they could between them raise $1.42 billion through a 50% increase in tobacco tax. The report also cites the role of the international community, noting that most donors still need to allocate 0.7% gross domestic product (GDP) to official development assistance. Smarter spending could also boost global health coverage anywhere between 20-40%, the report points out, highlighting 10 areas where greater efficiencies are possible, including the use of generic drugs wherever possible – a strategy that saved almost US$2 billion in 2008.
What is the relevance of the aid commitments embodied in the Paris Declaration on Aid Effectiveness (2005) and the Accra Agenda for Action (2008) to development actors in South-South co-operation? While research on South-South co-operation is increasing, this article notes that it appears to be largely focused on financial flows or on a limited number of emerging economies, but not on the experiences of practitioners of South-South (SS) co-operation themselves. The article offers two reasons why aid matters for SS partners. First, aid effectiveness is important for partner countries. The effectiveness commitments embodied in the Paris Declaration and the Accra Agenda for Action have failed to promote behavior change, for example, in increasing the use of country systems and in making aid more predictable. One possible solution is the internationally recognised Survey on Monitoring the Paris Declaration, which tracks the implementation of the Paris commitments. Second, development actors need to go beyond the conventional ‘donor-recipient’ relationship, especially as the development co-operation architecture is becoming more diversified and complex. The Accra Agenda for Action in 2008 opened the door to encourage an inclusive and effective development partnership with civil society, parliamentarians, private sector, providers of South-South co-operation, foundations and global programmes. More actors are taking ownership of the aid effectiveness agenda by shaping it with their own views and experiences. One such example is the Dili Declaration (April 2010), in which a group of fragile states, including the Democratic Republic of Congo, have adapted aid effectiveness principles to their situations of national conflict and fragility.
This report aims to call health leaders’ attention to the importance and feasibility of establishing the systems and institutions needed to pursue universal health coverage (UHC). It also seeks to quantify the transition costs associated with reforming a health system away from one that relies on out-of-pocket payments and towards one in which health expenditures are more evenly distributed and that can supply UHC. Although models for UHC vary by country, governments are re-organising national health systems to share health costs more equitably across the population and its life cycle, instead of concentrating the burden on the few who face catastrophic illness in any given year. Using examples from four countries that have made tremendous strides toward achieving universal coverage, including Rwanda, the report puts an approximate price tag on these investments. It concludes that relatively small early investments can set countries on the path toward UHC.