At the 16th International Conference on AIDS and Sexually Transmitted Infections in Africa (ICASA), held in December 2011 in Ethiopia, the Global Fund announced that it has put transitional funding mechanisms in place to ensure continued treatment for people living with HIV and AIDS. The mechanisms will bridge funding gaps that may arise following delayed payments by those who had pledged contributions to the Fund. In November 2011 the Fund adopted exceptional measures to suspend Round 11 but denied that the Fund is in financial trouble, arguing that only one of its funders has announced a decrease in funding. It identified the main problem as delayed payments. According to United States president, Barack Obama, the Fund remains on track to support more than US$8 billion in grant renewals and new grant commitments between 2011 and the end of 2013. The Fund is undergoing reforms to allow it to transition to a more flexible, sustainable and predictable funding model that will ensure that resources go to high-impact interventions and to people who need the help most. The Board has also taken steps to better target Global Fund resources on countries with the greatest need and least ability to pay. The article indicates that this means that at least 55% of Fund resources will be directed to low-income countries.
Resource allocation and health financing
Speaking at the opening of the national consultative health forum’s National Health Insurance (NHI) conference on 7 December 2011, Organisation for Economic Co-operation and Development economist Ankit Kumar said South Africa should look to South Korea, which achieved universal health care for its entire population in just 12 years by investing in a strong primary healthcare system, eliminating fragmentation and containing hospital prices. South Koreans achieved universal coverage by starting the rollout of health insurance with the informal labour market before gradually expanding coverage to the formal labour market. In preparation for the roll out of South Africa’s NHI, the country’s Health Minister, Aaron Motsoaledi, reiterated his call for the establishment of a pricing commission to tackle uncontrolled commercialism and the exorbitant cost of private healthcare. Fragmentation in the form of private health care for the wealthy and public health care for the poor was also contributing to low levels of access to health care, he added.
This study focuses on two main areas, namely aid agency effectiveness (cost effectiveness of agencies) and aid policy effectiveness (the cost of parallel development policy making). Whereas other areas of the Paris agenda are equally important (like ownership, mutual accountability, and a focus on results), this study explored the costs, and put a price-tag on not implementing the Paris agenda. The study reviewed the aid effectiveness literature to date, most of which point to benefits of coordination. The European Commission found direct savings for the European Union (EU) through lower administrative costs from harmonising, from reducing the number of partner countries, changing the aid modality towards Budget Support (general or sectoral), untying aid and eliminating aid volatility. The total efficiency gains were estimated at € 5 billion per year.
In 2001, the World Health Organisation’s Commission for Macroeconomics and Health (CMH) released its report, ‘Macroeconomics and Health: Investing in health for economic development’, urging the international community to invest substantially in health as a means of promoting development. According to this article, many observers credit the report as one of the key drivers for successfully raising the profile of global health in the international arena and promoting the long-neglected link between health and wealth. But reports on the success of the Commission are mixed. Howard Stein of the University of Michigan criticises the Commission for failing to mention the causes of poverty and poor health, including the gross inequities of the global economy caused by neoliberalism, suggesting that this is a consequence of the fact that most Commission members supported neoliberal economic policies at the time. Although at least 60 countries now offer a basic health care package, the concept failed to be supported by external funders, who continue to fund specific vertical interventions rather than an integral set of services. The Commission expected the pharmaceutical industry to voluntarily lower prices, which the authors argue has not happened.
The district hospital has been considered a critical avenue for the delivery of child-saving interventions. It has been suggested that improving the performance of district hospitals would reduce child mortality by 3-30% in the areas they serve. It has however been
shown that the quality of care delivered in these hospitals in Kenya is inadequate. To improve the quality of care of children admitted in district hospitals in Kenya, the study developed clinical guidelines
in selected district hospitals. The guidelines were linked with health
worker training, job aids, follow-up and supervision and performance feedback termed the 'Emergency Triage and Treatment Plus (ETAT+) strategy. The strategy improved the quality of care of children admitted in hospitals by 25%. The total cost of scaling up the intervention was calculated at about US$ 3.6 million, estimated to be only 0.6% of the annual child health budget in Kenya. The ETAT+ strategy is argued to be cost-effective in improving the quality of care of children admitted in hospitals in Kenya.
The global financial transaction tax (FTT) is a key proposal that civil society campaigned for at the G20 Cannes Summit, hosted in Cannes, France, from 3-4 November 2011. It has the potential to raise billions of dollars to support social justice goals – estimates of the amount that FTT could generate range from about US$50 billion to as much as $250 billion if a wide range of transactions are included. The author identifies seven global taxes that could be included as ‘further transactions’. 1. A tax of 5% on First and Business class air tickets already funds UNITAID, and raises US$200 million annually – if generalised, it could raise $8 billion globally. 2. A tax on polluting activities, amounting $20-25 for every ton of CO2 would raise $300 billion, while taxation of air and sea international transportation could raise US$40 billion. 3. An additional tax on top of national taxes on transnational societies would eliminate tax havens and would turn these companies into global tax payers, thereby raising $100 billion. 4. A tax on arm sales could garner US$30 billion a year. 5. A tax on capital profits could amount to US$50 billion if it was generalised, if it covered all tax havens and if it was controlled. 6. The tax on currency exchange transactions limited to a rate of 0.005%, and applied to principal currency exchange markets (US$, pound and yen) would generate at least US$33 billion – if increased to 0.1%, this tax would raise $150-300 billion, as well as becoming an efficient instrument against rampant speculation. 7. A tax of $0.05 on every pack of cigarettes in rich countries (and of $0.01 in poorest countries) would raise an additional $7.7 billion.
This paper presents the first comprehensive analysis of the distribution of health care financing in relation to ability to pay in Ghana. Secondary data from the Ghana Living Standard Survey (GLSS) 2005/2006 were used, triangulated with data from the Ministry of Finance and other relevant sources, and further complemented with primary household data collected in six districts. Results showed that Ghana's health care financing system is generally progressive. The progressivity of health financing is driven largely by the overall progressivity of taxes, which account for close to 50% of health care funding. The national health insurance (NHI) levy (part of VAT) is mildly progressive and formal sector NHI payroll deductions are also progressive. However, informal sector NHI contributions were found to be regressive. Out-of-pocket payments, which account for 45% of funding, are regressive form of health payment to households. For Ghana to attain adequate financial risk protection and ultimately achieve universal coverage, it needs to extend pre-payment cover to all in the informal sector, possibly through funding their contributions entirely from tax, and address other issues affecting the expansion of the National Health Insurance. Furthermore, the pre-payment funding pool for health care needs to grow so budgetary allocation to the health sector can be enhanced.
Tiered pricing - the concept of selling drugs and vaccines in developing countries at prices systematically lower than in industrialised countries - has received widespread global support as a way to improve access to medicines for the poor. Researchers in this study carried out case studies based on a review of international drug price developments for antiretrovirals, artemisinin combination therapies, drug-resistant tuberculosis medicines, liposomal amphotericin B (for visceral leishmaniasis), and pneumococcal vaccines. They found several critical shortcomings to tiered pricing: it is inferior to competition for achieving the lowest sustainable prices; it often involves arbitrary divisions between markets and/or countries, which can lead to very high prices for middle-income markets; and it leaves a disproportionate amount of decision-making power in the hands of sellers rather than consumers. In many developing countries, resources are often stretched so tight that affordability can only be approached by selling medicines at or near the cost of production. Policies that ‘de-link’ the financing of research and development from the price of medicines merit further attention, the authors argue, since they can reward innovation while exploiting robust competition in production to generate the lowest sustainable prices.
The advent of South Africa’s National Health Insurance (NHI) scheme opens up a political space to campaign for a health service that will best address South Africa’s health crisis and reduce the extreme inequities between poor and rich, rural and urban, and public sector and private health service users. The authors argue that such a campaign must counter powerful groups with vested interests who portray public systems as inefficient and second-best, and see the NHI as an opportunity to preserve a private health system (which is innately inequitable because of the need to profit from disease). They further argue that the NHI will not only render health care more accessible and equitable, but also create many more jobs and indirectly improve health by reducing the prevalence and depth of poverty. Rationalisation, standardisation and expansion of the skills of community-based care workers is urgently needed, as is improvement of their insecure employment conditions. The proposed ‘Re-engineering of Primary Health Care’ initiative puts forward a healthcare model that is similar to Brazil’s successful Family Health Programme, and would be substantially cheaper than the current private sector model, and more cost-effective than the current hospital-dominated public sector.
The financial transaction tax (FTT) proposed by France and Germany and due to be discussed in the November G20 Summit, could help save millions of lives if a percentage were allocated to global health, according to an issue brief released today by the international medical humanitarian organisation Medecins Sans Frontieres (MSF). MSF’s issue brief, Five Lives, outlines through five personal stories the transformative impact an FTT allocation to global health could have. The report looks at interventions that can prevent a child from becoming severely malnourished to begin with; protect children from deadly measles outbreaks; prevent a baby from acquiring HIV through childbirth; get people on life-saving tuberculosis treatment sooner; and save lives while dramatically reducing the spread of HIV through treatment. It is estimated the funds raised by an EU FTT could reach 55 billion euros per year. Even a portion of that sum would be a significant boost to tackling global health crises.