1

Global Health Aid:

What’s Ahead?

David de Ferranti

Outline

Health aid and its architecture: where are we headed?

Will health aid do a better job of strengthening country institutional settings?

2

Why East Asia countries might care aboutwhat is happening in global health aid

Aid and “the aid dialogue” are a source of:

• Financial support

• Ideas

• Experience from other parts of the world

• Initiatives and advocacy – on new priorities

And these can have implications for countries

• Help or hinder local efforts

• Absorptive capacity concerns

• Fragmentation, efficiency, other

3

Health aid has increased

0

2

4

6

8

10

2001 2002 2003 2004 2005 2006

Bill

ions

of U

SD

BilateralCommitments

GF/GAVICommitments

World BankCommitments

BilateralDisbursements

GF/GAVIDisbursements

… and shifting to recurrent cost financing for communicable disease control

Source: Lane and Glassman 2007

… and has gotten more complicated!

Private Capital

UN Agencies ( WHO & others)

Bilateral Agencies

Official Development Assistance

Public Providers Private Providers

Public Health & Community Health

Individual Preventive Public Health Interventions

Data, Health Education, Environmental Health

Ministry

Finance

Ministry of

Health

Social Security

Health Service Delivery

Health Financing

PO

PU

LA

TIO

N

Individual Health Interventions,

Acute & Chronic Care

Health Strategy

Out-of-Pocket Payments

Private Payments

Insurance

Public Providers

Debt Buy-back

IFFIm

Airline Tax

GAVI

UNITAID

Global Fund

AMC

Buy-downs, co-financing

Global Health Partnerships

Product (RED)

Other Gov.

International Philanthropy

Multilateral Banks

Volatilty unpredictable funding levels

Rwanda: Government and Aid Health Financing, 1997-2006

0

4,000

8,000

12,000

16,000

20,000

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

Source: Rw anda, Ministere de la Sante Rapport Annuel 2006

Milli

ons

of R

wan

dan

fran

cs, 2

000

pric

es Government

Development Aid

7

Changes are afootThe new players are still expanding. And changing.

Gates and other new philanthropies

Global Fund, GAVI, and other disease-focused initiatives

Others (Media stars, wealthy individuals, the BRICs, …)

The traditional players are trying new ideasEuropean bilaterals (DfID, France, Nordics, …)

US assistance (USAID, MCC, State, PEPFAR, etc.)

World Bank and regional multilaterals

BINGOs, LNGOs, FBOs, private health providers

Other (IMF, overall aid strategies, recipient governments)

The global environment is worsening

US economy and “the crisis from the north”

8

X years from now …How will today’s tensions have evolved?

Vertical programs vs. health systems

Country-driven vs. donor-driven

Performance-based vs. input-focused

General support vs. project-oriented

Public vs. private roles in health

The trans-Atlantic divide

How will tomorrow’s trends have unfolded?Epidemics and pandemics – old and new

New products, technology, and financial tools

9

X years from now … (continued)Will the global health architecture have changed radically?

By default rather than by design?

Will support (public, political) for aid have weakened?

Impact of new generations of voters? Is a funding “cliff” coming?

Will the new players have achieved results?Or changed the debate?

Or foundered on unrealistic expectations?

Or changed their own views of what is needed and what works?

Will the traditional players have changed?Will aid be just IDA-type funding plus IFC-type support?

Will there be enough money to meet the priority needs?

10

The Great “Money Gap” Debate

UNAIDS says $55.1 bn is needed for 2006 - 2008 for HIV/AIDS

Funding gap: $6 bn in 2006 and $8.1 bn in 2007 1

GAVI: $35 bn to immunize 27 mn children by 2015

Funding gap: $11-15 bn 2

StopTB: $56.1 bn over 10 years

Funding gap: $30.8 bn 3

Maternal and Neonatal Health and Child Survival: $9 - 16 bn/yr

Funding gap: $5 bn/yr

Roll Back Malaria: $3.4 bn/yr

Funding gap: $2.7 bn/yr 4

1 Report on the Global Aids Epidemic. Geneva: Joint United Nations Programme on HIV/AIDS, 2006.2 Albright, Alice. "Innovative Financing for Global Health." The Brookings Institution, Washington. 26 July 2006.Lob-Levyt, Julian. "Progress & Phase 2." 3rd GAVI Partners' Meeting, New Delhi. 8 December 2006.3 Stop TB Partnership. Actions for Life: The Global Plan to Stop TB 2006-2015. Geneva: World Health Organization, 2006.4 WHO. "Who | Malaria". Geneva, 2006. World Health Organization. <http://www.who.int/mediacentre/events/2006/g8summit/malaria/en/index.html>.

11

The Great “Money Gap” Debate (continued)

Adding it all up:

From World Bank for health-related MDG gap

$25 - 70 bn/yr (0.08 – 0.21% of global GDP)

From Commission on Macroeconomics and Health, WHO:

$40 - 52 bn/yr (0.08 – 0.12% of GDP)

From summing selected disease/intervention-specific estimates:$30 - 50 bn/yr (0.10 – 0.15% of GDP)

From Copenhagen consensus estimate of WDR 1993 package$337 bn/yr (1% of GDP)

12

The Great “Money Gap” Debate (concluded)

$25 to $50 bn/yr is small compared to:Total health spending worldwide: $3,198 bn/yr1

Global military spending: $1,118 bn in 20052

Global corporate net profits: Exxon/Mobile alone earned $36 bn in 2005

Total capital in global financial markets: $118,000 bn (a stock, not a flow)3

But large compared to:Total current development aid for health: over $11.4 bn/yr (IMF/WB, 2004)

Total current ODA for all purposes: $80 bn/yr (OECD, 2004)

Total current health spending in recipient countries: $350 bn/yr1

And would be needed for a very long time

So …this is too big to solve by aid and philanthropy alone

1 Gottret, P. and George Schieber. 2006. Health Financing Revisited: A Practitioner’s Guide. Washington, DC: IBRD/World Bank.2 Stockholm International Peace Research Institute, 2006 3 McKinsey Global Institute, 2005

Strengthening Country Institutional Settings

What is it?

• Strengthening institutions such as• Laws and regulatory regime• Health workforce talent pool and incentives• Management systems• Transparency, governance

• Similar to “enabling environment” and “investment climate” concepts in macro policy?

Not the same as:

• Capacity building

• Traditional technical assistance

13

Prospects for Improving Aid EffectivenessAnd Its Impact on Country Institutional Settings

What to expect from the new initiatives that promote:• Greater strategic coherence (IHP++, etc.)

• Harmonization and alignment (Paris, Rome, etc.)

• Results-based aid (Norway, etc.)

• Pooling of aid (budget support, SWAps, etc.)

• Better use of traditional tools (e.g., technical assistance)

• Strengthening health systems

And from new efforts to:• Strengthen incentives and institutions

• Attack demand and supply side constraints simultaneously

14

Why East Asia countries might care aboutwhat is happening in global health aid:

REVISITED

Aid and “the aid dialogue” are a source of:

• Financial support: RECENT INCREASES COULD BE IMPORTANT FOR A FEW COUNTRIES BUT NOT FOR MANY. RISKS OF FUTURE DECLINES?

• Ideas: MUCH FERMENT. HOW USEFUL???

• Experience from other parts of the world: A LOT TO LEARN FROM NOW. MORE COMING.

• Initiatives and advocacy – on new priorities: MANY NEW EFFORTS. THEIR VALUE STILL UNCLEAR

15

Why East Asia countries might care aboutwhat is happening in global health aid:

REVISITED (continued)

And these can have implications for countries

• Help or hinder local efforts:• CHOOSE CAREFULLY – WHICH GLOBAL

INITIATIVESTO PARTICIPATE IN AND WHICH NOT.

• Absorptive capacity, fragmentation, efficiency, other:• PUSH BACK – TAKE CHARGE – WHEN

DEALING WITH DONORS. MAKE “COUNTRY-DRIVEN” A REALITY.

• EVEN WITH THE WORLD BANK!

16

17

End

18

Other Money Problems Within Countries

0% 20% 40% 60% 80% 100%

High Income

Upper MiddleIncome

Lower MiddleIncome

Low Income

Private: out of pocket Private: pooled Public

Source: WHO National Health Accounts, updated 2002.

19

Low- and Middle-Income Countries

High-Income Countries

High-Income Countries

Low- and Middle-Income Countries

Global Health Spending

Global Disease Burden

Source: Gottret, P. and G. Schieber. 2006. “Health Financing Revisited.” World Bank.

Volatile revenue flows Average absolute percentage deviation from trend 1996-2005

US$ per capita data for 59 countries. Excludes micro states, countries where health aid < 10 percent of govt. spending. Source WHO.

Trend: Hodrick-Prescott filter; Source: Lane and Glassman 2007

0

5

10

15

20

25

Government Spending on Health Health Aid

Pe

rce

nt

21

Options for ChangeAccelerate efforts to …

Help countries move toward stronger health systems

Based on more effective built-in incentives for better performance

Develop powerful new interventions

Cost-effective vaccines, programs, financing strategies, etc.

Improve uptake of existing interventions (new or neglected)Requires focus on country health systems

Get more impact fromSuccess stories – from innovative country programs Bridging divides between leaders and ideasEvaluation of experience

Press key players (WB, WHO) to do betterNew initiatives should add valueNew initiatives should be active constituents holding main players accountable, not competitors

22

Four inter-linked initiativesProject on Innovative Financing

IFFIm, airline tax, advance market commitment

Private sector: their role and investment

Task Force on Health Financing

Mary Robinson, Julio Frenk, Ngozi Okonjo, etc.

Within-country and aid-flow issues

Programs on Improving Implementation

Focus on governance, corruption, transparency, accountability

Private sector risk-pooling in Africa

Dutch government support

Country Health Aid and Spending Volatility 96-05LOW HIGH

LOW

Niger, Mozambique, Central African Republic, Bolivia, Jordan, Bangladesh, Mauritania, Eritrea, Djibouti

Nigeria, Chad, Trinidad & Tobago, Benin, Swaziland, Lao, Mongolia, Comoros, Tajikistan, Kyrgyzstan, Ethiopia, Bhutan, Cameroon, Papua New Guinea, Buruundi, Timor Leste, Tanzania, Romania, Zambia, Senegal, Gambia, Yemen, Cape Verde, Cote d'Ivoire, Sudan, Ghana, Namibia, Cambodia, Sierra Leone, Uganda, Haiti, Malawi, Honduras, Burkina Faso, Nicaragua, Togo, Mali

HIGH

Guinea, Guinea Bissau, Madagascar

Somalia, Iraq, Afghanistan, Angola, Eq. Guinea, Liberia, Myanmar, Georgia, Zimbabwe, Armenia, Rwanda, Nepal, Dem. Rep. Congo

Health aid volatility

Gov

ernm

ent

heal

th s

pend

ing

vola

tility

High/Low Threshold: 12 percent avg. deviation from trend.

Post conflict &

other fragile states

Typical health aid

dependent country

Developing countries that experience high aid volatility tend to be those that are most dependent on aid and aid dependency is growing