Innovative Financing for Health in the Asia-Pacific

Contributors:Cambridge Economic and Policy AssociatesClinton Health Access Initiative

Jenny Liu, PhDMalaria Elimination InitiativeThe Global Health GroupUniversity of California, San Francisco

APLMA Regional Financing for Malaria Task ForceMay 12, 2014

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Donor funding for malaria has declined since 2009• Donor funding for Asia-Pacific countries was 12-21% of the total global

malaria financing from 2006 to 2010, but was only 6% in 2011.

Source: IHME Financing Global Health Database, released 4/2014

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Malaria development assistance across

regions

Change in USD/year in malaria development

assistance (2006-2011)

Malaria programs in the Asia-Pacific are heavily dependent on donor funding• The Global Fund has provided 30% of all country malaria program funding in the

Asia-Pacific from 2006-2010

• Other external donors (mulit- and bilateral) accounted for 32% of all financing• Mainly from the US, UK,

Australia, and Japan

• Domestic governments contributed 38%

• 31% among malaria control countries

• 47% among malaria-eliminating countries

Source: UCSF GHG calculations of data from Pigott et al. (2012)

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Malaria Control Coun-tries

Malaria Eliminating Countries

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Other Ex-ternal Donors

Global Fund

Government

Sources of malaria program financing for Asia Pacific countries (2006-2010)

$429m

$409m

$379m

$304m

$264m

$497m

Substantial gaps in funding exist

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Estimated malaria program costs through 2030 in the Asia-Pacific

1Notes: 2008 GMAP estimate from Malaria 2012 Background paper #2. Cumulate estimates for malaria-eliminating countries are taken from Zelman et al. 2014. Model assumptions differ; please see source documents for model specifications.

Main model assumptions Countries Cost

(US$ billion) Source

Scale-up interventions and sustain malaria control

Afghanistan, Bangladesh, Bhutan, Cambodia, China, India, Indonesia, Laos, Myanmar, Nepal, Pakistan, PNG, Philippines, Solomon Islands, Sri Lanka, Thailand, East Timor, Vanuatu, Vietnam

32.0 2008 GMAP

Eliminate malaria and maintain prevention of reintroduction

Azerbaijan, Bhutan, China, DPRK, Iran, Kyrgyzstan, Malaysia, Philippines, Solomon Islands, South Korea, Sri Lanka, Tajikistan, Thailand, Uzbekistan, Vanuatu, Vietnam

7.6 Zelman et al. 2014

• At least 35% of the total need is projected to be unfunded through 2015, and likely more given GF NFM allocations

Potential impact of the Global Fund NFMExample from the Asia-Pacific malaria-eliminating countries

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The APLMA Regional Trust Fund is vital to sustaining efforts

Warning!

• Malaria program disruptions have led to malaria resurgences

• Cannot afford to reduce efforts, particularly with the risk of spreading artemisinin resistance

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Source: Cohen et al. 2012 Malaria Journal

Malaria elimination is the universal goal• Artemisinin resistance now in 6 areas of the Mekong,

and spreading– Delayed parasite clearance reported in Suriname,

Nigeria, and Kenya– Evidence resistance in Angola

• Within the Mekong, eliminating P. falciparum is the answer to artemisinin resistance

• Elimination is the collective goal of countries outside the Mekong

• Two vanguards in this effort:

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Asia Pacific Malaria Elimination Network

• 15 countries with a goal of national or sub-national elimination

• 30 partner institutions relevant to elimination

• Country-led, country-driven – direction & annual work plans

• Objectives: Information-sharing, capacity building, building the evidence base for elimination, and advocacy

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Role for the Regional Trust Fund

1. Support countries unable to fund their own programs– Especially important for countries whose GF support will decline

2. Incentivize countries nearing elimination to maintain/accelerate efforts– E.g. reducing cross-border risk, technical assistance, eliminating Pf in

resistance countries3. Finance activities that produce regional public goods

– Diagnostic tools, surveillance, data of decision making, collaboration across sectors and countries, quality of pharmaceuticals, HR capacity building, operational research

4. Fund assessment of health impacts and risk mitigation– Need to measure progress– Generate evidence to demonstrate ROI

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Sources of financeFundraising instruments• Market financing / debt raising mechanisms:

IFFImSocial impact or pay for performance

bonds – e.g. proposed malaria bond in Mozambique

• Debt / credit conversion mechanisms: Debt2HealthPerformance-based credit buy-down

• Endowment Funds: Gates Foundation, Rockefeller endowments

• International earmarked taxes and levies: UNITAID

• Regional funds:Malaria Control Fund of the Gulf

Cooperation Council Central Asian Countries Initiative for Land Management

Sustainability is key to the Trust Fund

• Private sector resources:Corporate social responsibilityProfit-sharing mechanisms: Product RED

campaign Public-Private Partnerships – global

funding mechanisms such as the Emerging Africa Infrastructure Fund

• Major foundations and other philanthropic funding: Gates Foundation, Rockefeller, Rotary

• Emerging government donors: BRICs, East Asian countries including South Korea, Brunei and Malaysia.

• Voluntary contributions: lotteries, mobile phone solidarity contributions

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Applicability of mechanisms to malaria elimination Financing mechanism Scale

Predictability

Sustainability

Additionality

Transaction costs

Applicability score and comments

New approaches to fundraisingMarket financing/ debt-raising mechanisms

High Applicable – greater potential where more developed fin. markets

Debt-conversion mechanisms Not applicable – low debt for eliminating

countriesEndowment funds High Applicable – large upfront investment neededInternational earmarked taxes High Marginally applicable – preferred at national

level Regional funds Applicable – provide an opportunity to fund

cross-border activities. New sources of fundraising

Private sector X X X Applicable – resources from specific industries (tourism, water management)

Major foundations and philanthropy Applicable – resources at both global and

national levelEmerging government donors

Applicable Represent untapped and important source of funding, especially for regional financing.

Voluntary contributions X High Marginally applicable – limited experience to

date

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Structural considerations• Funding mechanism features

– All countries should be able to access the fund, not just high burden countries

– Align timing with national budget cycle – Government, CSO, and private sector should be eligible to be

recipients• Accountability features

– Results-based– Independent M&E system– Leverage ADB’s capacity and credibility, particularly for countries

with less domestic capacity to manage funds

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A COD contract is an agreement between a donor and a recipient country where the country will receive a financial award for achievement of a pre-agreed indicator of progress.

• Currently being piloted by Global Fund in health and DFID in education

• Could eliminate complex grant indicators and intensely focus on impact towards elimination

Key Features of COD

Improved Outcomes: Countries are incentivized to maximize results – optimizing impact, rather than input

Increased Efficiency: COD rewards depend only upon independently verified outcomes, eliminating the transaction costs of interim reporting

Country Ownership: COD funding is unrestricted and a country must decide how to spent it, increasing programmatic ownership

Low Donor Risk: Payment is only made upon performance, maximizing value-for-money

Cash-on-delivery (COD) is well-suited for accelerating Pf elimination in the Mekong and regionally

The Global Fund has designed its first COD grant in Central America for malaria elimination

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• In Year 1, all countries receive start-up money to improve surveillance systems

• In Year 2 and 3, successful countries receive $600k reimbursement for any government malaria expense from previous year

The Model

Indicator

Local Cases of Malaria- Singular indicator in WHO

definition of elimination- Uses country systems- Unites region around

common goal

Reward Payout

$600,000- Per country, per year

- Calculated by dividing funds across two years for all countries

The Grant - $10M for Malaria• “Eliminacion de la Malaria en Mesoamerica y la

Hispaniola”• Panama, Costa Rica, Nicaragua, Honduras, El

Salvador, Guatemala, Belize, Haiti & Dom. Republic

Quality Assurance• The PR’s main role is to verify results (annually)• Analyzes accuracy of data, and potential for

fraud/misrepresentation

Measuring progress in the Asia Pacific

• Choose simple indicators:– Many countries already use cases as a

metric to measure program performance

– Others could be considered for different phases (e.g. China’s 1-3-7)

• COD grants could use existing measurement systems, but would require an external verification

• In a regional scheme, these data could be shared to help border states better react to outbreaks in neighboring countries

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Conduct case investigation, confirm case by double microscopy & PCR,

classify as imported vs. local

Within 3 days

Within 7 daysConduct focus investigation, reactive case detection, IRS,

health education

Within 1 dayAll suspected fever cases

laboratory/ clinically diagnosed and reported

China’s 1-3-7 strategy for surveillance and response

Source: Cao et al. 2015 PlosMed

Priority considerations

• Clear focus for immediate future: malaria elimination is necessary for combatting artemisinin resistance

• Expanding the resource pool: need convincing business case for why the trust fund is interesting for (1) traditional donors, (2) emerging donors, and (3) private sector businesses and foundations

• Prioritizing disbursements: Stop-gap funding for “crisis” countries to sustain program efforts

• Clear messaging and speed: to instill confidence and buy-in from member countries

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