UNAIDS Economics Reference Group Meeting November 8-9, 2012

Stephen Resch and Robert Hecht

Cross-country comparison of domestic AIDS expenditure and medium-term fiscal space for AIDS programs

Objective

What proportion of AIDS spending is coming from domestic versus external sources?

How much more of the financial burden of AIDS programs could countries reasonably shoulder themselves?

With maximum domestic effort to support AIDS programs, what level of external resources would still be required from external sources such as PEPFAR, Global Fund, etc to meet the overall needs to operate an effective national AIDS program?

How can we monitor implementation of Partnership Frameworks agreements?

Main findings

1. Room for domestic AIDS spending to double or triple in medium term

2. Major work needed to strengthen financial information

NEEDS ESTIMATION

National strategic planning with credible resource needs estimates

EXPENDITURE TRACKING

Development and routine financial tracking to monitor PEPFAR Partnership Framework agreements

Need to improve turnaround time, completeness, comparability of ad hoc expenditure analysis (e.g. NASA, NHA)

3. More work needed to explain variation between countries in resource estimates and AIDS spending per person living with HIV/AIDS (PLWHA)

Scope of study

(1) a retrospective review of AIDS program financing, comparing countries to one another and to selected benchmarks

(2) a forward-looking analysis assessment of the potential for increasing domestic financing of AIDS programs

Twelve original PEPFAR focus countries(Over 50% of global AIDS burden)

Botswana Cote d’Ivoire Ethiopia Kenya Mozambique Namibia

Nigeria South Africa Rwanda Tanzania Uganda Zambia

Domestic AIDS Expenditure

Per PLWHATotal (millions)

Evaluating domestic effort and assessing the potential for ‘fair’ increase in domestic financing of AIDS programs1. Abuja Target for Government Health Expenditure

(and proportional increase in AIDS spending)

2. AIDS Share of Health Spending in proportion to disease burden share (measured in DALYs)

FOUR IMPORTANT CAVEATS:

Government health expenditure (GHE) is not a clean measure of domestically-sourced funding [Domestic Share of GHE ~70% (40-110%)]

Opportunity cost of increased AIDS spending / Cost-effectiveness

Consideration of downstream savings

Disease burden share may decline with ART scale up, while resource need remains

Normative benchmarks

Variation in government health spending levels

Abuja target: GHE/GGE = 15%

Issue: GHE Public Funds for Health (PFH), GHE doesn’t exclude ‘on-budget’ donor aid**

Variation in the size of resource bucket from which AIDS programs are domestically financed

• GHE per capita varies 5-fold among current LICs

• Botswana GHEpc is 2.5 times other 2 UMICs

Abuja

GDP

Which bucket of money is the appropriate reference point for evaluating domestic effort Countries vary widely in the

share of national resources flowing into downstream public resource buckets.

AIDS spending lies primarily in the health sector and could be bound by GHE level

GGE (17-48% GDP)

GHE (5-18% GGE)

GAE(1-26% GHE)What does it say about a country’s AIDS

financing effort if a health ministry allocates a relatively large portion of the health budget to AIDS, but this level of GAE is low relative to GDP, because the health budget is relatively small?

At what level of government are AIDS resource allocations determined?

Variation in government AIDS expenditure (GAE) as a share of health spending …compared to AIDS’ share of disease burden

Countries fall into 3 groups:

Kenya, Uganda & Ethiopia

(70-90%)

Namibia, Botswana, Zambia, South Africa, and Cote d’ Ivoire (29-54%)

Nigeria, Tanzania, Mozambique, Rwanda(5-12%)

Summary Indicators of Domestic Priority for AIDSUNAIDS DALY DIPI and Health Expenditure-based DIPI

Potential for increase fiscal space for AIDSThree scenarios for increasing domestic GAE

Actual = Status Quo, Abuja = (GHE/GGE=15%), DALY Share = GAE/GHE proportional to AIDS DALY share, Abuja & DALY = Maximal domestic contribution

Dom

estic

AID

S sp

endi

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LWH

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Similar countries:ZAM, TZA, RWA, NAM, BWA

Similar countries:UGN

Similar countries:ZAF, NGA, ETH

Countries fell into 3 groups…

Abuja target already met, All opportunity in DALY share only

DALY share target nearly met, All opportunity in Abuja only

Opportunity for both meeting Abuja and DALY share targets

Resource needs estimates

Difficult to assess the reasonableness of this variation

Not simply explained by input price levels (GNI proxy)

Partly explained by the scale or mix of planned activities?

Inaccurate estimation or ‘gaming’?

NSP estimates, adjusted for epidemic size, vary much more than UNAIDS Investment Framework model

Scenarios for Increasing Domestic Effort:Annualized Amounts for 2012-16.

ScenarioGovernment

AIDS Expenditure

UNAIDS: $7.4 B NEEDED NSP: $9.5 B NEEDED

DOMESTIC SHARE

GAP REQUIRING EXTERNAL SUPPORT

DOMESTIC SHARE

GAP REQUIRING EXTERNAL SUPPORT

1. GROWTH $2 B 27% $5.4 21% $7.5

2. ABUJA $3 B 41% $4.4 32% $6.5

3. DALY $4.4 B 59% $3.0 46% $5.1

4. MAX (2+3) $5.2 B 70% $2.2 55% $4.3

Share of AIDS program cost covered with ‘maximum domestic effort’ (Abuja + DALY Share)

Biggest relative increase

Main findings

1. Room for domestic AIDS spending to double or triple in medium term, but need for donor support will remain

2. Major work needed to strengthen financial information

RESOURCE NEEDS ESTIMATION

ROUTINE EXPENDITURE TRACKING

3. More work needed to explain variation between countries in resource estimates and AIDS spending per person living with HIV/AIDS (PLWHA)

THANK YOU

Stephen Resch stephen_resch@harvard.eduCenter for Health Decision ScienceHarvard School of Public Health

Robert Hechtrhecht@resultsfordevelopment.orgResults for Development Institute

and the R4D Team: Richard Skolnik, Toby Kasper, Theresa Ryckman, Gabrielle Partridge, Kira Thorien