Innovative Financing Mechanisms for Global Health

This blog was written by Rachel Sellstone, a Global Health Policy Research Intern at CSIS and GlobeMed Alumni. It summarizes Panel 2 from the GHLS 2015 Symposium titled Financing Health in the SDGs: What Does it Take to Open a Closed Universe of Funding?

GHLS 2015 Panel 2: Financing Health in the SDGs: What Does it Take to Open a Closed Universe of Funding?

GHLS 2015 Panel 2: Financing Health in the SDGs: What Does it Take to Open a Closed Universe of Funding?

As we turn to the SDG era, discussions around innovative financing mechanisms for global health are becoming increasingly important. As bilateral donors seek to engage developing countries in a more active role in achieving greater health outcomes, creative approaches at domestic resource mobilization are vital. At the Global Health Landscape Symposium hosted by Global Health Council, panelists on the “Financing Health in the SDGs: What Does it Take to Open a Closed Universe of Funding?” proposed a variety of approaches that governmental programs and non-state actors alike are piloting in order to move away from traditional development assistance and towards integrated, sustainable financing mechanisms for the successful attainment of the SDGs. Below are three major takeaways for implementers, advocates and other stakeholders from the panel.

1) Experts Agree: innovation is important and exciting.

All of the panelists offered ideas of ways that both the US government and non-state donors can, and currently are, fostering innovation in global health financing. One that has seen particular success as of late has been the Global Financing Facility. Tiaji Salaam-Blyther of the Congressional Research Service used the GFF as an example for how the US Government and other donors are integrating multiple innovative financing mechanisms for achieving important health outcomes—in this case, in the area of Maternal and Child Health. Domestic Resource Mobilization is core to the ideology behind the GFF; stemming from, according to Salaam-Blyther, a realization that too much ODA actually can be a bad thing—that is, that some Ministries of Finance were seen to actually be slashing their own health-related budgets because they could rely more on foreign aid. The GFF promotes Domestic Resource Mobilization by employing a results-based financing model, where additional foreign assistance is conditional on domestic governments providing a certain amount of services first. As Salaam-Blyther simplified in her incredibly clear explanation of this model, the donor is saying to recipient governments, “If you achieve A, B, and C, I’ll give you X, Y, and Z.” The U.S. is incredibly optimistic about this strategy, with Secretary Kerry personally promoting the pilot effort, and it remains to be seen if the 63.5 USD (over 3 years) that is currently being provided by PEPFAR—with the goal of generating a billion dollars in revenue—will be scaled up in the future.

Salaam-Blyther’s colleagues from the private sector shared her optimism. Andy Wilson of the Abbott Fund astutely pointed out that just 5 years ago, you would be hard-pressed to find a room of Global Health experts so intently discussing domestic resource mobilization. In its 15-year long relationship with the Tanzanian government, Abbott Fund has found that partnering to develop new external auditing systems and Monitoring & Evaluation guidelines fostered innovation and efficiency in public hospitals. Ambassador John Simon of Total Impact Capital highlighted that point. For him, an inefficiency is that often times, the private sector does not realize how burdening the high cost of healthcare can be for both employees and consumers.  Donors can disrupt this cycle of inefficiency, in turn providing higher quality, more accessible care, just by providing their funds in an innovative way. One non-traditional idea he provided: moving payments for healthcare services to a mobile app platform.

2) Context and Integration Matter

 Questions from the audience

Questions from the audience

As a longtime senior civil servant to DFID, Simon Bland, the Director of the UNAIDS New York office, acted as the panel’s expert voice on integration. His comments seemed framed in an effort to remind all of us in the room that these creative, at times convoluted, financing mechanisms are coming from a place of real vision. That vision is the attainment of the Sustainable Development Goals. The SDGs build on the MDGs in many ways, but perhaps the most important way is their particular focus on those who were left behind in the MDG era. With that in mind, Bland pushed his fellow panelists and the audience to realize that we’ll never reach those whom the MDGs left behind if we approach the SDGs in the exact same way.

This was more than just a poignant criticism of the status quo, but an excellent reason why these conversations on innovation are so important. The SDGs beg stakeholders to be more targeted in its approach, and Bland argues that if you intend to do that through investing, you can do it most effectively by understanding the politics and geography of poverty. It seems obvious, but in reality this is a complete shift of the paradigm of the MDGs; in Bland’s words, “to effectively transition from the MDGs to the SDGs, we need to start thinking differently than the North-South, Donor-Recipient paradigm.” For all the criticism that the SDGs have received for being so lengthy, we must recognize that they force integration—you won’t achieve 17 goals by thinking of them as isolated from one another—and we need to force financing flows to act in that same integrated way. Failure to do so entirely misses the point of the SDGs in the first place!

3) Even the most innovative approaches cannot succeed where trust and confidence is missing.

So you have the resources, and you have the ideas to make those resources go farther than ever before. Sounds like a recipe for success! There’s just one problem. Bilateral donors might be on board, and the governments of developing countries are more ready than ever to make major gains towards the SDGs, but all of this leg work is for naught if you don’t have the buy-in of civil society.

All of the panelists shared anecdotes of incidences where a lack of trust was the downfall of an otherwise promising health program. Andy Wilson gave one example; with the recent emphasis on Health Systems Strengthening, many governments are focused on the establishment of a health insurance system. However, in places where citizens have built a distrust of public services, they are unlikely to want to pay into a government system. Plain and simple: it’s really hard to mobilize domestic resources if your citizens don’t want to cough up those resources, and even harder the more a society is marred by a history of unaccountability. Any innovative financing mechanism will have to focus on bridging the trust gap just as much as bridging the financial one.

There is no better way to encompass the prevailing consensus from the panel than the exact way that moderator Amadou Sy of Brookings Institution did. The oft-cited saying rings true: “More money for health, more health for the money.” The challenge now is funneling that money into devices allowing it to reach each and every person the SDGs aspire to capture.