Starting the Conversation Early with Future Ministers of Health and Finance
As a country gets richer, the quality of and access to health care for its citizens naturally goes up.
In fact, the opposite can happen. Recent economic growth in a specific group of developing countries means that these countries won’t be eligible much longer for external sources of health funding. As income levels rise, support from some of the largest multilateral global health funders—including Gavi (the Vaccine Alliance), the Global Fund to Fight AIDS, Tuberculosis and Malaria, the Global Polio Eradication Initiative, and the World Bank—tapers off. For countries that have come to rely on these sources of financing for health outcomes, the transition can be tough. According to a 2016 report by the Institute for Health Metrics and Evaluation, development assistance makes up about 35 percent of the amount spent on health in low-income countries.
ACTION, a global health advocacy partnership, projects that 36 countries will likely transition or ‘graduate’ out of eligibility for two or more multilateral health financing mechanisms in the next decade. 24 countries will transition out in the next five years alone. There is a high risk that the resulting financing burden will fall on out-of-pocket patients. While roughly 30 percent of health spending in low-income countries is already out-of-pocket, this proportion doubles for lower-middle-income countries as development support is phased out. According to the World Health Organization, higher levels of out-of-pocket spending implies higher financial barriers for health services and greater risk of financial protection problems among the poor.
With this looming transition ahead, are countries planning accordingly? Are governments prioritizing health financing and looking for innovative ways to fill the gap left by development funding? To explore this urgent question, the Milken Institute (MI) hosted a roll-up-your-sleeves discussion with two exceptional groups of young professionals: the IFC-Milken Institute Capital Markets Fellows and the Global Health Corps (GHC) Fellows. Both groups are committed to changing the world through smarter policymaking in their respective fields. Among them are the future ministers of health and finance of their countries. There is no better time in their careers for these two groups to start talking to one another.
To frame the conversation, the MI-GHC event featured four interactive roundtable discussions, each led by experts in the field and focused on a different source of health financing that countries could better mobilize:
- Hannah Bowen (director of ACTION) and Loyce Pace (president and executive director of the Global Health Council) led a conversation around advocacy and public finances (or how to encourage governments to create sufficient ‘fiscal space’ ahead of their transition, thereby allocating more funds to the health sector)
- Hafeez Ladha (director of innovative finance at the Financing Alliance for Health) led a discussion on how to raise domestic revenues for health outcomes (from social health insurance contributions and tax levies to user fees at public health facilities)
- Aron Betru (managing director at the Milken Institute Center for Financial Markets) dug into the details of an innovative financial structure where private funding complemented donor funds for procuring medical supplies
- John Simon (founder of Total Impact Capital) and Christopher Lee (director at the Milken Institute Center for Financial Markets) shared the investor perspective and explored how to increase levels of impact investing in this space.
The two groups of Fellows actively engaged with the speakers and investigated how specific transaction structures and policy or advocacy strategies could apply in their own countries. Discussions covered the globe, with Fellows sharing their perspectives from Kenya, Zambia, the Gambia, Côte d’Ivoire, Ghana, Mauritania, Liberia, Nigeria, Ethiopia, Haiti, Saint Kitts, Mongolia, Pakistan, Sierra Leone, Sri Lanka, Colombia, Malawi, and Zimbabwe. Speakers and Fellows alike came away from the conversation with new connections and ideas for bridging the health financing gap.
This dialogue was the first of several joint initiatives for the Institute and the Global Health Corps, all designed to foster collaboration amongst change makers. With extremely young populations in many of the countries represented (the median age is 19 across Africa, and as low as 16 for Zambia), thinking more creatively and urgently about financing health care will amount to financing the future.