Green light for new Asia-Pacific health financing mechanism

Published: 20, July 2018

A recent meeting convened by the Global Fund, Asia Development Bank and APLMA took Asia and the Pacific one step closer to a new regional financing facility to support health systems development and achievement of universal health coverage (UHC).

With many countries in the region now actively pursuing the UHC goal, understanding the health system price tag – and figuring out how to resource it – is arguably more important today than ever.

And yet, many health systems share the same financing challenges:

  • Unstructured resources: Budgetary support for health systems is often piecemeal, grants are not enough, and funding timelines are too short or misaligned to national health plans.
  • Externally funded investments: Health funding is fragmented and unable to sustain successes, as a result of its ‘silo’ nature.
  • ‘Old school’ funds: Much of the current financing is of a limited size, and not flexible or able to drive results at scale.

For many countries to achieve their UHC goal, there is a clear need for longer term, integrated and innovative forms of health system financing, which lie beyond what domestic funds or external donor grants can provide alone. Combining funds from several sources into one mechanism can be used strategically to extend the access countries have to larger resource pools, and allows for ‘blended’ forms of financing on the required larger scale. 

It also incentivizes governments to contribute additional domestic financing, allowing donors such as the Global Fund to ‘frontload’ resources in order to help close large-scale funding gaps. For countries preparing to transition from donor financing, combining grants with loans can extend total financing over a longer period.

This has been the fundamental idea behind a new collaboration between the Asian Development Bank and the Global Fund. Originally brokered by APLMA, the partnership is exploring how funding from donors such as the Global Fund can be combined with ADB technical assistance and/or resources in focused ways to allow them to jointly ‘leverage’ much larger, concessional investments in countries. In this way, existing disease-specific resources could help to enable broader health sector development financing on a significantly larger scale.

During the latest in a series of meetings to review potential mechanisms for achieving this, participants heard how a similar approach has been used to establish the Regional Malaria Elimination Initiative (RMEI) in Mesoamerica, in collaboration with the Inter-American Development Bank (IDB).

Dr Ferdinando Regalia, Division Chief in Social Protection and Health at the IDB, outlined clearly that as well as leveraging donor funding, the RMEI had improved coordination, provided a platform for health systems strengthening and supported gathering of evidence for learning and research.

The latest meeting of the ADB, Global Fund, APLMA and partners gave the green light for a similar ‘Regional Financing Facility’ (RFF) to be actively designed and established in the Asia Pacific region. The longer term vision will be to support health systems financing, including the specific malaria elimination efforts that form part of the health systems planning. The proposed facility will be designed to help governments access scalable, flexible and innovative financing that allows for multi-year financing to tackle larger health system challenges. And in doing so, allow governments to support UHC, set up financial and social protection systems, extend primary health care, reach vulnerable and mobile populations access to health care and much more.

On average, Asian economies spend just over US$ 700 per person per year on health compared to US$ 3510 in donor countries. Despite rapid economic growth, external grant financing is still crucial to addressing malaria, tuberculosis and other highly communicable diseases in the region. As an example, approximately 40% of all malaria programmes are still solely financed by the Global Fund.

As Asia Pacific’s economies grow and prosper in the coming years, donors such as the Global Fund will increasingly focus on sustainability, transition and co-financing of health grants. The Fund’s new policy emphasizes long-term sustainability as a key aspect of health financing, and that all countries, regardless of economic capacity and disease burden, should embed sustainability within national strategies, programme design and implementation.

A recent mid-term review of ADB’s Strategy 2020 committed to scale health sector investments from 1%–2%, to 3%–5% of ADB’s total portfolio; equating up to $1bn of investment in health by 2020 across the region.

“I am convinced that if we spend somewhere between 500 million and 1 billion US dollars, the marginal returns would be huge. We would save lives and get on top of transmission dynamics in high burden countries,” said Peter Sands, Executive Director of the Global Fund. “We work in similar ways with the Inter-American Development Bank, and have an MOU with ADB to do similar blended finance solutions in this part of the world.”

The latest partnership meeting took place during the 1st Malaria World Congress held in Melbourne earlier this month.

Photo credit: Photo credit to Pearl Gan in association with EOCRU, Jakarta ; OUCRU, Vietnam and The Wellcome Trust, UK.

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