Photo credit: IFFIm
Last week I had a bit of a rant about equitable distribution of care. Later, in a debate with a colleague, I was urged to consider solutions rather than just reiterate well-known problems. Ok, point well taken, my friend. Let’s start with the bottom line – if we’re going to provide quality care, we’re going to have to pay for it.
Some of my recent work has allowed me to dive into financing for global health, a topic which I find infinitely fascinating. The Institute for Health Metrics and Evaluation recently released their 2010 report, which provides enormous detail into the last two decades of global health financing. Let’s not debate the methodology, which for the record I believe is sound. Let’s instead celebrate: it’s full of good news. Since the 1990’s, development assistance for health has increased more than four-fold, and increases have been largely steady. At the same time, domestic spending (that’s the money that developing countries contribute to their own health) has increased considerably as well. Which means that aid is not supplanting domestic spend, which some have feared, but rather encouraging its growth. Double good news.
The not-so-good news is that bad news is on the way. Growth rates are slowing, by about half in the last two years. The assumption is that this is the impact of the economic crisis that is just beginning to appear in the numbers. Private foundations and corporations were the first to cut their spending, while bilateral (e.g. USAID) and multilateral (e.g. Global Fund) are continuing their spending spree. But the future looks dim – aid spending takes awhile to peter out as the political process is slow. Funding cuts, as evidenced by my rant last week, are on the horizon.
Here’s the thing about global health financing: on a graph, flatlining funding looks like maintenance of status quo, but in real terms it’s a gradual decline. Growing populations, inflation, more sophisticated treatments (that do a better job, but often cost more), mean that more money is needed to do the same job. Sounds like a bad investment, until you weight it against the benefits, which have equal if not greater rates of return. Healthier moms, healthier kids, and healthier families have enormous contributions to make. They get more education, secure better jobs, have higher productivity, and eventually become taxpayers and investors – paying back into the system that gave them a hand up. Ultimately, the developed world bets on the fact that countries with healthier populations will be more stable as societies and less costly in terms of peacekeeping and emergency aid (sorry to burst the feel-good bubble that we were doing this out of goodness and largesse).
Unfortunately, our nation-state driven political process doesn’t do a good job of waiting. The benefits of healthier societies take a few generations to return the investment, and by that time, our office-seeking politicians have been put out to pasture. Their incentive is to look for ways to spend money that keep you, voter, happy. In times of economic uncertainty, sending money to far away places with distant benefits is foolhardy. In a way, I can’t blame them for slashing aid budgets, they’re just looking to keep their jobs like you and me.
More good news – since this is a good news post. There are other ways. Commitments by politicians are fickle for good reason, as we’ve learned. But smart people in influential positions have been busy these last few years coming up with myriad ways to get some cash when crises loom. These are still in early days, but results are promising.
The ideas don’t stop there. More proposals have been on the table for the last six years or so, as a result of a task force formed by the WHO and representatives from Brazil, Chile, France and Spain. The ideas include taxation of foreign exchange transactions (a possible $30 billion per year), taxation of the arms trade (estimated at a possible $5 billion benefit), and voluntary contributions through credit cards (allowing you to tick a box and donate $1-2 on top of an internet purchase to a global health fund). These ideas were re-iterated in a more recent report by a WHO working group.
I cringe to say this, but I do agree with Nile Gardiner at the Telegraph to a point: global taxation is out of sync with global representation. Until there is a system of global governance which allows for democratic representation of global citizens, I believe that it is inappropriate to issue global taxes without individual negotiation with national sovereign governments. But he misses the point: the suggestions on the table still require politicians to sign their countries up (or in the case of voluntary contributions, consumers still have to tick their box). Innovative financing mechanisms make it easier for politicians to balance the long-term gain with short-term pain, since the pain is either relatively dispersed or comfortably in the future.
Success with GAVI and UNITAID, among others, may convince policy makers to jump on the bandwagon. In the meantime, I see these innovations as promising and encouraging. Let’s make them more well-known and widely understood, so that they become less of an innovative anecdote and more of a mainstream mechanism.
