Financing Global Health for LMICs: pouring water into leaking cauldron?

For the past halfsemester (yes, only half way to go.) we have discussed several times about global health financing. We have formed our ideas about what needs to be done to make the whole system work better. I have always believed that donor funds are still essential to low and middle income countries (LMICs), and that it needs to flow transparently. If the receiver government cannot run it that way, probably it is better for donor organization to control the usage of money. I always encounter an issue when I start thinking about donor funding and governance. I believe that governance really is the most important factor to measure the success of donor funding, even more important than raising fund. However, receiving governments usually end up reporting to multiple organizations relating to a same matter, causing traffic in distribution of funds to branch organizations.

Let’s look at some data. Development assistance for health (DAH) has grown substantially, from $ 5.6 billion in 1990 to $ 21.8 billion in 2007. Majority of funding went into support HIV/AIDS projects, and only $ 0.9 billion went to health sector support. It has grown but the funding still is focused on specific diseases and their interventions. The impact on health by donor funding is not so profound either; for example, MMR indirectly has positive relationship without great improvement. The fact is that we have done much, and we are still giving. While whole world is suffering with recession, NCDs have become another issue in LMICs. For how long should they need to rely on donor funding that seems like doing not much good to them in the long run? What should be done to ensure receiving countries to run at least near-independent health systems? Several methods were introduced in this week’s articles such as tax revenue, risk pooling, securing more external funding and user fees application. The authors essentially suggested multiple ways to invest efficiently and to stimulate economic growth. Economic growth, which most LMICs would need right now, is the number one priority to solve health care related problems. I am quite opposed to the user fees application where burden will mostly be on the poor and the vulnerable. Instead, LMICs will need to develop certain insurance policy (social or community based) to generate pool that can be used for reinvestment on health. First of all, health care needs to be supported/funded by prepayment (e.g. health insurance) of users, government budget and donor funding. Prepayment will encourage investment with ‘seed’ money. Subsequently generated interest will then be invested back to health care. The system will need to categorize members according to their socioeconomic status such as income, health, and family composition. Basically the rich pay more; the poor pay less within their capacity. The preventative primary care must be offered to everyone for free in LMICs. People are generally more at risk for acquiring diseases in LMICs, and it is important to intervene early before minor illnesses escalate into serious problem. For costly secondary services, government and donor funding should be the major budgetary sources. When there is efficient primary health care system, the secondary care will be needed significantly less. Once such system is settled, the concentrated effort on universal primary health care will pay off in the end. There will be lower incidence and prevalence rate for preventable diseases within communicable and non-communicable diseases, and general health will be much improved. Eventually LMICs will have health care system that can be independently managed by their own governments in the future.


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