Financing For Health

AfGH holds European donors accountable to their funding commitments through its work on ODA for health.
AfGH holds European donors accountable to their funding commitments through its work on ODA for health.

Financing health will demand efforts from all actors to commit to adequate, equitable and accountable financing, and to think outside the box on innovative ways to transform the way resources are raised and spent, to fulfil the right to health for everybody. Without concrete measures it is difficult to see how a transformative set of goals will be realised within the post-2015 framework.

Each year, around 150 million people spend more than 40 per cent of their non-food budget on healthcare. The burden of out-of-pocket-payments can have a crushing impact on the lives of poor people, who have to make considerable sacrifices – often choosing between health care and food.

Donor Governments

Donor governments have a role to play by providing financing to eliminate cost as a barrier to accessing services, and making access to health equitable. This is most notably through the provision of Official Development Assistance (ODA), and technical support for equitable taxation and budget allocation for health.

AfGH advocates for European Governments and the European Commission to meet the long-standing commitment to allocate a minimum of 0.1% of Gross National Income (GNI) as ODA for health. This would go a long way towards bridging the gap between current health expenditure in many poorer countries and the estimated US$60 per capita needed to deliver essential health services by 2015.

The declining trend in ODA – and the corresponding shift towards trade and the ‘productive’ sectors – would have a severe impact on health ODA, and consequently on health coverage and services in developing countries, and would jeopardize progress towards the MDG’s, and hinder the implementation of health in the post-2015 agenda.

Partner governments

National governments should clearly set targets for raising funds, such as the 2001 Abuja Declaration by African governments of spending a minimum of 15 per cent of government budget for health. The ability and process for raising funds varies according to country context, however, domestic resource mobilisation based on large-scale compulsory pooling of resources is needed to redistribute resources from the healthy to the sick, and the wealthy to the poor.  Financial and technical support from donors could help countries implement progressive taxation or carefully-planned national insurance schemes under public leadership - as well as stronger rights-based approaches to health. 

Every government should ensure that impoverishing out-of-pocket payments are gradually abolished. In the meantime, governments should commit to the targets of out-of-pocket payments representing less than 20 per cent of total health expenditure, and no out-of-pocket payments for priority health services and the poor.

Innovative development finance

It is clear that new sources of public financing are urgently needed. Innovative financing should be an additional source of public revenue that provides predictable financial flows targeted towards health and other post-2015 goals. Financial transaction taxes, air ticket levies, taxes on tobacco and carbon emissions, for example, have the potential to raise significant resources, but they must not be an excuse for reducing other budgetary efforts.

Aid Effectiveness

All financing modalities should be based on the principles of aid effectiveness, value for money, transparency, accountability to both donors and recipients, and equitable access to services.

Ensuring the greatest impact with investments in health

Health ODA and domestic financing should focus on the poorest and most disadvantaged people, whichever country they reside in. Inequities and inequalities in health are persistent in high-, middle- and low-income countries alike, and need to be urgently addressed as the poor and most marginalised are disproportionally affected, and lack access to even basic health services.

Private Sector

All ODA-leveraged effort by the private sector must clearly contribute to achieving Universal Health Coverage, and address the poorest and most marginalised. Private sector actors must also respect human rights in their transnational activities.

Engagement of civil society

The choice of aid modalities – including Global Fund to Fight AIDS, Tuberculosis and Malaria, Global AIDS Vaccine Initiative and IHP+ – should complement sectoral budget support and be aligned with international human rights. This requires political commitment, and the meaningful engagement of all relevant stakeholders, including civil society and communities, to ensure mutual accountability.