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Setting the Stage for Sustainable Investments in Health
Following the presentations and discussion on transitions affecting global health, the second session of the workshop turned to setting the stage for sustainable investments in health. Divided into three topical discussions, the session covered the following:
- Challenges and potential areas for partnerships to support countries in the transition out of external funding programs
- PPPs as a mechanism to develop health care infrastructure in countries managing transitions and addressing other pressing health needs
- How market shaping and market-based interventions can play a role in having an effect, value for money, and sustainability
MULTISECTORAL ENGAGEMENT AND SUSTAINABLE SOLUTIONS TO SUPPORT TRANSITIONS
Peter Sands of the Global Fund to fight AIDS, Tuberculosis and Malaria (Global Fund) described his organization’s challenges when transitioning countries out of Global Fund support as well as several areas where he sees potential for partnerships to support countries and sustainability in the process. To begin, he shared three overarching challenges the Global Fund encounters in the transition process. The first challenge is where to draw the line for the eligibility criteria. While, in Sands’s opinion, all stakeholders agree that development assistance for health should focus on
the populations with the heaviest disease burdens and the poorest economies, the question is where to draw the cutoff line for support. Wherever the line is drawn will be a source of controversy.
The second overarching challenge, he noted, is how to go from a model highly dependent on external assistance to a model owned and financed by the country’s domestic resources. Sands stated that the right sustainable solution for providing health in a country is for it to be provided through domestic resources: “Whatever the model is, it should be a country-owned solution to health services.” The question is how to get there.
The third overarching challenge for Global Fund transitions is being the “last one standing.” The Global Fund’s threshold for eligibility is higher than most other programs; thus, Sands noted, developing partnerships in the transition process is difficult when so many other partners have already left the country. Inevitably, transition will always be hard and will always involve difficult trade-offs and frictions, Sands maintained.
Sands then described several challenges when implementing the transition process in country. Transition in some countries, he noted, can be more difficult and less successful simply because planning has been poor or undertaken too late. Early planning and preparation are prerequisites for the transition procedure, he insisted. Often it requires legislative actions, skilled planning, integration across the different sectors of the government, and resolution of weaknesses in service delivery. The Global Fund broaches the possibility of a transition with governments many years before actually implementing the procedure, Sands explained.
Another common challenge with transitioning countries is procurement. When countries transition out of the Global Fund’s procurement system, they often face issues of quality control, stock outs, and price. To help address the procurement issues, Sands would like transitioned countries to have access to the Global Fund’s pooled purchasing mechanism, but he admitted that this arrangement may not be as simple as it sounds. There can be registration or technical problems or legal barriers to accessing international pooled purchasing mechanism systems. When addressing the procurements challenges, Sands noted countries are given little technical assistance.
The third challenge during the transition process that Sands presented is continuing services for key and vulnerable subpopulations. These subpopulations suffer from concentrated HIV and TB epidemics that can spread rapidly across a country whose overall population has very low infection rates. Civil society organizations are often critical for reaching these populations. The Global Fund encourages governments to work through civil society in providing services to these key and vulnerable populations. These efforts have been successful in some countries, he said, but not all.
A fourth challenge Sands acknowledged is political will. He pointed to malaria to illuminate the challenge. Sustaining efforts to eradicate malaria, Sands said, is very expensive on a per case basis, especially as the political momentum is flagging. That said, there are still successes to be proud of, he pointed out. Paraguay has just been certified malaria free, and several countries are on the way to reaching the finish line. Without a sustained political commitment, though, progress can quickly backslide. Sands emphasized that the political will of top-level government officials to solve these problems is the most fundamental determinant of a successful transition.
The fifth challenge Sands noted with transitioning countries is financing. Some countries may have the required money to transition, but the issue is not on their priority list. However, many countries have simply too narrow a fiscal base. Even if they prioritize the issue, their starting resource envelope is simply not big enough to ensure their fiscal sustainability.
The final challenge Sands acknowledged is how country specific each transition will be. Political systems and population sizes will vary. Often within countries, disparities between regions or between the capital city and rural areas are significant.
Given these challenges in the journey to successfully transitioning countries out of Global Fund support, Sands suggested three areas for potential partnerships to support countries in the process: (1) technical assistance for building health systems capacity, including procurement; (2) developing sustainable financing mechanisms; and (3) supporting civil society to reach key and vulnerable populations.
ELEVATING HEALTH ON DOMESTIC AGENDAS: LINKING HEALTH AND ECONOMIC GROWTH
Following Sands’s presentation, Trevor Gunn from Medtronic and Mark Halliday from the International Finance Corporation (IFC) jointly presented on investments in health care infrastructure and the merits of PPPs for these investments in countries transitioning away from development assistance and toward self-sufficiency. To set the stage, Gunn described some of the relevant changes these countries are experiencing. First is the rise in NCDs. At the same time these countries are grappling with how to finance health services for infectious diseases that were previously supported by external funding programs, they are also experiencing a rise, in some cases an explosion, of NCDs. With less than 1 percent of all global health funding allocated to NCDs, Gunn pointed out that governments themselves must tackle both prevention and access to services. Second is the push for UHC. The push for UHC is being driven
on two fronts—by the global goals and by the expanding middle-class populations—with both elevating the expectations for the health services that governments will deliver.
To provide the health services required to meet the demands of supporting previously externally financed programs, tackling NCDs, and increasing coverage, Gunn said countries need health care infrastructure—both human capacity and physical infrastructure. Beyond meeting the human demands of their populations, health care infrastructure also supports economic growth through foreign direct investment, he said. Both Gunn and Halliday recounted examples where investment decisions of multinational companies were determined based on the availability and quality of the health care infrastructure for their employees or potential customers. However, he noted, health care generally is not considered part of infrastructure. When it is, it typically is only in connection with large tertiary health care facilities. Health care infrastructure, he said, can be as small as a cardiac catheter laboratory or a clinician’s practice.
Infrastructure development is inextricably linked to PPPs, Gunn said. Health care infrastructure should be the same; however, the number of PPPs in health care is much lower than in other sectors. Halliday explained how the IFC facilitates the development of these PPPs: the IFC is the part of the World Bank Group that goes beyond traditional development assistance to mobilizing the private sector. IFC advises governments on PPPs, particularly for infrastructure development. Since the late 1980s, he noted, the IFC has performed about 350 transactions in emerging nations, with nearly 20 percent being in the health sector. Of these transactions, about 30 percent involved large tertiary hospitals, 20 percent involved diagnostic imaging equipment, a further 20 percent involved dialysis equipment, and 6 percent involved health insurance schemes. The rest, he said, was a mix of clinical and other interventions.
Halliday shared some lessons learned from advising governments on health care PPPs. First, there is a cost associated with structuring and tendering PPPs. The essential trade-off for government is the value they achieve in improved infrastructure and services versus the cost of the transaction. Halliday emphasized having the right people engaged in the process is key to balancing this trade-off. The second lesson he shared is health care done badly, such as the over-prescription of opioids, can be highly destructive and expensive, so getting it right is critical for society. The third lesson is the importance of governments developing a strategy and then determining how specific PPPs fit within it rather than engaging in one-off projects. The final lesson Halliday shared is the value of standardization. If processes can be standardized in a positive, efficient way, the costs of transitions can be reduced in the long term and the benefits maximized.
Discussion
In the discussion that followed Gunn’s and Halliday’s presentation, Amy Lin of USAID asked Halliday if he expects the transitions of countries out of development assistance to affect the types of projects the IFC facilitates. Halliday believes the IFC will probably address more programmatic issues and less single projects, advising governments on strategic long-term health care needs. Furthermore, regardless of the effect of country transitions, the way health care is provided will change radically in future years. He predicts that in a few years, the most important medical device will be the mobile phone; information and technology companies are radically changing the health care system.
Leigh Verbios from the U.S. Food and Drug Administration commented on the role of strong regulatory systems. To ensure the quality of products a country will need after a transition, a strong regulatory system must be in place to assure consumer protection. Halliday was in complete agreement with Verbios’s statement, saying, “Good regulation is transparent, so those coming into a market can feel that they have an equal shot.”
SHAPING THE MARKET FOR INVESTMENTS IN HEALTH
The final discussion regarding health investments in transitioning countries focused on market shaping and market-shaping interventions. Amy Lin from USAID facilitated the discussion. Amanda Glassman from the Center for Global Development described how procurement procedures and the market for health commodities could be made more effective and efficient. Johanna Ralston from the World Obesity Federation offered her perspective on the growing burden of NCDs and several approaches to address it.
Lin began the discussion by defining market shaping1 and highlighting its importance in enabling sustainable health-sector investment solutions during and after country transitions. Market shaping, she explained, can make health care markets more efficient and effective in delivering lifesaving health products, commodities, and services required by LMICs. Moreover, market shaping can foster greater access to health care services and greater reliability of market products and services, Lin noted. She
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1 USAID defines market shaping, in the context of serving the public good, as optimizing the market to maximize public health impact performed through examining the interaction of public, private, and nonprofit actors in the market and how they interact and make choices at the level of the whole market. Market shaping ultimately addresses deep-rooted issues of supply and demand, and a successful market-shaping intervention requires a “thorough inventory of the benefits, trade-offs, and unintended consequences from multiple perspectives in the market” (USAID, 2014).
went on to posit that market-shaping interventions can help reduce breakdowns in complex health markets, thereby allowing global heath donors and actors to more efficiently allocate their investments.
To date, market-shaping interventions in global health have focused primarily on ensuring availability and affordability of products procured through a few large buyers focused on infectious disease control, Lin noted. With the advent of more decentralized country procurement and the rise in NCDs, a task for the health community, she said, is to explore how to expand the focus of market-shaping activities. Lin emphasized this expansion includes broadening the focus to planning for programmatic and services delivery as well as product procurement.
Lin then detailed several successful market-shaping interventions USAID has supported. These interventions include agreements on ceiling prices, volume guarantees, advance-purchase commitments, copayments, strategies for engaging suppliers, and aggregate demand forecasting. As an example, Lin described how third-generation indoor residual sprays to combat malaria now reach the market faster and are deployed more rapidly than before. As a result, an additional 15 million people who otherwise would have been exposed are now protected from the disease. Lin also noted that purchasing of contraceptive implants more than doubled over the past 2 years thanks to an agreement reached between several donors to purchase a set volume of implants in exchange for a significant price reduction. A similar approach is under way for antimalarial therapies.
While these examples of progress are exciting, Lin emphasized the importance of learning from each attempt, continuing to perform rigorous market analyses, and honestly addressing any problems identified along the way. Effective market shaping, she said, requires coordination between the public and private sectors to ensure incentives and interventions are appropriately aligned. She added that beyond ensuring products are available and affordable, market shaping needs to focus on planning for programmatic and services delivery.
Following Lin’s introduction to market shaping, Glassman described some of the procurement challenges countries are facing in the context of transitions. She noted that donors or external funders procure about 50 percent of the medicines available in low-income countries. Governments account for 10 percent, and the remaining 40 percent is through out-of-pocket spending. Public spending on medicines, she said, does not compensate for the drop in donor aid following transitions. Out-of-pocket spending is likely to remain a sizable portion of the total in the immediate future. The challenge, she said, is to know how to retain the availability of health care commodities in the private sector while, at the same time, inducing the public sector to subsidize essential medicines for the poor.
Failure to achieve this objective will inevitably produce a state of inequity, she said. To illuminate the challenges with these transitions, Glassman described the situation in a few specific countries. In Ghana, 1 month’s supply of generic medicines for diabetes costs about 17 days’ wages for the lowest paid, unskilled, public-sector employee (WHO, 2015). In Afghanistan, 15 percent of the total health expenditure in the public sector is financed through GPEI. In Mozambique, PEPFAR accounts for about 25 percent of total health expenditures in the public sector (Health Policy Project, 2016).
Glassman referred to a study in Ghana where people were buying a statin at a price about 20 times greater than that paid by the UK National Health Service. This example highlights the weak procurement practices in many LMICs. Procurement in both the public sector and out of pocket is often fragmented and disorganized. An additional challenge when countries are transitioning out of aid funding for commodities is the increased preference for local manufacturers, introducing quality control issues. Providing a promising example, Cameroon, she noted, has a procurement agency that helps purchasers to structure public and private spending. The agency buys products for the public sector and, after going through a quality assurance process, sells them wholesale to private pharmacies.
After laying out these challenges, Glassman presented two suggestions for addressing them. First, if domestic procurement of commodities will be the reality, she proposed the global health community should consider comprehensive programs for reform and policy dialogue with countries on regulatory reform, procurement strengthening, and improving competition among quality-assured generic manufacturers. The second suggestion is reformulating and reprioritizing the use of development aid within this new context. Glassman proposed three priority areas for aid going forward: (1) pooling and copayment agreements to facilitate access to innovative products, (2) investments in global public goods, and (3) supporting key and vulnerable populations.
Following Glassman’s presentation, Ralston provided a perspective on NCDs within the context of transitions. NCDs cause about 70 percent of all deaths in the world, yet only 1–2 percent of development assistance for health is spent on NCDs. So the question is, how do countries transition from no funding to addressing this heavy burden of disease while at the same time adjusting to losses in external funding for infectious diseases?
Regarding global initiatives to address NCDs, Ralston pointed to one positive outcome of the lack of funding and prioritization of NCDs. The gap helped to create an NCDs coalition across advocates and others focused on the discrete areas of cancer control, cardiovascular disease,
diabetes, and chronic respiratory disease. Recognizing that all of these areas are under-prioritized and share common risk factors, the coalition fostered a collective approach focused on long-term mutual benefit over individual short-term interests. This collective approach has enabled a focus on policy interventions to address the underlying shared risk factors.
She pointed out that WHO has produced a document listing “the 16 best buys” for interventions on NCDs. The interventions are based on a set of targets that identify the most feasible and effective interventions and those most likely to produce the highest returns on investments. The WHO document also lists options for interventions against each of the four key NCD risk factors, namely tobacco, harmful use of alcohol, an unhealthy diet, and physical inactivity, and also for the four major disease areas—cardiovascular diseases, diabetes, cancer, and chronic respiratory diseases (WHO, 2017). Some interventions, she said, include treatments, and others include physical activities. The report also focuses on tax interventions and the concept of STAX—taxes on sugar, tobacco, and alcohol. These taxes, Ralston said, create a win/win/win in reducing demand, reducing consumption, and generating public-sector revenue.
Another promising area for addressing NCDs is through integration into existing programs. Integration can be included within the health sector, for example, as part of UHC. However, integration can go further into other sectors such as urbanization, climate change, and transport. Ralston recounted an example of a bridge built in Scotland that was praised for coming in well under budget. However, the cost-cutting measure included eliminating sidewalks. Many infrastructure projects in LMICs are supported with World Bank loans, and these loans can be an opportunity to integrate NCD prevention, ensuring physical activity and accessibility are integrated in the design.
Lastly, Ralston emphasized that people are not silos. Individuals experience both communicable diseases and NCDs. Going forward, she suggested that interventions should be designed with the users in mind.
Discussion
To start the discussion, moderator Lin asked Glassman what she proposes the global health community should do to help countries take more control over their procurement decisions. Glassman would first advise the global health community to standardize and serialize medical products, with a view to increasing the visibility of markets in both the public and the private sectors. There is no track-and-trace system in most health systems of middle-income countries today, she noted. She also expressed concern about markets holding too much inventory at one
time, a situation that could incur a huge cost or prevent accurate demand forecasting. Choosing what products to buy is also a subject of concern, she added. Should governments, she asked, take the whole set of products that donors are buying today? Countries might benefit from support in doing health technology assessments, cost-effectiveness calculations, and budget impact analyses. Glassman would like to see regulatory reforms that would facilitate access to the market of manufacturers of nonbranded quality generics.
Turning to Ralston, Lin noted some public-sector partnerships and PPPs can be controversial, depending on which sector is engaging with which type of company. She asked Ralston to comment on this issue because there may be implications for the NCD arena regarding sugar-sweetened beverages and agricultural products. Ralston replied that there are health-harming industries that can become health positive, especially in the food sector. However, some other health-harming industries, such as tobacco, are a nonstarter.
Alleyne remarked that most people speak of the 41 million people who die from NCDs every year, but few speak of the 3–4 billion living with NCDs. The narrative, he said, needs to transition to focus on those who are living. Focusing on the dead is an old narrative based out of the infectious disease community, he said. For NCDs, he urged the community to focus the narrative on the living. Reflecting on the example Glassman shared about the price difference for statins between Ghana and the United Kingdom, he asked her if partnerships can be forged between countries so that each country knows what the other is paying for the same product. As a final remark, Alleyne pointed out the scheme in the Americas for joint harmonization of regulation and suggested other regions should consider similar models.
John Monahan of Georgetown University asked Glassman which international partners have supported these countries in strengthening their health care procurement operations. Glassman said that the World Bank or regional development banks would provide support in this area.
Takizawa commented to Glassman that Japan is struggling to develop a policy for countries implementing private health insurance. These countries, he said, often have health-related discrepancies or inequalities. Glassman suggested that if the government of a country can only fund a certain proportion of health insurance, private health insurance or private pooling could be a means of curbing out-of-pocket expenses. Brazil and South Africa, she noted, have enrolled all of their public employees in private health insurance, leaving the rest of the population to use the national health service. She remarked that countries should be regulating private health insurance as a way of contributing to UHC.
Following the remark made by Alleyne that the focus of the global health community on NCDs should cover not only the deaths from NCDs but also the people living with NCDs, Jennifer Healy, with the U.S. Department of Health and Human Services, asked Ralston how the lives of people living with NCDs could be extended. Ralston replied that the treatment given to NCD patients should be more than just medication. Food, she noted, is very much a part of the treatment. Many diseases, she remarked, are a logical response to the environment in which people are living. For example, air pollution is associated with respiratory and cardiovascular diseases. A holistic approach to the management of NCDs, she added, would certainly contribute to extending the lives of NCD patients.
