Global Health and the Future Role of the United States (2017) / Chapter Skim
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8 Smart Financing Strategies
8 Smart Financing Strategies
Pages 241-268
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Without this global collaboration and appropriately structured financing mechanisms, further global health progress will be difficult to realize. This chapter discusses several approaches for global health investment, including broad and cross-cutting goals such as global public goods, health system strengthening, and long-term visioning.
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Contributing to Global Public Good As countries transition out of bilateral aid, donor governments have an opportunity to think more strategically about investing in global public goods instead of direct country assistance (also discussed in Chapter 2)
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To address this in part, previous chapters in this report call for broadening workforce training and task-shifting for community health workers into established platforms like PEPFAR clinics and integrating services in maternal and child health services centers to better incorporate awareness and management of noncommunicable diseases (NCDs)
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. The investment in the Global Polio Eradication Initiative in 1988 has already generated net returns of $27 billion, and is projected to reach $40–$50
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The United States, as the largest contributor to the campaign, saves the one time expenditures it invested every 26 days that the world is free from smallpox, making smallpox eradication one of the best public health investments in history. SOURCES: Barrett, 2013; Brilliant, 1985; Fenner et al., 1988; Miller et al., 2006; Seymour, 2004; WHO, 2010.
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Agency for International Development (USAID) strengthened its Development Credit Authority (DCA)
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There are smaller-scale innovations such as development impact bonds, or models like the Development Innovation Ventures through USAID's Global Development Lab (GDL)
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Small-Scale Innovations Development Innovation Ventures The GDL within USAID has contributed to nimble and responsive innovative efforts since its creation in 2012. The Development Innovation Ventures initiative was created to find, test, and scale up ideas that could radically improve global prosperity.
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While SIBs are often used for local or state government development, development impact bonds (DIBs) are used for international development.
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250 GLOBAL HEALTH AND THE FUTURE ROLE OF THE UNITED STATES Government agency Provides working Sets outcome, Pays if and only capital meline, and if outcome is payment level achieved Investor External Provides direct organiza on grants to fund ac vi es Investor Hires and Paid return if outcome manages is achieved Service Service provider provider Runs interven ons to achieve outcome Beneciary popula on FIGURE 8-1 Social impact bond flow diagram. SOURCE: This material [Social Finance: A Primer]
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. While private companies' philanthropic efforts have historically been categorized as corporate social responsibility, the last decade has seen a shift toward global health investment as a way to create shared value in their efforts.
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Finally, employees at Novo Nordisk reported a 21 percent increase in job satisfaction between 2008 and 2012, and employee turnover decreased by 7 percent during that same time frame. The Healthy Heart Africa program was launched by AstraZeneca in 2014 to increase access to medicines that prevent and treat cardiovascular disease by 10 million people by 2025.
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Furthermore, Arogya Parivar became prof itable 31 months after its initiation and its sales have increased 25-fold since 2007. SOURCES: KPMG and United Nations Global Compact, 2015; Novo Nordisk, 2013; Ogola, 2015; Shared Value Initiative, 2017.
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with international development organizations and the National Medical Research Institute of Tanzania to build on the program. The first phase focused only on employees and achieved a 50 percent reduction in malaria, but expansion to other mining operations was able to cover more than 90 percent of the mine's employees and 100,000 community members (AngloGold Ashanti, 2013)
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The World Bank understands that quality, resilient health systems and strong public health capabilities are crucial, but once an emergency event occurs, there is also a need to act quickly. The PEF accelerates and improves emergency response immediately, and similar to the Public Health Emergency Fund in the United States, described in Chapter 3, the PEF fills a gap in the current global financing architecture and is activated once an outbreak triggers a pre-designated level of severity.
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These organizations have successfully engaged in partnerships and market-shaping models to make their money go farther. For example, the Global Fund only finances programs when there is assurance that they do not replace or reduce other sources of health funding, and it actively seeks opportunities to catalyze additional donor and recipient investment through grants and other supportive structures (Brenzel, 2012)
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Recommendations for future AMCs or other innovative financing mechanisms noted that successful engagement with the pharmaceutical industry is critical to improve sustainability of initiatives and enable manufacturers to shift from a corporate social responsibility-based approach to a more commercially viable strategy (BCG, 2015) as highlighted in the previous sections of this chapter.
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Importantly, this method also provides a solution to the problem of poor alignment of donor goals and national priorities that has emerged in recipient countries. Global Financing Facility Following this trend of increased progress and successful results through RBF, the World Bank Group and the governments of Canada, Norway, and the United States announced in September 2014 the creation of the Global Financing Facility (GFF)
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Investment in community health workers results in a return on investment as high as 10:1 according to the WHO report Strengthening Primary Health Care through Community Health Workers (2015)
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Finally, creating more flexibility for innovative finance can better support this transition to domestic resource mobilization. As an example, USAID could allow development credit authority greater latitude to apply certain restrictions where the ultimate outcome will catalyze additional private-sector resources and the capital markets.
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This could be accomplished through integration of services as discussed in Chapter 6 and through the many PPPs highlighted in this report, so an established platform like PEPFAR can be used to address additional health burdens without much increase in cost. Stressing Increased Efficiency and Cost-Effectiveness Overall, many viable tools, including debt buy-downs, social impact bonds, and other mechanisms not discussed in this chapter such as impact investing, microfinance schemes, traditional equity investments can improve the accessibility of funds and efficiency of global health programs (Sturchio and Schneider, 2017)
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government needs to conduct more strategic and systematic assessments with an eye toward making long-term investments in global health instead of focusing on short-term expenditures. Conclusion: Increased financial gains in middle-income countries and a plethora of new and committed global health partners have created an opportunity for the United States to take smarter and more creative directions when financing global health programs.
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Recommendation 13: Optimize Resources Through Smart Financing Relevant agencies of the U.S. government should expand efforts to complement direct bilateral support for health with financing mechanisms that include results-based financing; risk sharing; and attracting funding from private investment, recipient governments, and other donors.
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Arlington, VA: Blue Ribbon Study Panel on Biodefense. Brenzel, L
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Global Polio Eradication Initiative. Harvard Kennedy School.
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https://www.weforum.org/ agenda/2017/01/ways-to-make-blended-finance-work (accessed February 13, 2017)
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2013. How a restaurant chain pioneered a social impact bond to fight malaria.
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2017. Global public goods for health (GPGH)
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