Donor funds fall short for key global health functions

The analysis, by Dean Jamison, PhD, a global health economist at UC San Francisco (UCSF); Lawrence Summers, PhD, a former US Treasury Secretary now at Harvard University; and researchers at SEEK Development in Berlin and the Karolinska Institutet in Stockholm, is the first in-depth study of how donor funding is spent on global versus country-specific functions of health. Global functions are those that address transnational issues by supporting global public goods such as research and development (R&D), managing cross-border risks, such as pandemic preparedness, and fostering leadership and stewardship. It was published Monday, July 13, 2015, in The Lancet and comes as world leaders gather at the Financing for Development Conference this week in Addis Ababa, Ethiopia, to discuss how the United Nations' new development goals should be financed. These new goals, called the Sustainable Development Goals (SDGs), are to be adopted at the UN General Assembly meeting in September.

"We introduce a new definition of global health financing -- one that includes additional public R&D spending for neglected diseases," said lead author Marco Schäferhoff, PhD, of SEEK Development in Berlin, Germany. "This expanded thinking has the potential to reshape how policy makers approach supporting health."

In all, the analysis found that just $4.7 billion went toward the global functions of health, which is far less than the authors said was needed. Experts have recommended investing $6 billion a year just on R&D for neglected diseases.

The analysis found that in 2013, donors invested less than $1 billion towards managing cross-border risks, although the World Bank has estimated the annual cost of building a pandemic preparedness system for low- and middle-income countries would be $3.4 billion alone.

Just before the Ebola outbreak in West Africa, WHO's budget for outbreak and crisis response was cut nearly in half from $469 million to $241 million. The authors said the recent approval of a $100 million emergency fund at WHO shows that world leaders have begun to recognize the need to address this funding gap. But donors spent only 3 percent of global health aid in 2013 on leadership and stewardship, and WHO's core budget continues to shrink.

The analysis shows that the vast majority of health aid, 79 percent, went to country-specific functions in global health -- defined as aid sent directly to recipient countries for health service delivery and system strengthening.

The authors said that in the next couple of decades, there are likely to be significant changes to international health aid, as economic growth will allow more countries to increasing spending on domestic health services. The analysis found that 31 percent of country-specific aid is directed toward middle-income countries. The authors said the global community would better support health in middle-income countries by increasing the money available for global functions. This would help the world's poorest people, even if they live in a middle-income country too rich to qualify for aid. For example, the authors said, countries like China and India can benefit from bulk purchasing of commodities, lower drug prices and control of diseases like multi-drug resistant tuberculosis. India, alone, has a fifth of these cases around the world.

"We should be investing in global functions, like research and development and constraining transmission of drug-resistant disease strains across borders, because these investments will help poor people wherever they live," said Jamison, who is a senior fellow in Global Health Sciences at UCSF. "If aid must be cut, it should be for middle-income countries that can afford more domestic spending on health."

However, the authors said that donor countries should ensure that vulnerable populations in middle-income countries, such as ethnic minorities who suffer discrimination, refugees and people who inject drugs, continue to get support, since it may be difficult for many countries to withstand the political pressures against helping stigmatized groups.

Finally, the authors said health aid to the world's poorest countries must continue in the coming decades. Despite worldwide economic growth, there are still expected to be 22 low-income countries in 2035, compared to 36 in 2012. Many of these countries are fragile and too wracked with conflict to adequately attend to their people's significant health needs.

The study was funded by the Bill & Melinda Gates Foundation.