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Africa: "Diagonal" Health Financing
AfricaFocus Bulletin
Mar 27, 2008 (080327)
(Reposted from sources cited below)
Editor's Note
The dichotomy between "vertical" financing (aiming for
disease-specific results) and "horizontal" financing (aiming for
improved health systems) of health services in developing
countries is both destructive and unnecessary, argue a team of
health activists and researchers in a new peer-reviewed policy
paper published in the journal Globalization and Health. They
propose expanding a "diagonal" approach that recognizes the
necessary complementarity between disease-specific programs and
improvement in health systems, with costs shared by both
international and domestic funding sources.
This AfricaFocus Bulletin contains excerpts from this article by
Ooms, Van Damme, Baker, Zeitz, and Schrecker on the "diagonal"
approach to Global Fund financing, published on March 25, 2008. The
full article, with footnotes, is available at http://www.globalizationandhealth.com/content/4/1/6
For earlier AfricaFocus Bulletins on health-related issues, visit
http://www.africafocus.org/healthexp.php
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The 'diagonal' approach to Global Fund financing: a cure for the
broader malaise of health systems?
Globalization and Health 2008, 4:6 doi:10.1186/1744-8603-4-6
Gorik Ooms (gorik.ooms@scarlet.be), Wim Van Damme (wvdamme@itg.be),
Brook K Baker (b.baker@neu.edu), Paul Zeitz
(pzeitz@globalaidsalliance.org), Ted Schrecker
(tschrecker@sympatico.ca)
Submission date 14 November 2007 Publication date 25 March 2008
Article URL http://www.globalizationandhealth.com/content/4/1/6
This peer-reviewed article was published immediately upon
acceptance. It can be downloaded, printed and distributed freely
for any purposes.
Background
The potentially destructive polarisation between "vertical"
financing (aiming for disease-specific results) and "horizontal"
financing (aiming for improved health systems) of health services
in developing countries has found its way to the pages of
Foreign Affairs and the Financial Times. The opportunity offered
by "diagonal" financing (aiming for disease-specific results
through improved health systems) seems to be obscured in this
polarisation.
In April 2007, the board of the Global Fund to fight AIDS,
Tuberculosis and Malaria agreed to consider comprehensive country
health programmes for financing. The new International Health
Partnership Plus, launched in September 2007, will help
low-income countries to develop such programmes. The combination
could lead the Global Fund to fight AIDS, Tuberculosis and
Malaria to a much broader financing scope.
Discussion
This evolution might be critical for the future of AIDS treatment
in low-income countries, yet it is proposed at a time when the
Global Fund to fight AIDS, Tuberculosis and Malaria is starved
for resources. It might be unable to meet the needs of much
broader and more expensive proposals. Furthermore, it might lose
some of its exceptional features in the process: its aim for
international sustainability, rather than in-country
sustainability, and its capacity to circumvent spending
restrictions imposed by the International Monetary Fund.
Summary
The authors believe that a transformation of the Global Fund to
fight AIDS, Tuberculosis and Malaria into a Global Health Fund is
feasible, but only if accompanied by a substantial increase of
donor commitments to the Global Fund. The transformation of the
Global Fund into a "diagonal" and ultimately perhaps "horizontal"
financing approach should happen gradually and carefully, and be
accompanied by measures to safeguard its exceptional features.
Background
The potentially destructive polarisation between "vertical" and
"horizontal" financing of health services in developing countries
has found its way to the pages of Foreign Affairs [1] and the
Financial Times. [2] This debate is not new; Uplekara and
Raviglione describe a pendulum that has swung between vertical
and horizontal for decades. [3] However, the new International
Health Partnership Plus (IHP+) gives renewed life and urgency to
the debate. [4]
The opportunity offered by the "diagonal" approach û briefly
mentioned in the Financial Times article by Anders Nordstrom,
Assistant Director-General of the World Health Organization (WHO)
responsible for health systems and services û seems to be obscured
in this polarisation. The terminology originates with Julio Frenk
and Jaime Sepulveda [5], who captured what leading AIDS activists
had believed for many years: that funding for AIDS treatment
and prevention will be the driving wedge for urgently needed
increases in the overall level of resources available for
health. Frenk and Sepulveda describe the diagonal approach as a
"strategy in which we use explicit intervention priorities to
drive the required improvements into the health system, dealing
with such generic issues as human resource development,
financing, facility planning, drug supply, rational prescription,
and quality assurance." [5]
In April 2007, the board of the Global Fund to fight AIDS,
Tuberculosis and Malaria (Global Fund) agreed to consider
comprehensive country health programmes for financing. [6] The
IHP+ - which embraces the International Health Partnership
initiated by the government of the United Kingdom [7] and related
initiatives, including the Deliver Now for Women + Children
campaign initiated by the government of Norway [8] - will help
low-income countries to develop such comprehensive country health
programmes. In a joint statement with UNAIDS, the GAVI Alliance,
UNICEF, the United Nations Population Fund, the World Bank and
the WHO, the Global Fund confirmed its support: "We, as
international health partners committed to improving health and
development outcomes in the world, welcome and fully support the
International Health Partnership"s mission to strengthen health
systems." [7]
Similarly, discussions within the United States on the
reauthorisation of the President"s Emergency Plan For AIDS Relief
(PEPFAR) increasingly focus on expanding human resources and
improving procurement and supply chains, patient information, and
laboratory systems. [9]
The authors believe that the diagonal approach is an essential
concept for changing the global architecture of health assistance.
This evolution could substantially broaden the scope of Global
Fund financing; it might be critical for the future of AIDS
treatment in low-income countries, yet it is proposed at a time
when the Global Fund is starved for resources.
Discussion
Resource starvation and the policy preoccupations that create it
The conventional approach to health system development is that
foreign assistance should make itself redundant. Sooner or later
recipient countries must be able to finance health services
with their own resources. Adopting this approach to the
"sustainability" of health services in low-income countries is a
recipe for failure. [10] In 37 of the world"s 54 low-income
countries, as defined by the World Bank, public health
expenditure was less than US$10 per person per year in 2004 [11] û
as against the US$40 per person per year cost of an adequate
package of healthcare interventions, including AIDS treatment, as
defined by the Commission on Macroeconomics and Health (CMH).
The Global Fund has abandoned this conventional approach, in
favour of a new form of sustainability that relies on a
combination of domestic resources and predictable, open-ended
foreign assistance. ...
This paradigm shift was essential, and should extend beyond
priority disease programmes focused on AIDS, tuberculosis and
malaria. Advocates for improved general health services should
organise around this new paradigm of sustainability and
additionality, and insist that donors do so as well. Donor failure
on this point is one reason that general health services remain
catastrophically under-funded, according to a range of observers
who may agree about little else.
The limits of the vertical approach
...
AIDS treatment cannot be provided in isolation from health
systems. A vertical approach works for a while, and then it hits
the ceiling of insufficient health workers and dysfunctional
health systems, particularly in countries with high HIV
prevalence. [14] Africa alone needs well over a million new health
workers, [15] including 427,500 full time equivalents for
universal access to AIDS treatment alone,[16] which will require
expanded health education systems, in-service training systems,
human resource management, skills and task shifting, and improved
supervision and referral systems. Wages and working conditions
must be improved across the board to retain health workers
and to stop external and internal brain drains. In addition,
there are growing calls for greater programme integration between
priority diseases initiatives and underlying health care delivery.
Because priority disease prevention and treatment requires greater
coordination between health services focused on co-morbid
conditions and on reaching different populations, and because
priority disease programming depends ultimately on the vitality of
the underlying health systems, priority disease programming must
become increasing diagonal in order to be effective.
Against this background, it seems logical to argue that foreign
assistance should support a diagonal approach, rather than a
purely vertical or purely horizontal approach. In practice,
strident advocacy for purely vertical or horizontal approaches may
encourage destructive competition for resources of the kind
exemplified by claims that: "HIV is receiving relatively too
much money, with much of it used inefficiently and sometimes
counterproductively." [17] Instead of competing, diagonal funding
would follow the new realities of AIDS programming, which is
becoming increasingly diagonal both in terms of integration and
coordination with other disease programmes, with sexual and
reproductive health, with child and maternal health, and in terms
of strengthening shared health systems, e.g., labs, procurement
and supply management, patient information, and human resources.
In sum, diagonal funding expands resources for health system
strengthening.
How and why the IMF gets in the way
Integrating disease-specific interventions into general health
services is easier said than done. Bosman describes how Zambia"s
tuberculosis control programme suffered immensely because of
rapid integration into general health services. [18] ...
The current policies of the International Monetary Fund (IMF)
present a major obstacle to expanded spending. Although the IMF"s
importance as a lender of last resort is declining, it must still
sign off on a country"s macroeconomic policies before a country
is eligible for various forms of development assistance, including
debt cancellation under the Multilateral Debt Relief Initiative
(MDRI). The IMF"s signoff is also regarded as a valuable seal of
approval by foreign investors.
Although the religion of sustainability based on domestic
resources has many believers, the IMF is its high priest. The
IMF"s assumption that development assistance is, at best,
temporary and precarious and its scepticism about "fiscal
expansion" have important consequences for health systems, notably
in terms of ability to hire badly needed health professionals.
...
As the domestic primary deficit is calculated as government
revenue excluding grants, minus current expenditure, it is in
effect a ceiling on the use of general budget support or health
sector budget support. [20] ...
The diagonal approach: a way into the future, at a price (worth
paying)
Health GAP, the Global AIDS Alliance, and many other AIDS
activists have long urged the Global Fund to support the hiring
and training of an expanded health workforce, argued for broader
measures of health system strengthening, and supported the
integration of sexual and reproductive health and child and
maternal health services with AIDS treatment. A more ambitious
alternative to destructive polarisation between vertical and
horizontal approaches is gradually to turn the Global Fund into
a Global Health Fund, which would require that the Global Fund"s
resources be expanded significantly. To ôconsolidate towards a
global health fund with one health sector funding channelö was
suggested by Tore Godal, special advisor to Norway"s Prime
Minister as one of the options to implement the Deliver Now for
Women + Children campaign, [27] and already elaborated by one of
us as in terms of "World Health Insurance". [11] ...
Such a Global Health Fund would need to disburse about US$28
billion per year, assuming for purposes of argument that it did
not fund any programmes in countries where per capita public
health spending exceeds US$40. The CMH estimate of US$40 was
calculated to cover a set of priority interventions with the
infrastructure necessary to deliver them, but not the costs of
training new personnel, preventive programmes like family
planning, emergency care or referral hospitals. If anything, it
is a conservative estimate, especially in light of new resource
needs estimates for HIV/AIDS, tuberculosis, malaria, child and
maternal health, sexual and reproductive health, and human
resources for health and health system strengthening.
...
A Global Health Fund is therefore feasible, but only if donor and
recipient governments are willing to abandon the conventional
approach to sustainability, and only if this Global Health Fund
is not subjected to IMF policies. (In theory, the latter should
not be a problem, as the unpredictability of foreign assistance is
the main purported justification for the IMF"s conservatism about
letting recipient countries spend it; foreign assistance from a
Global Health Fund should be perfectly predictable.)
A Global Health Fund receiving and disbursing US$28 billion per
year would require several times the annual funding level of
US$6-8 billion for which the Global Fund is currently aiming. [6]
The Global Fund"s replenishment meeting in September 2007
resulted in a disappointing US$9.7 billion commitment for three
years: a little bit more than US$3 billion per year. [29] Total
annual foreign assistance for health is estimated at approximately
US$12 billion in 2004, [30] and while it is possible that some
of these contributions would flow instead to an expanded Global
Health Fund, the proposal made here would require a ten-fold
increase in commitments to the Global Fund. Knowing that foreign
assistance for health rose from US$2 billion in 1990 to US$12
billion in 2004 [30] - a six-fold increase in total annual
foreign assistance - allows for some optimism.
Such a transformation would have to go through a transitional
phase of diagonal financing coupled with diagonal programming, as
discussed above. Diagonal financing would help finance the
disease-specific AIDS, tuberculosis, and malaria programming that
is required, it would help fund increased programme integration
and coordination, and it would contribute to strengthening
underlying health systems.
Conclusion
The eligibility of comprehensive country health programmes for
Global Fund financing provides an opportunity and a threat. If
such eligibility allows expanding health workers, increasing
programme integration, and enhancing supply systems, laboratory
systems, and management systems, then the Global Fund could
simultaneously achieve its disease-specific and health system
strengthening purposes. But if the Global Fund"s diagonal
intentions were undertaken without additional and sustained
contributions or if a diagonal approach could not continue to
bypass IMF policies, the Global Fund could be sucked into the
swamp of past failed health development efforts.
Against this background, reservations are in order about IHP+. As
Christopher Murray, Julio Frenk and Timothy Evans diplomatically
observe: ô[T]he probability that these complex efforts will have
a major impact on the behaviour of donor agencies and their
interactions with developing countries will be greater if they
come with new resource commitments.ö [31] In less diplomatic
words: this new global campaign looks like a rabbit-in-a-hat
trick, sans rabbit.
Summary
IHP+ and the Global Fund"s commitment to support this new
initiative(s) and their aim for comprehensive country health
programmes, provides an opportunity and a threat.
The opportunity is that the Global Fund"s exceptional features -
its aim for international sustainability, rather than in-country
sustainability; and its capacity to circumvent spending
restrictions imposed by the IMF û could be extended to the
improvement of health systems, and no longer be limited to
disease-specific interventions. The threat is that the Global Fund
might lose these exceptional features in the process of becoming
a Global Health Fund.
Rather than preserving its vertical financing approach, and rather
than shifting overnight to a horizontal financing approach, the
Global Fund should adopt a diagonal financing approach to support
increased diagonal programming. But if the Global Fund"s diagonal
intentions were undertaken without additional resources and
without preserving long-term, sustained foreign assistance and if
a diagonal approach could not continue to bypass IMF policies,
the Global Fund could be sucked into the swamp of past failed
health development efforts.
AfricaFocus Bulletin is an independent electronic publication
providing reposted commentary and analysis on African issues, with
a particular focus on U.S. and international policies. AfricaFocus
Bulletin is edited by William Minter.
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