As the Seventh Replenishment conference looms closer, attention of the Global Fund and its partners is on the pledges being made in support of it. Yet the biggest contribution, according to the Investment Case, is the $58.6 billion or 45% of the investment requirements to fight HIV/AIDS, TB and malaria (including strengthening health systems and pandemic responses), estimated at $130.2 billion over the three-year period 2024-2026, that is expected from domestic resources (see our article on the
Investment Case: Is it enough?
Published earlier this year). Is it reasonable to expect national governments to be able to contribute so much in an era of unprecedented financial hardship? This article explores the different ways in which developed countries try to assess what their poorer neighbours should be contributing to their own health budgets and whether or not, twenty years after the Abuja Declaration, these are still fit for purpose.
Background
In April 2001, the African Summit on HIV/AIDS, Tuberculosis and Other Related Infectious Diseases was held in Abuja, Nigeria.  At the conclusion, African governments made a number of formal commitments including to take all necessary measures to ensure that the needed resources are made available from all sources and that they are efficiently and effectively utilized.  In addition, they pledged to set a target of allocating at least 15% of their annual budgets to the improvement of the health sector. At this same meeting the African governments supported the establishment of the Global Fund. Sometime later, it became usual for government expenditure on health also to be measured as a percentage of gross domestic product (GDP), especially in the context of measuring progress towards universal health coverage (UHC).  For example, a Cambridge University article published in 2017 states that “An explicit target for government expenditure on health care relative to GDP is a potentially powerful tool for holding governments to account in progressing to UHC, particularly in the context of UHC’s inclusion in the Sustainable Development Goals. It is likely to be more influential than the Abuja target, which requires decreases in budget allocations to other sectors and is opposed by finance ministries for undermining their autonomy in making sectoral budget allocation decisions” and went on to say, “Our analyses point towards a target of government spending on health of at least 5% of GDP for progressing towards UHC.” Also, the African Scorecard on Domestic Financing for Health information page states that “It makes little sense for smaller and larger economies to have the same US$ per capita target.  Governments should therefore also spend >5% of GDP on health.” A third measure for health expenditure is an absolute per capita target.  Two such targets were developed based on estimates of the resource requirements that low- and lower middle-income countries would have to meet in order to provide a set of core primary health care (PHC) services: (1) the Commission on Macroeconomics and Health (CMH) in 2001; and (2) the High-Level Taskforce (HLTF) in 2009. The CMH estimated that by 2015, the per capita resource requirements in low-income countries would total $38 (expressed in 2002-dollar terms), while the HLTF put that figure at $54 (expressed in 2005-dollar terms) for more comprehensive services.  Interestingly, the Cambridge University article referred to above states “in our view, it would be appropriate to use $86 as the estimate of per capita resource requirements for providing core PHC services in low-income countries.” – but recall that was in 2017.  These per capita expenditure amounts are in fact of no use because health care is not just about PHC services: all levels of health care and supporting services (such as ambulances, laboratories, research centres, regulatory bodies) must be included. In 2019 the African Union set up the Africa Scorecard on Domestic Financing for Health.  The published scorecard uses the three measures of government expenditure on health referred to above: (i) Benchmark #1: Per Capita; (ii) Benchmark #3: as a % of GDP; and (iii) Benchmark #5: as a % of government budget (there is no reference to Benchmarks #2 and #4).  The 2019 scorecard shows 2016 data.  It was supposed to be updated annually but this has not happened. Articles on domestic health financing often refer to government budgets.  While the budget execution rate might be fairly high in a few countries, it is generally low in many of the countries supported by Global Fund programs.  It is also noticeable that governments do not report actual expenditure against budget and what the variance means to their health system.
Actual government health financing performance
The following table compares 2000 (immediately pre-Abuja) with 2019 government expenditure on health as a percentage of total government expenditure in African countries.  For information, all the health financing data in this article has been sourced from the World Bank online database.

In 2000, two governments were already spending over 15% of their total expenditure on health.  By 2019 there was only one country – South Africa – while 21 governments were actually spending a lower percentage than in 2000.  So much for the Abuja commitment. Turning to the GDP comparative measure, the proposed target has been said to be appropriate for countries across economic development levels and applicable over time. For low-income countries, this target was expected to allow for progress towards universal PHC services. As GDP increases so the 5% is expected to translate into an increase in absolute financial resources and the ability to expand the range of health services covered.  That sounds great but it overlooks an important factor that affects the demand for health services: population growth. Now is a good time to look at this measure of health financing because, due the impact of COVID-19 on health systems, the 2020 and 2021 health expenditure amounts will be not comparable with pre-2020 data. The next table presents a comparison of health expenditure as a percentage of GDP for the years 2000 and 2019.  This shows that in 2019 South Africa was, again, the only country to meet the target of 15%. You could argue that some progress was being made because 26 governments, in addition to South Africa, were spending a higher percentage of GDP by 2019.  However, given the African Union’s active efforts to encourage increased public spending on health, it is disappointing to see that only 10 governments had increased their expenditure by more than 1% of GDP while 20 governments were spending a lower percentage by 2019 and 39 countries were not even half-way to meeting the 5% target.

Now the table on the next page provides two very interesting comparisons.  First, it shows the government expenditure per capita on health in 2019 varying from $1.8 in Cameroon, which is virtually nothing, to $610.8 in Seychelles.  Note that using a purchasing power parity (PPP) comparison (in the second column of the table) makes very little change to the comparison. The second comparison is government expenditure in 2000 and 2019 as a percentage of total expenditure on health.  This reveals that, in 2019: (a) 20 governments contributed less than 25% of the total financing for health; and (b) 25 governments were contributing less to the total than they were in 2000.

Even more noteworthy: in only nine countries across the continent is the government financing more than 50% of the total expenditure on health.  Here is an example to show why this is important.  Assume a government is financing 20% of total health expenditure by spending the equivalent of 2% of GDP.  If, assuming the same level of GDP, it then doubled its expenditure (100% increase) to 4% of GDP, that would only represent a 20% increase in the total financing of health. This shows another weakness of the GDP measure: it has more relevance when a government is funding the majority of health expenditure and is of decreasing relevance as a government’s contribution diminishes. As you can see, the comparisons of the measures used by the African Union, Global Fund, World Bank, WHO and other organisations do not provide convincing evidence of real progress towards sustainable domestic financing for health. More importantly, those measures make unfair comparisons between countries. The fact is that countries vary in so many different ways.
Factors that differentiate cost levels
Look at the following table, compiled from Worldometer online data, which compares land areas, populations, population density and growth, and urbanisation across Africa:

Developing and managing a health system in a country with two people per km² is a very different challenge – with a different scale and cost structure – to a country with 525 people per km².  Also, the requirements, numbers and locations of secondary and tertiary care locations vary considerably between a country that is fairly highly urbanised – like Gabon – compared to a lowly urbanised country like Niger. Many other factors also affect the costs of operating health services.  For example, there are geographic features (certain types of mountain ranges and rivers) that make travel and communications more difficult in some countries and these add to the costs of staffing and providing treatment and medicines. For example, Ghana has a reasonably good network of roads and travel is relatively easy whereas travel across the Democratic Republic of Congo or Madagascar is far from easy and makes travel longer and more expensive. Population movements create additional difficulties for health planners and managers.  Some countries are fortunate to be relatively unaffected by these movements; but others bear an undue burden.  The following table shows the estimated number of refugees in 12 African countries in 2000.  Note that, since then, many more refugees have entered Uganda.

Last year, the United Nations estimated that there were some 18 million displaced persons in Africa and, of those, 12.5 million were internally displaced persons.  They are people in need of food, shelter and health services; but providing those services for an indeterminate period is particularly challenging when health systems are already under-resourced.  This makes it all the more difficult to make and measure progress towards UHC.
The way forward
It is time to move away from country measures and comparisons and to focus instead on what matters: securing more domestic financing for health.  However, as mentioned above, many governments are minor financiers of health.  It is unlikely that they would contemplate attempting to increase out-of-pocket payments when fewer people are today able to afford such payments. Many observers suggest that the private sector could help increase domestic financing for health.  They overlook the fact that the not-for-profit private sector is relatively very small and is dependent on contributions from domestic and foreign donors; and it is questionable whether that is a long-term sustainable system.  The larger for-profit private sector is financed by insurance payments and out-of-pocket payments.  It therefore serves those who can afford the services.  That enables the private sector to pay staff above public sector levels and why the quality of private sector facilities and services tends to be better than those in the public sector.  Meanwhile, people living in poverty are generally excluded from private sector services.  Note that the number of poor people increased in 2000 and 2001 and is continuing to increase.  The reality is that UHC cannot – and never will – be attained if reliance is placed on the private sector to raise more finance for health. To reach everyone and secure more domestic sustainable financing for health means that governments must significantly increase their contribution.  It is to be hoped that the economic advantage of doing this will outweigh their concerns about foregoing some other priorities.  However, the levels of financing relevant to the capital investment needs and running costs of the health care systems in the individual countries vary widely. Determining investment needs is difficult.  Here are some of the problems that Ministries of Health are likely to face.  Health systems (in the sense of management systems) are generally weak and, as a result, there is often inadequate information on which to formulate sound plans.  Major health infrastructure requirements vary from constructing more hospitals, clinics, laboratories and specialist stores to procuring more advanced equipment and replacing or upgrading out-of-date facilities and equipment.  Those requirements may vary across different districts/states/zones in a country and, to add to the problem of determining priorities, political and social considerations have to be factored in. Many health sector plans have been published but few show that they have been prepared on the basis of detailed costings.  And subsequent reporting has not compared actual outturns with those plans.  That needs to change. To make a convincing case for increased government expenditure, the Ministry of Health should prepare comprehensive and costed incremental health sector development plans for differing levels of available financing and which explain how priorities and their ranking have been determined. Plans must also take account of non-government sources of health financing.  This has several facets:

• The recording and reporting of out-of-pocket payments needs considerable strengthening, including the online publication of approved prices for treatment and medicines at public health facilities.
• In some countries, this means improving the regulation of and reporting on private health care services.
• Donor financing should be disaggregated from government financing and reported on separately.

Using incremental planning, the level of financing made available would determine what level in the plan can be implemented.  At the same time, the overall plan will show what has been foregone with the lower than full funding model. Finally, there needs to be improved reporting, both in timeliness and detail.  This is where comprehensive National Health Accounts could be very useful by reporting on actual outcomes against the appropriate incremental plan and should include: (a) the results compared with plan and full funding; and (b) the effects of unforeseen events such as flooding, civil disturbances, and refugees and internally displaced people’s movements. The Global Fund’s Seventh Replenishment highlights the need for increased expenditure on health.  This is a time to abandon global targets that are inappropriate at the national and sub-national level and instead concentrate on setting achievable increases in financing and outcomes and recording and reporting on progress.  Adoption of the above suggested approach would be a clear sign of a government’s commitment to increasing finance for health for the benefit of the population and to support economic growth and social development.