In the years leading up to the current global economic downturn, global resources for improving health grew rapidly in low- and middle-income countries. In addition to the bilateral agencies, multilateral organizations, public-private partnerships, non-governmental organizations, and development banks that previously dominated the international aid scene, several new global health players have emerged, including the Bill & Melinda Gates Foundation, the GAVI Alliance, and the Global Fund to Fight AIDS, Tuberculosis and Malaria.
Now, more than ever, objective, comparable, and comprehensive information on national and international financial resources from all of the different funding channels is necessary to make the best decisions about where to invest and to understand the kind of impact investments are making. While previous research on global health resource flows yielded some important estimates and findings, it did not provide comprehensive and systematic estimates of development assistance for health (DAH) over an extended period of time.
The Health Financing research team tracks these different financial streams to estimate DAH from 1990 to the current year. We also examine how public resources for domestic health spending relate to incoming development assistance from external sources, track national aggregates of private expenditures on health, and research the composition of resources that are relevant to policymaking.
We examine whether the distribution of global health resources reflects current global health priorities by classifying resources according to their disease focus, the health system function that they attempt to strengthen, the type of input, and the target population.
Key Activities
- Analyze development assistance for health from 1990 to 2010, with updates in future years
We are tracking financial disbursements and in-kind contributions to improve health and health systems in low- and middle-income countries channeled via institutions whose primary purpose is development assistance for health. Integrating data from a diverse set of sources, IHME published its first report, Financing Global Health 2009: Tracking Development Assistance for Health, in July 2009. The second report in this series, Financing Global Health 2010: Development Assistance and Country Spending in Economic Uncertainty was published in November 2010. IHME will continue to update the series annually, with the next report expected to be published in fall 2011.
The fiscal crisis and ensuing economic slowdown appear to be contributing to a slowing of the rate of growth in DAH. Our preliminary estimates show continued growth through 2010 to a total of $26.87 billion by year’s end, but the rate of growth was cut by more than half, from an annual average of 13% between 2004 to 2008 to 6% annually over 2008 to 2010. Donor governments continue to drive the increase in DAH. The US government alone made up nearly one-third of all donor funding in 2008.
- Undertake subgroup analyses of diseases, systems, budget support, and sector-specific support
Using data we collected for the analysis of total development assistance for health, we are conducting subgroup analyses to take a closer look at how funds are spent, such as examining health resource allocation by disease, how much is spent on general budget support, and how nonhealth sectors are affected.
- Assess donor transparency and accountability
Timely and dependable information on funds from all major donors is an essential element of evidence-based policymaking. It is also necessary for monitoring whether donors are honoring their commitments, to increase coordination between donors, and to foster greater transparency in aid reporting. Unfortunately, existing data systems lack the transparency needed for providing sufficiently detailed and timely analysis. IHME will assess the transparency of development aid and activity reporting systems and contribute to ongoing efforts to improve their quality.
- Compile and analyze government health expenditure data; establish international aid impact on national health spending
IHME’s work on health financing also includes tracking national public expenditure, focusing on the money spent by local and national governments on health. Our researchers, in collaboration with the World Bank and World Health Organization (WHO), have examined public budget information to analyze how much money governments allocate to health, how the health sector budgets have changed over time, and how changes in government spending on health relate to incoming aid for health from external sources.
Additionally, we have looked at how much money for health comes directly from the government’s national budget versus how much the government receives from an external funder to spend on health or other sectors. Understanding the impact of development assistance on national health spending is particularly important to funders. IHME’s goal is to produce results that will illuminate the intricacies of this relationship. Our first publication on the relationship between DAH and national health budgets, Public financing of health in developing countries: a cross-national systematic analysis, was published in The Lancet in April 2010.
Commitment to health in the developing world grew dramatically over the past two decades. Governments of developing countries increased spending on health, including both domestic spending and DAH. However, in countries whose governments receive significant DAH, health aid appears to be partially replacing domestic health spending instead of fully supplementing it.
- Improve time series data on government health spending
We are working to improve time series data on government health spending and total spending, drawing upon country budgets, audited financial statements, and existing data reporting systems. Where data are missing, we are developing the most accurate and reliable methods for filling in the gaps to produce as complete a set of time series budget data as possible.
- Develop methods for forecasting health expenditures
To better understand trends in DAH and government expenditures for health, IHME researchers have developed novel methods to predict expenditures on health before the data are available. These predictions are critical in understanding how the recession has affected health spending. The results from this analysis were published in Financing Global Health 2010: Development Assistance and Country Spending in Economic Uncertainty.
- Research worldwide private health expenditures
We aim to create national-level estimates for total privately-sourced health spending and private health spending as a percentage of total health expenditure for every country over the period 1980 to 2010. We will also explore the relationship between health spending as a percentage of total household spending and levels of wealth based on the permanent income or assets of households and create cross-national estimates of households’ capacity to pay, defined as total consumption expenditure net of subsistence expenditure, in order to track catastrophic health spending as it affects different populations.
Our research explores private health expenditure in countries worldwide from 1980 to 2010. Primary data sources for this project include over 1,300 household surveys that contain data on health and other household expenditures, income, total expenditures, assets, and access to services. According to the 2010 World Health Statistics, the WHO estimates that private health spending in 2007 represented 40.4% of total global health expenditure (with great variation among countries), of which 43.9% represented out-of-pocket spending. A 2004 paper by Van Damme et al. found that high out-of-pocket spending will increase the probability of catastrophic health expenditure. Xu et al. (2003) found that this can push households to high levels of debt, poverty, or both.
Impact
The work by the Health Financing research team has generated widespread interest from policymakers and development experts in the US and around the world. Our research has been presented, discussed, and disseminated in venues as diverse as the US House Committee on Foreign Affairs, a White House task force on the Global Health Initiative, the Global Health Council, Imperial College London, the Council on Foreign Relations, and the World Bank.
We anticipate increased interest in this topic as governments and private organizations are likely to face a difficult fiscal outlook in the near term. Policymakers need comprehensive and timely analysis on global health financing to make informed decisions on funding critical health initiatives and allocating domestic resources to health. We expect our work in private health expenditures will raise widespread interest among experts and policymakers on the question of how much private citizens pay for health in various countries.
