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The Survival of “Global Health” - Part Two: The Future of Global Health Funding

Posted on by Laurie Garrett

There was a time, Children, in the not-so-distant past when the World Health Organization (WHO) was in charge of everything. On a mountain overlooking Lake Geneva, the palace of global health stood, its imposing multi-storied lobby offering a view of Mont Blanc and the Alpine range. No other entity came close to the mighty power and imposing budget of the great WHO, born in 1948 when the world was divided between communists and capitalists.

Source: Nature

Source: Nature

By 1990 the WHO decided everything, from what age babies ought to get measles vaccines to how many scientists needed to accompany a disease outbreak investigation. It was, Children, the global hegemon of health.

That was then, but this is now:

Source: Nature

Source: Nature

The blue arrows represent my best guesses on where funding is likely to end up by mid-2014. The three wild cards are the Global Fund (GFATM), which may get a $15 billion boost in its replenishment round in October; the U.S. government (USA), which is wildly unpredictable at this time; and the European countries (EC), some of which have signaled willingness to augment current support for global health despite the exigencies within the EU. The very pessimistic view displayed above could, therefore, end up in marginally better condition. But none of the forecasts end up with a financially stronger WHO.

Thus, the architecture of Global Health has been completely remade since 1990, though not through any process of collective wisdom. Money – what donors were willing to support, in large part due to sophisticated advocacy and activism – has reshaped all health priorities. If the U.S. government budgets for USAID, then CDC, PMI and/or PEPFAR take significant hits in the ultimate FY 2014 budget, and the Washington political atmosphere remains toxic through the FY 2015 budget battle, the architecture could end up with the Global Fund budget equaling, or exceeding, United States programming budgets – a power shift nobody would have forecast even a month ago.

(In a coming blog post I will look at what this architecture means for actual Global Health programs and goals.)

Since 2008 there has been much debate about where agencies, NGOs, programs and countries might turn to for sustainable funding. One thing is very clear: Global Health, including HIV, no longer enjoys the fad-like enthusiasm that made it a darling in venues like the World Economic Forum, TED, and Aspen Ideas Festival. The entrepreneurial nouveau riches that once wrote large checks for e-health cell phone programs urging Africans to get HIV tests have moved on to other causes. The relative ease of garnering financing for malaria bed nets or innovations in drug distribution that NGOs and agencies experienced in 2005 has yielded to tough slogging for basic bucks in 2013. This will not improve any time soon.

For ministries of health and country-based health programs this shift ushers need to look to domestic sources for support. South Africa is the first significant aid recipient to set a goal for complete health self-reliance, and actually meet most of its targets en route.

Sadly, few underdeveloped countries in the world today have vast untapped reservoirs of untaxed revenue. Outside of Europe and Latin America, country-derived income tax potential is minimal-to-nonexistent.

Increased taxation of the super-wealthy, regulation and tough collection from tax havens, and elimination of corruption collectively represent trillions of dollars of untapped revenue potential, but few governments show appetite for venturing down such political paths, fraught with powerful conflicts. Last year the Oxford Policy Management group surveyed a range of potentials for innovative financing for the UNAIDS Program. Among the low-hanging fruit the agency found were revenues based on taxation of tobacco and alcohol products.

Combined with a package of new taxes on everything from cell phone use to plane flights, alcohol and tobacco levies could garner African countries an additional $15.5 billion. Two obstacles obviously stand in the way: The political will for governments to implement what undoubtedly would be unpopular use taxes, and the monumental fights within government over allocation of those revenues. Just because a country gleans a fresh $1 billion from such taxes by no means assures the government will allocate most, or even any of it, to health programs.

Some hope has been directed toward the BRICS countries, imagining that China, India, Brazil, Russia, and South Africa will step into the fray and cover the billions of dollars’ worth of unmet health needs. Though some BRICS advocates claim that China, in particular, has reached the major donor stature, the truth is quite to the contrary. If company investment and resource-extraction related efforts are deleted from the BRICS “foreign aid” pile (as they are for other donors), few aspects of their efforts can match the impact of tiny, bankrupt Cuba’s global health program. Brazil’s major contributions to Global Health have been diplomatic, in its engagements for tobacco control and in opposition to the World Trade Organization provisions on pharmaceutical patents. India garners great wealth from its engagement as a generic drug manufacturer, but remains a net recipient of aid (though aid equals less than two percent of India’s health budget). Some have suggested the BRICS would be more inclined to act as health and development donors if one of their own controlled the World Bank, or an alternative BRICS Development Bank were created. Russia’s commitments to health have rarely met with genuine disbursement. As my colleague Yanzhong Huang has long argued, China – and the BRICS, generally – have tough domestic health issues that must first be addressed, lest opposition from their own people stands in the way of foreign aid for health.

The Bill and Melinda Gates Foundation estimates African countries need $165 billion annually for roughly the next decade in order to meet their MDGs, build up their health systems, and reach health self-reliance. Some countries could make such a goal in less than a decade, some might be in such poor infrastructural shape now that a twenty year time span makes more sense. Regardless, it is a lot of money. The Foundation offers a list of innovative financing schemes that might generate those lofty sums, overlapping with those suggested by the Oxford group. Politically, the same obstacles stand in the way.

Levies on global financial transactions of various kinds have been suggested, but international political obstacles are even taller than those within countries. Moreover, some European countries jumped on the finance tax idea as a way to retire their own national debts, pushing Global Health and development to the side. Many worthy causes are vying for world finance tax attention, including climate change adaption, world food security, poverty reduction and various, sometimes competing, global health efforts. As is the case for in-country new levies, there are no guarantees that a war over monetary exchange and financial transactions levies, if won, would generate much, or anything, for Global Health.

This week, as members of the World Health Assembly study the sober budget proposal for the WHO, it is wise to ask where will funds come from next year, and the next, and the next? Transformation of entire social contracts between governments and their people to achieve such targets as universal health coverage, guaranteed 24/7 health services for all, 100 percent safe deliveries for all babies and moms, and wellness programming requires planning. And planning requires predictable funding.

Where will that predictable funding come from?

Tomorrow’s Post: Why the World is so Wealthy, But Your Life Feels Otherwise: Significance for Global Health