January 21, 2011
by Jeremiah Norris
Dr. Cristian Baeza, World Bank director for health, nutrition and population, attempted to answer that question at a CSIS presentation on January 10. His short answer was, “no”. He commented that global funding for health increased from $8 billion in 1996 to $24 billion in 2008.
He went on to express his views about challenges facing the global health community, such as:
On item (2) above, the UNAIDS Global Report for 2010 found that for AIDS programming alone, domestic spending within developing countries is now 52% of total expenditures.
Dr. Baeza discussed the fact that donor funding relative to out-of-pocket health spending in the private sector is relatively small and the latter should be placed into risk pools for insurance schemes. This follows a WHO 2010 recommendation, illustrated below, on ‘universal coverage’ that these funds can be administered more appropriately in publicly-sponsored prepaid insurance programs.
Perhaps Dr. Baeza’s most interesting comment was that “an investment in health is an investment in economic growth.” He followed this up by saying that “he has yet to see an engagement on health financing from ministries of finance and the countries themselves.”
If such an engagement was feasible, it would seem that its provenance should have been an outcome of the WHO sponsored study in 2001 on Macroeconomics and Health: Investing in Health for Economic Development. Instead, although global health resource flows increased substantially in the following years, it was all in consumption spending rather than investments in locally owned and operated infrastructure, such as medical schools, academic research facilities, diagnostic centers, and centers of excellence in disease prevention and treatment. Has any bilateral or multilateral donor created any health institution in the development world that did not exist before? Rather than leading the way forward from 2001, the WHO study proposed, as Dr. Baeza noted above, a past remedy: pour ever more money in and stir.
The metric for successful global health initiatives is … obtaining more money this year than last year. Money is used as a product for consumption when experience should have informed us that it needs to be a medium with a command power to create something of value between partners that is not now evident. Why, in a whole world of opportunity did WHO and Dr. Baeza find problems in which solutions are found only through the application of more money? This ensures that donor-sponsored health inputs will always represent a welfare activity.
Dr. Baeza then posed a question about donor health activities, saying: “are we perfect, no, perfect is expensive.”
That answer is a reflection of a long-standing World Bank notion on the quality of drugs being financed through its grants or loans, stating: “the perfect cannot be the enemy of the good”.
But is the good an enemy of the poor? That question isn’t asked.
The notion allows UN-agencies such as WHO, the Global Fund to Fight HIV/AIDS, TB and Malaria, and UNAIDS to procure antiretroviral therapies that haven’t been approved by any regulatory authority. By definition of those same authorities, such drugs are substandard and constitute a leading cause of drug resistance. While there can be no doubt that the use of substandard drugs permits coverage with more AIDS patients, it also sets in train a migration from inexpensive lst line therapies to the more expensive 2nd line therapies. In a July 2010 report to the Congress, PEPFAR found that this increased annual cost per patient from $754 to $1,745.
A July 2010 study by the Center for Global Development reported that “about 22 percent of AIDS patients switch to second-line therapies after an average of 20 months on first line therapy.” Of the approximately 5.4 million patients on ARV therapy, this would translate into an estimated 1.2 million that have become drug resistant on lst line drugs.
Can this increased cost be among the reasons why donors are flat-lining their AIDS commitments?
Lastly, Dr. Baeza stated that are investments in health are central to economic growth. This ignores the experience of South Korea, once the basket case for international donor assistance. In the 1960s, the 70s and most of the 80s, it expended less than 3% of its GNP on national health activities. Today, it is a donor nation and the newest member of the OECD.
At the recent G20 meeting in Seoul, the president of South Korea tried to frame the discussions around a theme that was central to his country’s membership in the community of nations, saying: development occurs through economic growth rather than through aid.
Unfortunately, his message was lost amid the diplomatic communiqués which followed the meeting, stating that the G20 sessions were marked by ‘constructive dialogue’.
Jeremiah Norris is a Senior Fellow and Director of Hudson Institute's Center for Science in Public Policy. He specializes in public-private partnerships in development assistance, trade and development, and global AIDS, tuberculosis, and malaria policies.
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