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Health financing in Africa: Can we fill the gaps?. Health Systems Research Symposium Laurel Hatt, MPH, PhD Health Systems 20/20 Project, Abt Associates Inc. Objectives. Review the current health financing situation in sub-Saharan Africa Analyze projected future financing gaps
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Health financing in Africa: Can we fill the gaps? Health Systems Research Symposium Laurel Hatt, MPH, PhD Health Systems 20/20 Project, Abt Associates Inc.
Objectives • Review the current health financing situation in sub-Saharan Africa • Analyze projected future financing gaps • Highlight policy recommendations that emerged from recent expert consultations
Data and geographic scope • Data sources: • Health expenditure and population data from the WHO’s Global Health Observatory (2007 data) • GDP per capita from the IMF’s World Economic Outlook database • Geographic scope: • 40 countries in sub-Saharan Africa • Excluded South Africa and 5 countries with populations < 1 million
Overview of health financing indicators in sub-Saharan Africa today • Average per capita spending on health: $41 • Lowest in the world • $33 if Nigeria excluded • Private spending: 60% of total • Out-of-pocket spending: 83% of private spending
Out-of-pocket spending accounts for 50% of total health spending in SSA
Indicators for adequacy of resources for health • Commission on Macroeconomics and Health (2001): $41/person in current dollars • WHO High Level Taskforce on International Innovative Financing for Health Systems (2009): $54/person to meet health MDGs • Abuja target (2001): 15% of government spending
Hypothetical levels of total spending if the Abuja target were met today
Most poor SSA governments will not meet the $54 target by 2020, even with optimistic assumptions Assumptions: --Total government expenditures increase by 5% per year --Governments increase health spending by 1 perc. point per year until they reach the Abuja target --2% population growth or less
Adding in spending from households and other private sources
Summary • Compared to other regions, SSA has the lowest health spending levels and heavy dependence on out-of-pocket financing • Even with optimistic assumptions, financing gaps are unlikely to be closed in the medium term • Low per capita incomes in Africa • Limited ability to collect taxes – small formal sector • Donors already contribute 13% of total spending • Health systems bottlenecks – low absorptive capacity, low budget execution
Can we fill the gaps? • What are the “best bets” for increasing resources for health and leveraging existing health spending in sub-Saharan Africa? • Roundtable discussion among experts convened by Health Systems 20/20 and Results for Development’s Health Financing Task Force • Experts from World Bank, Brookings Institution, Georgetown University, IMF, UNICEF
Approaches to consider • Leverage the private sector • Increase access to capital, promote investment, improve regulation • Explore new global health taxes • Support innovative financing mechanisms to get new technologies to the market • Improve efficiency of donor spending – coordination, on-budget spending • Strengthen governance and public financial management • Develop and strengthen health insurance systems • Implement results-based financing
Thank you! “Toward Solving Health Financing Challenges in Africa – A Way Forward” is available at www.hs2020.org