Health financing in Africa: Can we fill the gaps?

1. 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.

2. 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

3. 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

4. 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

5. Out-of-pocket spending accounts for 50% of total health spending in SSA

6. 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

7. Current levels of government health spending

8. Current levels of government and private health spending

9. Hypothetical levels of total spending if the Abuja target were met today

10. 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

11. Adding in spending from households and other private sources

12. 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

13. 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

14. 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

15. Thank you! “Toward Solving Health Financing Challenges in Africa – A Way Forward” is available at www.hs2020.org