Co-financing feasibility, barriers and enablers: the case of Tanzania

1. Co-financing feasibility, barriers and enablers: the case of Tanzania Michelle Remme 14 December 2017, STRIVE Learning Lab

2. Background • New development agenda underscores the importance of synergistic action across 17 interconnected SDGs • Evidence from HIV response suggests that structural interventions could be effective for HIV + other health and development outcomes, but may be undervalued and under-prioritised • Co-financing or pooling HIV financing with other disease-specific and broader development sector budgets to implement interventions with multiple benefits could contribute to optimising efficiency of HIV spending, without crowding out programmes with spill-over benefits

3. Potential inefficiency from unisectoral approach Inside health package Outside health package Health benefit per $1000 1 2 3 4 to 5 6 9 10 8 7 Budget limit Health expenditures Source: Remme, Martinez-Alvarez & Vassall, 2017, Value in Health

4. Source: Remme, Martinez-Alvarez & Vassall, 2017, Value in Health

5. Co-financing across sectors could prevent welfare loss Source: Remme, Martinez-Alvarez & Vassall, 2017, Value in Health

6. Source: Remme, Martinez-Alvarez & Vassall, 2017, Value in Health

7.  Cost per HIV infection averted = $ 5,000 – 12,500

8. Background • New development agenda underscores the importance of synergistic action across 17 interconnected SDGs • Evidence from HIV response suggests that structural interventions could be effective for HIV + other health and development outcomes, but may be undervalued and under-prioritised • Co-financing or pooling HIV financing with other disease-specific and broader development sector budgets to implement interventions with multiple benefits could contribute to optimising efficiency of HIV spending, without crowding out programmes with spill-over benefits • Intra- and cross-sectoral coordination & budgeting are institutionally challenging • Study seeks to understand the institutional feasibility, barriers and enablers to adopting a co-financing framework in HIV resource allocation

9. Methods • Study design: Case study in Tanzania to elicit insights and perceptions from decision-makers directly involved in planning and budgeting • Data collection: Dec 2015 – Dec 2016 at national level • Data collection method: In-depth interviews with 20 government officials and senior advisors among key development partners in the HIV, health, social protection and food security (sub-)sectors • Study participants: Policy-makers purposively selected based on involvement in planning, resource allocation, or sector coordination • Interview guide explored principles used in resource allocation and their application to cross-sectoral programmes + perceived institutional feasibility of co-financing

10. Study Setting • Tanzania • Low-income country, deep poverty • Generalised HIV epidemic (5% prevalence) • Heavy donor dependence in social sectors, esp. HIV • Public services are financed by central and local govt • TASAF programme • Includes conditional cash transfer for poorest 10% of households • Reaches 70% of target villages • Positive impacts on: • Girls’ school completion rates • Reported morbidity • Membership of community-based health insurance • Agricultural asset ownership

11. Results (1) • Maximisingservice outputs (rather than outcomes): measured as number or proportion of people reached • Resource allocation criteria: comparative advantage, feasibility of implementation, historical allocations, reasonableness, financial guidelines, geographic focus, sustainability, cost • Ministries constrained by their ‘instrument’, or ministerial responsibilities, which limits them to interventions delivered through their service platforms • Different types of payers with different constraints: Pure purchasers Purchaser-service providers Pure service providers

12. “When the president is elected into office, he forms the government, so he gives each ministry an instrument to show their mandate (…) Even if you impact somebody else, but it’s not going to be in your objectives (…) The only Ministry which has the health instrument is [the MoH]. So [other ministries] do things which they impact health, but they don’t have that instrument.” Govt official “It is not scientifically based what we contribute in different areas (…) it also comes in politics in that process, the interest of the government of the time (…) Budget allocation processes are messy, both on our side and the Tanzanian side, and are not fully rational always” Bilateral DP “[current leadership] is very narrowly focussed, so it’s got to be all about the HIV outcome” Bilateral DP

13. Results (2) • Is co-financing feasible? • Several government officials responded positively: “Yes, it’s possible.”; “Why not?”; “You can, you can do that.” • Cases where this had already happened or was seriously being considered for TASAF (e.g. TACAIDS, UK environmental fund) • WTP concept not applied explicitly or implicitly in resource allocation, but clear understanding of WTP as opportunity cost, or alternative use of resources, and ability to pay • Decision-makers had implicit ranking of investments and sense of which they perceived least efficient • Identification of ‘least efficient investments’ not based on explicit analyses, but considered the certainty and effect size of the intervention’s impact or how costly the intervention was compared to its benefits and scale

14. “… the answer would be yes, emotionally, as a Tanzanian one person dying is one too many and you will get a yes from everybody in Tanzania. The question is can Tanzania afford it…” Govt official “That is a very unfair question (…) so if you’re asking me would you spend 350 dollars – of course I would. Would you spend 500? Of course I would. But do I have it? No. If I had it, I would spend it” Multilateral DP “I would not disinvest, rather maybe to integrate programmes and, so that we can have savings.” Govt official

15. Results (3) Enablers Barriers Limited discretionary budgets Limited financial autonomy Anticipated loss of budget control Loss of visibility and ability to justify existence / raise additional funds • Evidence of mutual gains and cost savings • Strong political will and champions/advocates • Inter-sectoral governance mechanism to facilitate and ensure accountability • Payers with population focus or strong results focus

16. “the major challenge is that the resources they get, is not even enough to meet their demand, the normal ones. That is a critical one. For example, in the area of medicine, the area of improving the services in the hospitals, they are crying. They don’t have.” Govt official “you would need buy-in at a high level, again going back to your champion. (…) a solid, very clear analysis of who is getting what and why, and then there has to be a senior decision that cascades down” Multilateral DP “I am telling you the truth it is the evidence. If it works, the modality of how we do it is not an issue” Govt official “resistance, resistance to change, resistance to… they don’t think they are going to get money, they don’t think they are going to get value, they generally think they are losing power in this area” Multilateral DP

17. Study Limitations • Views of small sample of national-level decision-makers in specific social sectors Insights from respondents were sometimes quite hypothetical, and may not be predictive of actual behaviour or revealed preferences • Role of the researcher (economist) may have led to desirability bias, Study was conducted in a decisively singular post-election context, characterised by substantial uncertainty about the new government’s priorities and some reserve among respondents • Yet, findings are unlikely to be unique to Tanzania alone • Same development partner organisations operate globally and will be influenced by similar agendas and organisational constraints • Governments in high-income countries have had to tackle related barriers and resistance to cross-sectoral coordination and joint budgeting

18. Conclusion • Cross-sectoral co-financing could be operationally feasible but would require refocusing the decision frame around achieving the service outputs of payers more efficiently • Could be operationalized as catalytic mechanism to tweak and leverage multi-benefit interventions (instead of relying on ‘mainstreaming’) • Institutional incentive structures and political factors are likely to hamper voluntary uptake, unless specific enablers in place to incentivise and mandate cost-sharing • Need for more co-financing policy experiments in LMIC to investigate: • effectiveness of these models at realising efficiency gains & multiplying impact • understand where and how they are most likely to be institutionally acceptable

19. Thank you This work is funded by Ukaid under the STRIVE research programme consortium on Tackling the Structural Drivers of HIV. The views are the authors’ alone and do not represent the organizations with which they are affiliated or those of the funders.