Joseph Kutzin, Coordinator

Health Financing Policy, WHO

Fiscal Space, Public Financial Management, and Health

Financing

26-28 April 2016, Montreux, Switzerland

Raising revenues while

managing expenditure

growth: a balancing act for

sustainability and transition

2 |

1. Sustainability: two sides of the coin

Domestic revenue

mobilization (DRM)

Expenditure

management

More Money for Health

More Health for the Money

3 |

Growing attention to financial sustainability

and transition from aid

Recognition of limits of donor funding, especially given

global financial / economic situation

– Refining how aid is targeted, e.g. Development Continuum,

Equitable Access Initiative

– Addis Ababa Action Agenda: strengthen domestic tax systems,

crack down on tax avoidance, illicit flows

4 |

Response of global health community has

largely focused on revenues

Targets like $86/capita or 5% of GDP

Growing number of health programs and partners

exploring the same issues

– Domestic resource mobilization, “innovative financing”, donor

funding, investment cases…

– …for sustainability of their program (HIV/AIDS, NCDs, NTDs,

nutrition, RMNCAH, TB, malaria,…)

Although many are explicit about integrating with overall

health financing strategy (e.g. GFF, HIV strategy)

5 |

Some concerns

Insufficient differentiation between global advocacy and

how to approach finance/revenue issues at country level

– Global “gaps” may be useful for fundraising, but not clear that

this is a useful way to engage national finance ministries

– We can’t (or shouldn’t) be arguing that every important disease

needs its own tax and revenue stream

Sustainability is not only a revenue question; we have to

think about managing expenditures better

– “Can’t just spend your way to UHC”

6 |

Clarity on policy objectives

Health financing and related reforms should improve…

– Equity in the use of services relative to need

– Quality

– Financial protection

– Health outcomes

– Equity in funding the system

– Efficiency (in organization, service delivery, administrative

arrangements, …)

– Transparency and accountability

7 |

Interpreting “sustainable health financing”

from a health policy perspective

Fiscal sustainability applies to the public sector as a whole

– Changing resource allocation priorities can change extent to

which something can be “sustained”

– So it’s a bit slippery at the level of one sector, and even more so

for sub-sectors

Concept is not useful without reference to what you are

trying to achieve

– If budget balance per se is an objective, then just cut the budget

– So what are we trying to sustain? Sustainability is not

meaningful without reference to policy objectives

B A

Le

vel of goal att

ain

ment

Level of resource inputs

maximum attainable for

given resource input level

Adapted from P. Travis

An efficiency agenda is central to the ability of

governments to sustain progress on their

coverage goals

9 |

3. Bringing a “UHC perspective” to these

issues

10 |

What a “UHC lens” can bring to these

issues

Unit of analysis is the system, not the program or single

disease

– Assess progress at level of population, not for “scheme

members” or program beneficiaries

On revenue side, see health as part of overall public sector

– Focus on overall tax/revenue strengthening efforts

– Avoid fragmentation and “intra-competition”

Similarly with efficiency, need a whole system, whole

population unit of analysis

11 |

An opportunistic approach to “transition”

What’s real: many countries can expect a decline in aid

Therefore, countries need to:

– Strengthen domestic resource mobilization

– Improve efficiency to get more from the money they spend on

health

Whereas in those countries not experiencing transition…

– strengthen DRM and improve efficiency

Let’s use the momentum attached to transition to

reinvigorate efforts to do what we should be doing anyway

12 |

Essential to be clear on what are we trying

to sustain

Neither “health programs” nor even “health systems”

– These are means, not ends

Aim of policy is to improve performance (mix of health

system goals, as e.g. embodied in UHC) to the extent

possible subject to the constraint of living within our budget

Therefore, what we want to sustain is increased effective

coverage of priority interventions

13 |

Messages and implications for action

UHC implies a system-level unit of

analysis

Transition and sustainability is not

only about revenues; efficiency matters

Efficiency ≠ cost cutting: must ensure

accountability for results

Addressing inefficiencies

requires country-specific approach