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This is a joint post with Amanda Glassman and Rachel Silverman.

In this austere budget climate, generating “value for money” (VFM) is a top concern for global health funding agencies and their donors, who want the biggest bang for their buck in terms of lives saved and diseases controlled. To that end, CGD has convened a working group to help shape the VFM agenda with high impact recommendations for reducing costs, increasing impact per dollar spent, and focusing investments on the highest impact interventions among the most affected populations. Since our first meeting in April, we’ve been hard at work collecting evidence, consulting with global health agencies, and identifying the most promising areas for further investigation. The main funding agency under our VFM microscope: the Global Fund to Fight AIDS, Tuberculosis and Malaria.

We recently completed a draft background paper on the Global Fund, with particular emphasis on its resource flows, framework for funding decisions, incentive structure, and oversight mechanisms. This paper is only a preliminary step, but it’s helped us to collect our thoughts and identify priority challenges. A first impression: While the ongoing reform of the Global Fund is focused on the fiduciary and financial audit measures that came as a response to press reports on misuse of funds, the organization still faces major challenges that threaten the Fund’s vision, impact on disease, and fundraising potential and must be addressed head-on by the new Executive Director. Among the key issues:

1)      Cross-country and between-disease allocations: Where should the Global Fund allocate its money? Simply asking this question is a marked improvement on the old system, which could best be described as “first come first served.” Current allocations for HIV/AIDS, for example, appear to be aligned to disease burden to some extent (thereby incentivizing treatment), but poorly to population at risk (not incentivizing prevention). Previous decisions to accept country grant proposals did not explicitly consider the effectiveness of the principal recipients (the countries). The Global Fund has recently introduced eligibility criteria and announced a list of “high-impact countries” to receive priority funding, but it remains a work in progress. Unresolved and unaddressed: How to decide the distribution of resources amongst the three diseases.

2)      Intervention mix: The Global Fund’s demand-driven model has allowed countries to propose their own mix of interventions and products to be funded, often without consideration of cost-effectiveness or maximum impact. According to recent documents, the Fund plans to reprogram its grants toward “highest impact interventions” by engaging with countries to identify and fund these interventions, and by supporting operational research to bring them to scale. However, the organization has struggled to define the characteristics of a “highest-impact intervention,” and has never required that impact evaluation be used to assess interventions of unproven impact. Further, while the Global Fund is typically a bastion of transparency (at least in terms of the volume of policy documents made available online), data on expenditures disaggregated by service delivery area is not publicly available (even PEPFAR has begun to do this as part of its annual operational plans). Without this information, it is impossible to evaluate whether intervention choices are suited to a given country’s epidemic (“know your epidemic”) or whether funds are optimally or efficiently allocated.

3)      Measurement and performance-based funding: The Global Fund has pioneered the use of performance-based funding (PBF) as a tool for grant  management, but more can be done. Currently, grants are judged to a large extent on outputs (e.g. number of bednets purchased and number “distributed”) and to a much lesser extent on coverage or outcome indicators (e.g. proportion of children under age 5 sleeping under a bednet). Moreover, the indicators are self-reported which are particularly vulnerable to manipulation. In the Fund’s current performance-based funding approach, we’re particularly concerned about the validity of the grant ratings—especially how well the grant ratings predict payments, and what predicts the ratings. Early results from our analysis of Global Fund performance-based financing will be presented at the International AIDS conference this Sunday.

What do you see as the major challenges faced by the Global Fund? We welcome you to read our paper and provide comments and suggestions, either through this blog or by email at globalhealthpolicy@cgdev.org. Stay tuned for  upcoming blogs where we present recommendations to respond to these challenges.

The authors thank Denizhan Duran and Jenny Ottenhoff for helpful comments.