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After a year-long period of upheaval and reform, the Board of the Global Fund for AIDS, TB and Malaria today named Mark R. Dybul as its new Executive Director.

As Dybul takes the helm, there may be a temptation to declare victory and take a well-deserved rest from the busy and sometimes brutal year of changes at the Global Fund. In addition to significant staffing, fiduciary and financial reforms during 2012, the Fund also launched a new process for grant proposal preparation and a new mechanism to allocate resources among recipient countries, denominated the “new funding model”.  Together, these changes have won back the confidence of many of the Fund’s donors and stakeholders.

To consolidate these gains, however, Dybul should consider four reforms –many recognized as problems in the Global Fund’s own five-year evaluation- that are essential to the Fund’s future, namely:

(1)    Define and measure performance better: The Fund’s headline measures of performance – such as the numbers of bed nets distributed, community-based activities done, people receiving ARV – are inconsistently defined and reported by recipients themselves, have no denominators, and are clearly double-counted. In some cases, they may not have anything to do with use of these key interventions by target populations and with disease impact. Local Fund Agents –mostly audit and accounting firms such as KPMG and PriceWaterhouseCooper–are asked to check data quality, and look into the consistency of documentation in only eight or so facilities selected non-randomly, a process that just wastes money without generating useful information. While acknowledging that these measures have been used extensively for advocacy, it is time to recognize that these kinds of number counts cannot be described as impact, cannot be used for performance-based funding, and will ultimately do a disservice to the efforts of recipients and the Fund to reduce disease and improve coverage of key interventions among those in need. Instead, a core set of essential coverage and outcome indicators, chosen selectively, measured rigorously and independently (and ideally agreed with UNAIDS and PEPFAR) is necessary .

(2)    Connect funding to performance: The Fund’s current performance-based funding system does little to connect financial resources to performance. Results from our forthcoming analysis indicate that phase 2 disbursement amounts have no significant relationship with phase 1 scores. The Fund’s complex multi-step system for calculating grant scores cannot be replicated outside its offices, has large subjective and discretionary components, and recipients have little sense of how and why a certain score has been assigned. If we hope to transmit financial incentives for better results to recipients and create opportunities for accountability within countries via Country Coordinating Mechanisms or otherwise, money has to follow and reward improvements in performance. Performance needs to be measured more simply.

(3)    Assure that most funding goes to interventions and products that will make the most difference: Many recipients and funders continue to allocate resources to interventions and products that do not represent good value for money, or that have unknown effectiveness. Further, they deploy these interventions and products in a manner that sometimes disregards the dynamics and distribution of disease at the national and subnational level. We are now fortunate to have access to a decent albeit imperfect set of systematic reviews of prevention, diagnostic and treatment interventions, and can now act to move most money to those interventions that are most likely to be effective at scale. For everything else above a certain level of spending, the Fund can encourage or require impact evaluation and health technology assessment to identify best value interventions and products for the future. To tailor intervention mix to local disease dynamics, at least priority countries can collect data and simulate the impact of an efficient intervention mix, thus generating an ex ante model of impact and feasible performance targets. Though the new funding model that allows for more frequent review by the Technical Review Panel (TRP) and more proactive engagement with country applicants should help, guidelines and safeguards are needed to make it easier to optimize a grant’s investments.

(4)    Create incentives for efficiency in delivery: As commodity costs fall, other expenses associated with service delivery drive costs and efficiency. Initial analyses in one country by CHAI and CGD colleagues suggests that the level of spending on an ARV person-year above the facility treating that patient is substantial. Yet, improvements in the efficiency of service delivery can only be achieved by recipients themselves in implementation. The Global Fund’s role is then to create incentives for efficiency in implementation, using its tools of measurement, payment and evaluation. Benchmarking service delivery unit costs (as done by PEPFAR in its expenditure analyses), end-use verification of actual facility performance (as done by the President’s Malaria Initiative), performance-based payments (as done by the World Bank’s results-based trust fund), and impact evaluation (as done by the Millennium Challenge Corporation): all these are inspiring and feasible examples of ways to promote greater efficiency in delivery. The Global Fund can adapt and adopt these same tools to improve results.

These preliminary recommendations build off our own year-long effort at CGD to understand the Global Fund, and its place in the pantheon of global health funders, as well as the Fund’s own evaluation and the work of many experts and academics over the years. Our working group on improving value for money among global health funders will sift through the evidence and come to its own conclusions and recommendations in early 2013. Other ideas on Global Fund reforms from a variety of prominent thinkers and practitioner in the field can be found at the Center’s Global Fund Forum.

In the meantime, I hope that Ambassador Dybul will make reform 2.0 his own.

The author thanks Victoria Fan, Catherine An, and Kate McQueston for their contributions to this blog.