Last September, we released a report on how the Global Fund could get more health for its money. In it, we offered concrete suggestions for improvements in several different value-for-money domains, all with an eye toward maximizing the health impact of every dollar spent.
A lot can change in a year. And during a recent reread of our own report, I was pleasantly surprised by how much the Global Fund has changed for the better, particularly in how it does business. So what’s been done, and what challenges remain?
More Data-Driven Allocation
Under its old system, the Global Fund allocated its funding through a series of proposal rounds. During each round, countries could submit their requests for funding; good proposals would be approved and bad proposals rejected by an expert technical review panel until all available funds were committed.
While well-intentioned, this system was rife with problems. As we wrote in our report, “by failing to provide countries with a clear budget constraint, predictable funding windows, or rewards for efficiency, the Global Fund created strong incentives for countries to maximize their funding requests—often without considering actual need and other funding sources, or assessing their most pressing priorities given scarce resources.” Funding went to countries with the best proposals—not necessarily the countries that had the greatest need or capacity to deliver results. As a result, major differences (up to 5,000-fold!) were seen in per-case spending on HIV across countries, with no obvious justification for the discrepancies.
Fast-forward to today and the Global Fund now deploys an explicit, data-driven allocation formula to split scarce funds across countries on the basis of their disease burdens and ability to fund their own disease programs (the board originally voted to enact a formula-driven allocation approach in 2012; exact allocations for the 2014–2016 window were announced in March). As a result, funding is better aligned with countries’ respective disease burdens, and more predictable funding empowers countries to plan ahead with a clear understanding of the available resource envelope. In a new paper with Victoria Fan and Amanda Glassman, we conclude that this new “methodology is expected, but not guaranteed, to improve the efficiency of Global Fund allocations in comparison to historical practice.”
Still, the fund has experienced some growing pains during its ongoing transition to the new approach. The split of funding across the Global Fund’s three target diseases is based on historical practice rather than objective criteria, and the relatively low allocations for malaria and tuberculosis (32 percent and 18 percent, respectively) remain controversial. Within each disease area, the sources to inform cross-country allocation are inconsistent. In particular, the use of malaria data from 2000 was intended to protect countries where continued funding is required to sustain recent gains; in practice, the fund’s own technical review panel worries that “allocation amounts … may no longer reflect the most strategic investment of resources.” Finally, during the first wave of New Funding Model proposals, confusion about the role of “incentive funding” and competition for its allocation proved a major distraction. But the Global Fund has absolutely taken a step forward toward a strategic, evidence-based approach, and we look forward to watching further refinements over the next few years.
More Results-Based Contracts
In our report and a related paper, we recommended that the Global Fund restructure its contracts to incentivize better results. One year later, we’re pleased to see the fund embrace piloting of results-based contracting mechanisms with open arms, and we’re even more excited to be part of the action.
Here are some highlights: In Rwanda, the Global Fund has signed on to a pilot project where payments are tied to performance against specific HIV outcome indicators. In Mesoamerica (countries of Central America and southern states of Mexico), the fund is supporting a Cash-on-Delivery model to reward countries for progress toward malaria elimination. In Benin, the Global Fund is partnering with the World Bank’s Health Results Innovation Trust Fund to support results-based financing for providers at local health facilities. And many more projects are currently under discussion as the Global Fund explores how results-based financing can become a core component of its overall business model.
One more exciting development: this month, with support from the Bill and Melinda Gates Foundation, and in partnership with both the Global Fund and the Clinton Health Access Initiative, we’re launching a new working group to explore how the Global Fund can best put innovative contracting designs to work across its portfolio—all while striving to maximize the health impact of each dollar and mitigating the attendant risks. The working group will be co-chaired by a high-ranking member of the Global Fund’s secretariat, and we expect that the output will help inform the Fund’s strategy for the next replenishment cycle.
Though the finish line is still far away, the Global Fund deserves kudos for what’s already been done. We’ll continue to check in on movement – but for now we’re happy to see momentum in the right direction.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.