At the World Bank’s Annual Universal Health Coverage (UHC) Financing Forum this year, I took part in a mock competition to help determine the topic of next year’s forum. I was up against Larry Gostin, who argued that the 2017 forum should focus on equity and human rights, and Sara Bennett, who made the case for it to be the political economy. My pitch was for the forum to focus on efficiency—or value for money—in UHC reforms, and here’s why:
There are two core reasons why thinking about and ensuring value for money in health is so important right now. First, the health sector needs to ensure that limited resources go as far as possible. In 2010, the World Health Report estimated that 20-40 percent of all health sector resources are wasted and therefore not put toward achieving health goals. Second, across sectors, competition for resources and the attention of policymakers and donors is heating up as the global economic slowdown constrains domestic resources, and as development assistance for health has flat-lined in recent years. A good way to make sure that health stays on top of the agenda is to show citizens and decision-makers that the health sector can provide value for money.
Related Work on Value for Money:
- Report: Building Institutions for Smarter Public Spending
- Report: Putting Incentives to Work for the Global Fund and Its Partners
- Report: Next Generation Financing Models for Global Health
- Report: Making Fiscal Transfers Work for Better Health
- Working Paper: Future Health Spending Scenarios in Brazil, Chile, and Mexico
So what is value for money? It is getting the most benefits out of a set of resources by allocating more efficiently, generating more impact, or lowering costs. It is not recklessly cutting health budgets or irresponsibly pivoting to a priority-of-the-moment issue. That can have serious consequences, such as the resurgence of diseases like yellow fever and malaria.
To mobilize resources more efficiently, countries can reduce distortions in existing tax systems (for example, at the intersection of formal and informal sectors) and donors can streamline programs and lending. Combining pooling arrangements can improve risk protection and lower administrative costs. It can also help avoid unsavory incentives that can otherwise only be contained with extensive (and expensive) regulation. And finally, we can also spend more efficiently. For instance, evidence from countries like Rwanda and Argentina suggests that results-based-financing (RBF) can help align incentives to encourage performance and to send money to the frontlines. But even within RBF programs there is room for improving efficiency, such as by lowering the costs of routine performance verification.
Value for money can also be applied to data collection in health. Universal health coverage programs generate large amounts of administrative data that could be used to inform policies and programs, but are often messy and difficult to access. As a result, existing data are not used to their full potential—including their potential to help identify and tackle inefficiencies. On the flip side, too much and unnecessary data are collected, often at substantial cost.
To convince countries and donors in the current economic climate to put up the funds needed to address the health equity gap, an estimated $70 billion per year until 2035, the global health community has to prove that it can make good use of funds and get results. Doing so will foster resilience and help maintain the impressive health gains and systems reforms of the last decades. To make next year’s Universal Health Coverage Financing Forum a success, we should start now to focus on strengthening the evidence base and political support for value for money. And of course, value for money shouldn’t only be on the agenda of next year’s forum, it should also be on the minds of researchers and decision-makers worldwide.
You can watch the entire session, including Gostin and Bennett’s pitches, here.
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.