WHO Pre-Conference Workshop

Why and how to approach UHC froma public finance perspective?

AfHEA Conference, Rabat, Morocco25 September 2016

Fifteen years after Abuja: Key findings from a WHO study

on public financing for health in Africa

Hélène Barroy, PhDSr Health Financing SpecialistWHO

WHO Pre-ConferenceWorkshopAfHEA Conference, Rabat25 September 2016

BackgroundBackground

2001 Abuja Declaration: Call for 15% of public expenditure to health

Growing recognition of the importance of betterallocating and using public funds toward UHC

2016 WHO stock-taking analysis: Progress of public financing for health in Africa over the past 15 years, focusing on budget allocation, execution and use.

OutlineOutline

• Do budgets and health budgets prioritize well?

1.Budget allocation

• Are health budgets fully executed, and if not, why?

2.Budget execution

• Why do budget practices constraintUHC progress?

3.Implications for UHC

OutlineOutline

• Do budgets and health budgets prioritize well?

1.Budget allocation

• Are health budgets fully executed, and if not, why?

2.Budget execution

• Why do budget practices constrainUHC progress?

3.Implications for UHC

Richer states do not necessarily prioritize health more

Richer states do not necessarily prioritize health more

Government health prioritization is not associated withnational income.

Health prioritization and GDP per capita, 2014:

Public expenditure on health grows lessrapidly than fiscal capacity

Public expenditure on health grows lessrapidly than fiscal capacity

In the majority of African countries, low responsiveness of public expenditure on health to growth in state revenues.

Elasticity of public expenditure on health to revenues, 2000-2014

Low elasticity (below 1) Higher elasticity (above 1)

Algeria, Angola, Benin, Botswana, Burkina Faso,

Burundi, Cabo Verde, Central African Republic, Chad,

Comoros, Equatorial Guinea, Ethiopia, Eritrea,

Kenya, Gabon, Gambia, Ghana, Guinea Bissau,

Lesotho, Liberia, Mali, Mauritania, Mauritius,

Mozambique, Namibia, Niger, Republic of Congo,

Rwanda, Sao Tome and Principe, Senegal, Seychelles,

South Africa, Swaziland, Togo, Zambia

Cameroon, Guinea, Ivory Coast, Madagascar,

Nigeria, Sierra Leone, Tanzania, Uganda

Elasticity below 1 means that public expenditure on health increasesless rapidly than revenues.

Misalignement between politicalcommitments and actual spending

Misalignement between politicalcommitments and actual spending

Health was de-prioritized in 19 African countries between 2000 and 2014.Change in government health prioritization, median values 2000-06 and 2007-14

Public resources skewedtoward high-end care

Public resources skewedtoward high-end care

A large number of African countries spends less than 40% of health service expenditure on primary care.

0%10%20%30%40%50%60%70%80%90%

100%

Non-primary care

Primary care

Primary and non-primary care expenditure, as a share of public expenditure on health services, %

Mismatch between budget inputs and sector priorities

Mismatch between budget inputs and sector priorities

42%

75%80%

85% 84% 84%

64%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2008 2009 2010 2011 2012 2013

Personnel expenditure Operating expenditure

Capital expenditure

• Dominant share of public expenditure on healthdedicated to personnel costsin most African countries

• Inputs-based budgetingperpetuates misalignementbetween budget allocations and health priorities

• Transitioning towardalternative budget structures that link allocations withresults is a possible path for improving spending efficiency.

Economic classification of public expenditure on health, DRC

Source: Barroy H et al, World Bank, 2016

OutlineOutline

• Do budgets and health budgets prioritize well?

1.Budget allocation

• Are health budgets fully executed, and if not, why?

2.Budget execution

• Why do budget practices constrainUHC progress?

3.Implications for UHC

Underspending the health budget is commonplace in Africa

Underspending the health budget is commonplace in Africa

10-30% of authorized allocations for health are never spent.

40

50

60

70

80

90

100

Unspent

budget

Realized

expenditure

Underspending means unused fiscal space and lost opportunities for better

health results

Underspending means unused fiscal space and lost opportunities for better

health results

Country examples of loss of fiscal space due to underspends:

Unspent health budget

(current million US$)

Unused budgetary space per

capita (current US$)

DRC (2013) 119.8 1.52

Guinea (2014) 10.2 0.89

Togo (2014) 17.5 2.39

Benin (2014) 33.5 3.31

Mauritania (2014) 11.0 2.90

Ivory Coast (2014) 66 .3 2.93

Root causes of health budget underspendsRoot causes of health budget underspends

T-3:

MTEF

• Variable quality of revenue forecasts

• Ineffective use/limitedpolitical value of mid-termbudgeting tools

• Inter-sectoral re-allocations, post-MTEF

T-1:

Formulation

• Unpredictableallocations; annual variability

• Inappropriatebudget structures

• Mismatchbetweenallocations and priorities

T:

Execution

T+1:

Reporting

• Weakaccountabilitylines

• Poor data consolidation

• Misclassifications• No retro-feedback

into next budgets

OutlineOutline

• Do budgets and health budgets prioritize well?

1.Budget allocation

• Are health budgets fully executed, and if not, why?

2.Budget execution

• Why do budget practices constrainUHC progress?

3.Implications for UHC

Budget misallocations : more benefits for the rich

Budget misallocations : more benefits for the rich

As public money is not prioritized toward primary care, the rich benefit up to seven times more from public funds thanthe poor.

Example from Chad:

6.1

46.5

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

Primary Secondary Tertiary TotalSubvention

Poorest

Low Middle

Middle

Upper Middle

Richest

Budget misallocations may also contributeto inequitable coverage

Budget misallocations may also contributeto inequitable coverage

Coverage gaps have worsened between rich and poor in several Africancountries.

Change in coverage gap of skilled birth attendance between richest and poorestquintiles, % point change

Effects on financial protectionEffects on financial protection

.

3.2

2.0 2.0

1.21.0

0

1

2

3

4

5

Ca

tastr

oph

ic h

ea

lth

exp

en

ditu

re,

he

ad

co

un

t ra

tio

(%

)

Q1 Q2 Q3 Q4 Q5

Catastrophic health expenditure is defined as when spending out-of-pocket on health is equal to or exceeds 40% of total expenditure net of a subsistence-level of food spending.WHO & World Bank (2015). Tracking universal health coverage: first global monitoring report. WHO.

Poor people are disproportionatelyaffected by catastrophic spending.

Why?

• Access to primarycare services ismostly financed by OOPs

• Public money is not appropriatelytargeted.

ConclusionsMaking public funds work for UHC

ConclusionsMaking public funds work for UHC

Introducingoutputs-based

budgeting

Introducingoutputs-based

budgeting

Streghteningmulti-yearbudgeting

tools

Streghteningmulti-yearbudgeting

tools

Unpackingthe under-spending

issue

Unpackingthe under-spending

issue

Supportingproduction and use of

expendituredata

Supportingproduction and use of

expendituredata

ReferencesReferences

• Public financing for health in Africa: from Abuja to the

SDGs (2016). Geneva, World Health Organization; HIS/HGF/Tech.Report/16.2

• Available on line: http://www.who.int/health_financing/documents/public-financing-africa/en/

• Lancet op-ed: http://www.thelancet.com/journals/langlo/article/PIIS2214-109X(16)30226-1/fulltext?rss=yes