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Innovations in financing for health

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Innovations in financing for health Powered By Docstoc
					Financing the health
Millennium Development
Goals

                Commonwealth Health Ministers


May 2010



Dr. Cristian C. Baeza
Partner
Leader Global Health Systems Financing Group

PROPRIETARY
Any use of this material requires specific permission of McKinsey & Company
Our discussion today

             ▪   Significant progress made for achieving the Millennium
                 Development Goals (MDGs)

             ▪   However, major challenges remain in achieving target
                 health outcomes and in closing face a significant
                 financing gap

             ▪   Increasing and sustaining MDGs financing depend on
                 two critical challenges

                 – How to sustain and increase the revenue effort for
                   DAH funding in a very challenging international
                   macroeconomic environment?

                 – How to substantially increase MDG funding allocation
                   effectiveness and efficiency, among the complex
                   DAH architecture, across all sectors contributing to
                   health, and within countries?


                                                                     McKinsey & Company   | 1
We have witnessed a significant improvement in health                                                                               1990

MDGs and access to care for populations around the world…                                                                           2007
Low, lower middle and upper middle income countries)

                                 Infant mortality rate (0-1 year)      Under-5 mortality rate              Prevalence of tuberculosis
  Indicators of health           Per 1000 live births                  Per 1000 live births                Per 100,000 population
  status of the population

                                  103                                   162                                398 387 393
                                        80                                    126
                                             59                                      81                                     219
                                                  38      37                              50   50                                 127 100
                                                               19                                   22

                                  Low        Lower        Upper         Low         Lower      Upper       Low           Lower    Upper
                                             middle       middle                    middle     middle                    middle   middle


                                 Births attended by skilled            Neonates protected at birth         Immunization coverage
  Indicators of access to        health personnel1                     against neonatal tetanus            among 1-year-olds (Measles)
  health services                Percent                               Percent                             Percent
                                                          90 95               78     72 83          83                                 94
                                                                                                                    75   75 81    80
                                             62 70                       49                    46              58
                                   39 41


                                  Low        Lower        Upper         Low         Lower      Upper       Low           Lower    Upper
                                             middle       middle                    middle     middle                    middle   middle


1 Set of data from the 1990-1999 and 2000-2008 averages

SOURCE: World health statistics 2009, WHO, McKinsey Health System Financing Team Analysis, World Bank income
                                                                                                                    McKinsey & Company   | 2
        level classification
Financial protection has also improved significantly, demonstrated                                                                                    2000

by a worldwide decrease in OOP health expenditures                                                                                                    2006
Percent                                                                                                                                         X%    CAGR



   Out of pocket (OOP) health expenditures as a percentage of                                                   Global OOP health
   total health expenditures (THE) by geography and income                                                      expenditures as a % of THE

                                         -1.4
                                                                          -1.4
         -2.6                                                                             -0.3                                         -1.1
                          -2.2           64 59            -0.4
                                                                         47 43
        31 26                                                                            32 31                                  22.3
                         18 16                           18 17                                                                           20.9


       Africa1           Americas       South-          Europe           Eastern    Western
                                        East Asia                        Mediterra- pacific
                                                                         nean
             -1.6                    -2.2
                                                             -0.9
           60       54             56                                                -1.6
                                            49
                                                           33       31
                                                                                   16       14


        Low income1              Lower middle           Upper middle             High income                                      Global
                                 income                 income


1 In poor countries, the significant increase in external transfers has been the reason for the growth in health expenditures

SOURCE: World health statistics 2009, WHO; McKinsey analysis                                                                     McKinsey & Company   | 3
…yet, there are major challenges remaining to reach the Health, Nutrition
and Population (HNP) Millennium Development Goals
 HNP-related MDGs                           Recent status reports for selected HNP sub-goals
                                            ▪ Reduce the hunger rate – Progress in reducing hunger is now being
               Eradicate                        eroded by the worldwide increase in food prices
               extreme poverty              ▪   Out-of-Pocket health expenditures continues to play a significant role in
               and hunger                       impoverishment

                                            ▪ Under 5 mortality rate – 88% of 43 low-income countries made
               Reduce child                     insufficient (51%) or no (37%) progress in reducing child mortality rate
               mortality


                                            ▪ Maternal mortality rate – Decrease of <1% per year is well below the
               Improve maternal                 5.5% annual improvement required to meet the target; 42 of 43 countries
               health                           have high or very high maternal mortality ratio
                                            ▪   Access to reproductive healthcare – Only 2% increase (to 41%) in
                                                number of births attended by skilled health personnel from decade of
                                                1990s to the 2000s

               Combat HIV/                  ▪ Access to treatment for HIV – Only 28% of 7.1 million people in low-
               AIDS, malaria,                   and middle-income countries had necessary treatment for HIV by 2006
               and other                    ▪   Incidence of malaria –Little or no improvement has been seen since
               diseases                         2000 on use of artemisinin-based treatments among African children


SOURCE: The Millennium Development Goals Report 2008, Reich et al (2008), High-level Taskforce on International
        Financing for Health Working Group 1 (2009), “Countdown to 2015” (Lancet, 2008), Malaria & Children       McKinsey & Company   | 4
        (UNICEF 2009)
In response to this challenge, donor funding has increased significantly
in the last decade …

          Annual Development Assistance for Health (DAH)
          $b (in constant 2007 dollars)                                                            ▪   Development
                                                                                                       assistance for health
                                                               21.0                                    (DAH) more than
                                                                                                       doubled between
                                                                                                       1995 and 2007 in real
                                                                                                       terms
                                           +163%
                                                                                                   ▪   Net official
                                                                                                       development aid
                                                                                                       (ODA) as a
                                     8.0
                                                                                                       percentage of Gross
                                                                                                       National Income
                                                                                                       (GNI) increased to
                                                                                                       0.33% in 2005 and
                                                                                                       trended upward

                                   1995                       2007




SOURCE: Murray et al. (Lancet 2010), World Bank Strategy 2007, HLTF 2009, McKinsey Team Analysis              McKinsey & Company   | 5
… and overall public funding has also increased significantly in most
regions, driven primarily by GDP growth in Asia and Latin America
          Growth in public financing of health in all
          developing countries                                                                    ▪   Overall public financing in
          $b (in constant 2006 dollars)                                                               developing countries 2
                                     ~244                                                             has nearly doubled
                                          4  Other1                                                   during the period
                                   19        SSA                                                  ▪   This includes DAH to
                                                                                                      government which likely
                                                    48           N. Africa                            distorts the increase for
                                +88%
                                                                                                      SSA
                       ~130                                                                       ▪   Health spend as a
                    3                                                                                 proportion of GDP was
                               9                   100           Latin America                        flat 3 for low income
                    25
                                                                                                      countries 2000-2006
                                                                                                      – Growth in spend has
                         63                                                                               been driven primarily
                                                   73            Asia                                     by growth in GDP
                         30                                                                               rather than increased
                                                                                                          fiscal allocation
                       1995                       2006
Note: Numbers were approximated based on Figure 1A from the Lancet article                           NUMBERS ARE APPROXIMATE
1 Other includes Oceania and Caribbean
2 This includes all developing countries, not just low income
3 CAGR for THE as % of GDP (2000-2006) is as follows: low income = 0.0%, lower middle = 0.4%, upper middle = 0.5%, high income = 1.9%)

SOURCE: Murray et al. (Lancet 2010), WHO, McKinsey analysis                                                      McKinsey & Company      | 6
Nevertheless, significant additional funding is                                                           NUMBERS ARE APPROXIMATED
                                                                                                          BASED ON MULTIPLE REPORTS
needed to achieve the health MDGs
                                                                            Distribution of gap by geography1
                                                                            Percent, 100% = $32b 1
     Estimated annual funding gap for the                                                                           Non-SSA
     health MDGs
                                                                                                               22
     $b in 2015



                                                                                                    78
     High-level Taskforce
     on International                                                                      SSA
                                                       36-45
     Financing for Health
     (2009)                                                                Distribution of gap by health MDG2
                                                                           Percent, 100% = $32b 2

                                                                                                                       HIV/AIDS (#6)
                                                                           Under-5              30               30
                                                                           mortality (#4)


                                                                                                                13     Malaria/TB (#6)
                                                                                                     22
                                                                                   Maternal
                                                                                   mortality (#5)
1 Based on 2009 Taskforce analysis (median estimates under “no change” scenario)
2 Based on 2002 World Bank analysis adjusted to DAH levels in 2006

SOURCE: High-level Taskforce on International Financing for Health Working Group 1 & 2 (2009), Goals for Development
                                                                                                                       McKinsey & Company   | 7
        (World Bank 2002)
We face two key challenges in financing the health MDGs…




                               A Generating Necessary Revenue
                                    Ensuring funding through sustaining and increasing
                                    the revenue effort for DAH funding in a very
                                    challenging international macroeconomic
                                    environment

                              B Improving Allocation Effectiveness
                                    Maximizing impact through substantially
                                    increasing MDG funding allocation
                                    effectiveness and efficiency, among the
                                    complex DAH architecture, across sectors
                                    contributing to health, and within countries




SOURCE: McKinsey Health System Financing group (2009); High-level Taskforce on International Financing for Health
                                                                                                                    McKinsey & Company   | 8
        Working Group 2 (2009)s
Revenue: Raising necessary funds

   A Revenue                                                                                 B Allocation

 1. Innovating and                         Bilateral (Traditional) A1                       1. Optimizing
                                                                          Innovative
    improving existing                             donor                                       allocation across
                                                                      financing sources
    sources of donor                              sources          A2                          existing funding
    funding                                                                      B1            vehicles
                                                                                               (institutions)
  2. Facing the impact                                Funding Vehicles for Health
     of the global                               (e.g. World Bank, Global Fund, GAVI)       2. Improving
     financial crisis                                                                          efficiency, and
                                                                                 B2
                                                                                               alignment in
 3. Sustaining and                          Individual country level                           allocation from
    Leveraging                                                                                 existing funding
    existing public/                          A3                                               vehicles to
    private domestic                                                                           countries
    funds
                                                                                            3. Creating incentives
                                                                                               for results in
                                                                                               allocation from
                                                                                 B3            MoF to Sectors at
                                                                                               national and sub-
                                                    Sub-national executing agencies            national/ agency
                                                                                               level budgets


SOURCE: High-level Taskforce on International Financing for Health Working Group 2 (2009)      McKinsey & Company   | 9
A1 Both bilateral and “innovative” donor sources have increased in recent
   years… but, the financial crisis entails a significant challenge…
  Traditional donor sources                                                 Innovative financing sources
                                                                            Selected examples of innovative
  Types of                                                                  financing mechanisms
  traditional
  donor sources                Representative examples                                                  Revenue Cost
  Public funding               ▪   PEPFAR                                                               $ billions % of rev.
  from donor and               ▪   DFID                                     Solidarity levy (e.g.,       0.1 to          <5
  multilaterals                ▪   SIDA                                     airline tickets, tobacco)     >10
                               ▪   IDA
                                                                            Align funding time with       1-10          5-20
  Private                      ▪   The Bill & Melinda                       needs (e.g., IFFIm)
  foundations                      Gates Foundation
                               ▪   The Carso Foundation                     Public resources for          1-10           <5
                                   (Carlos Slim Hélu)                       private giving (e.g.,
                                                                            DeTax)
  Corporate funds              ▪   African Health Initiative
                                   (Exxon)                                  Leveraging lending             0.1           <5
                               ▪   The Coca Cola                            instruments (e.g., buy-
                                   Foundation                               downs)

                            While donor funding has increased greatly over time,
                            volatility significantly affects aid effectiveness

SOURCE: High-level Taskforce on International Financing for Health Working Group 2 (2009)                McKinsey & Company   | 10
A2 … the current economic crisis has significantly                                                              World
                                                                                                                Advanced economies
   impacted both developed and developing countries                                                             Emerging and develo-
       Percent                                                                                                  ping economies



   Historical and forecasted GDP growth                                        Key characteristic of the economic crisis
                                   Getting better but                          ▪ Global growth in 2009 fell to 0.45%
                                   still high uncertainty                       when measured in terms of PPP and to
                                   on future evolution                    9
                                                                                turn negative when measured in terms of
                                   of the crisis                                market exchange rates 1
                                                                                 – GDP declined by 4-6% in the Euro
                                                                          6        Area in 2009 (World Bank, 2009)
                                                                                 – In USA growth to turned negative in
                                                                                   2009 (IMF, 2009)
                                                                                 – Growth in emerging and developing
                                                                          3        countries fell from 6.25% in 2008 to
                                                                                   3.00% in 2009

                                                                               ▪ Volatility (e.g., rapid changes in currency
                                                                          0     exchanges and country financial risk) has
                                                                                increased significantly

                                                                          -3
   1970      75          80   85      90       95    2000      05    10


1 World Bank forecasts

SOURCE: International Monetary Fund; World Bank; McKinsey analysis                                       McKinsey & Company   | 11
A2 In many developed countries, health expenditures decrease in times
   of economic crisis, but its impact on health is unclear…
       Evolution of health expenditures across EU countries within 2 years from negative GDP growth


                                       1980–83                                              1988–93


         Countries reporting
         at least one year of                                             131                                                             172
         negative GDP growth
         Countries with
         increasing                                                 3                                                         7
         health spending

         Countries with
         decreasing                                               10                                                   10
         health spending


         A large number of EU countries lowered health expenditure after an economic downturn
         Reduction in expenditures, however, often occurred with a lag (1-2 years) after the
          economic downturn


1 Austria, Belgium, Denmark, Germany, Iceland, Ireland, Luxembourg, Netherlands, Portugal, Spain, Sweden, Switzerland and UK
2 Belgium, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Norway, Poland, Portugal, Spain, Sweden,
  Switzerland, UK

SOURCE: OECD Health Data 2008; McKinsey analysis                                                                       McKinsey & Company       | 12
A2 …whereas, significant evidence from developing countries indicate
   a link between financial crisis and worse health outcomes

                                             Specific developing country examples
    Overall findings
                                                                                   Drop in health
    ▪ Over 1 million excess                                   Country              spending2      Impact on health status
        deaths1    occurred in the
        developing world during
                                                              ▪ Argentina               -22%      ▪ Less frequent consumption
                                             Utilization          (2001-2002)                         of preventive medicine for
        1980-2004 in countries
                                                                                                      children (38% of total
        experiencing economic
                                                                                                      households and ~60% of
        contractions of 10% or
                                                                                                      poorest ones)
        greater
    ▪   Nutrition levels usually                              ▪ Indonesia               -10%      ▪ Drop from 53% to 34% in
        worsen during and after a                                 (1997-1998)                         health care service utilization
        crisis, leading to longer
        term health repercussions            Direct           ▪ Mexico                  -7%       ▪ ~7% increase in child mortality
    ▪   Effect of crisis                     health               (1995-1996)
        materializes through                 outcomes         ▪   Peru (1990)                     ▪ 2.5% increase in infant
                                                                                        N/A
        different channels                                                                            mortality
        – Lower utilization (often
            not recovering till long
            term after the crisis)                            ▪ South East              -15%      ▪ Increased prevalence of
        – Higher cost of services            Nutrition            Asia (1997-                         micro-nutriment (e.g., vitamin
            due to input (e.g., drugs)                            1998)                               A) deficiencies in children
            local price increase                                                                  ▪   22% increase in anaemia
                                                                                                      among pregnant women

1 Infant deaths
2 Measured over the period indicated as Government Health spending per capita (PPP adjusted)

SOURCE: UNICEF 2009; World Bank; Scholars‟ articles; McKinsey analysis                                            McKinsey & Company   | 13
A2 But this is are very different crisis as compared to previous ones,
further complicating the crisis and its potential long term effects in DAH
      Total leverage in US and parts of EU at historic high

      US and European total debt as % of GDP                                   Main differences with previous economic crises

                                European debt level                            Crisis propagation
       350
                                currently already at                           ▪ Ongoing crisis originated in developed
       300                                                                       countries after an unprecedented borrowing
                                   300% in 2008
       250                                                                       spree – further increased by current anti-
       200                                                                       cyclical fiscal effort to address crisis
       150                                                                     ▪ Unprecedented global wealth destruction
       100                                                                     ▪ Economic downturn has been from capital
                                                                                 markets onto the world real economy
          1920     30     40    50        60   70    80   90       2008        ▪ Industry structure and consumer behaviour will
                                                                                 remain in flux, creating new sources of volatility

      General Government Fiscal Balance                                        Country positioning
                                                                               ▪ Developed countries
      Percent of GDP
                                                          World                  – Total leverage is at historical high in US and
                                                          Advanced economies       Europe
                                                          Emerging and deve-
                                                          loping economies       – The story of fiscal imbalance and public debt is
                                                                          2        ongoing and uncertaint
                                                                          0    ▪ Developing countries
                                                                                 – On one hand, better positioned vs. the past
                                                                         -2
                                                                                   due to better fiscal balance
                                                                         -4      – On the other, unable to rely on increasing
                                                                         -6        exports to developed countries …
                                                                         -8      – … and on lower availability of capital, also
          2000          02           04         06        08        10             at higher costs


SOURCE: International Monetary Fund; McKinsey analysis                                                    McKinsey & Company   | 14
A2 … it could lead to a “no change” or even                                                                              "No change" scenario1,2

   negative revenue growth scenarios for DAH                                                                             "Commitments met" scenario1
                                                                                                                         Crisis trend (ILLUSTRATIVE)3

             Additional funding
             $b
            55
            50
                                                                                                                             MDG gap range
            45
                                                                                                                             $36-45b in 2015
            40
            35
            30
            25
            20
            15
            10
              5
              0
             -5
              2009 10            11      12     13      14      15      16      17      18     19      20      21 2022
                                                                                                                     Time
1 Projections taken directly from High-level Taskforce Working Group 1 analysis through 2015
2 Beyond 2015, “no change” projection assumes constant annual growth rate of 31% matching the 2012-2015 CAGR from the Taskforce projections
3 Crisis trend is illustrative. Assumes 1) tracking “no-change” scenario until 2011 and 2) decreasing level of additional funding of -5% per year after 2011

SOURCE: High-level Taskforce on International Financing for Health Working Group 1 (2009)                                      McKinsey & Company      | 15
A3 Development assistance for health (DAH) is essential (particularly in
   low-income countries but, it remains a fraction of total health spend
       Breakdown of total healthcare expenditure
                                                                                                           Private    Public
       Percent
                                    Low income countries¹                  Lower middle countries¹


          Total in 2000                     62.4             37.6   100%         62.9          37.1     100%

          Out-of-pocket                                53.4                               58.3

          External                      10.2                               1.1


          Total in 2007                    58.1              41.9   100%         57.5       42.5        100%

          Out-of-pocket                              48.3                               52.1

          External                        17.5                             1.1


       ▪ While increasing DAH is important, countries have a key say on MDG financing
       ▪ Effectively channeling country expenditure – particularly OOP – is crucial to attain MDG targets
       ▪ Sustained and expanded domestic health expenditure should be in line with national plan
1 Income category defined by World Bank country classification

SOURCE: WHO                                                                                           McKinsey & Company   | 16
A2 Recent evidence suggests an added complication: increases in                                                                            2000

   external transfers may have resulted in a decrease in „fiscal‟                                                                          2006

   allocation to health in poor countries                                                                                             X%    CAGR
       Percent
                                                               Total health expenditures,
                 External funds as a                                                                        Total health expenditures
                                                               excluding external funds,
                 percentage of GDP                                                                          as a percentage of GDP
                                                               as a percentage of GDP


 Africa                          7.0                                          -0.7                                        0
                                       0.6                              5.1          4.9                            5.5         5.5
                           0.4




 Low income                      5.8                                           0.5                                        0.4
                                       0.7                              3.7          3.6                            4.2         4.3
                           0.5




                                             A recent report states that “for all
                                             developing countries… for every $1 of DAH
                                             to government, the government reduced
                                             spending from it‟s own sources by $0.46”

SOURCE: McKinsey Health System Financing Analysis; World health statistics 2009, WHO, Murray et al. (Lancet 2010)     McKinsey & Company     | 17
A Summary of revenue challenges and opportunities



       Existing international donor sources
       ▪ Improve effectiveness and predictability of funding from existing sources
       ▪ Continue to develop new ways of raising additional funds

       Global Financial Crisis
       ▪ Biggest crisis on record is may affect country and international donor
         financing
       ▪ Likely enhanced difficulty in increasing DAH revenue
       ▪ Substantial increase in focus on DAH effectiveness at all levels
       ▪ Increased focus on sustaining country funding.

       In-country funds
       ▪ Create domestic fiscal space
         – Economic growth
         – Efficiency in health sector (see allocation section)
       ▪ Address the “additionality” challenge in donor funds and avoid „crowding
         out‟
       ▪ Leverage out-of-pocket (OOP) household financing

                                                                        McKinsey & Company   | 18
Allocation: The critical imperative of improving efficiency and maximizing
impact

   A Revenue                                                                                 B Allocation

  1. Innovating and                                                                         1. Optimizing
                                              Traditional donor    Innovative financing
     improving existing                                         A1                             allocation across
                                                  sources               sources
     sources of donor                                                                          existing funding
     funding                                                                     B1            vehicles
                                                                                               (institutions)
   2. Facing the impact
      of the global                                        Funding Vehicles
                                                                                            2. Improving
      financial crisis                           (e.g. Global Fund, World Bank, GAVI)
                                                                                               efficiency, and
                                                                                 B2            alignment in
  3. Sustaining and                                        IHP+ ; HSS Platform; other          allocation from
     Leveraging                                                                                existing funding
     existing public/                       Individual country level                           vehicles to
     private domestic                         A2                                               countries
     funds
                                                                                            3. Creating incentives
                                                                                               for results in
                                                                                               allocation from
                                                                                               MoF to Sectors at
                                                                                 B3
                                                                                               national and sub-
                                            Sector and Sub-national executing agencies         national/ agency
                                                                                               level budgets


SOURCE: High-level Taskforce on International Financing for Health Working Group 2 (2009)      McKinsey & Company   | 19
B1 Need to optimize allocation to existing funding vehicles reaching a
   right balance between specific health sector investments and
   multisector investments with health impact



                                                        Multisectorial investments
                              Earmark for health        with proven health impact
   Earmark funding for                                  (e.g., water & sanitation,
                              services and
   priority diseases                                    employment, HH income,
                              systems
                                                        education, other)

               While Ensuring Health system strengthening


                       A Challenge for Ministries of Health
           Transition from owner/guardian of inputs (i.e., health sector
           investments) to guardian to broader focus on outcomes (i.e.,
                                  health results)



                                                                  McKinsey & Company   | 20
B2 Challenges in improving efficiency in allocation from funding vehicles
   to countries
      Issues                      Description

       Ensure                      ▪ Harmonization of processes (e.g. reporting, standards for funding
       Harmonization                   application) across multiple funding vehicles
       and alignment               ▪   Alignment of international organizations:
                                       – To give in accordance with country strategies
       IHP + and other                 – To select receiving countries against a standard basis for need and
                                           capacity to efficiently utilize/absorb external resources

       In line with                ▪ Compatibility with macroeconomic performance
       Macroeconomic                 – Creation of necessary budgetary fiscal space
       conditions                    – Synergy with economic growth, funding to all sectors with health
                                          impact, avoidance of country economic distortions (e.g.DAH driven price
                                          distortions)
       „Address                    ▪   Donor funding on top of country fiscal spending (Cf. issues with this from
       Additionality‟                  section A1)
       Promote Results-            ▪ There are various results-based financing (RBF) mechanisms (e.g. output-
       based financing                 based aid, provider-payment incentives) and payment is made in
                                       response to the achievement of performance targets
                                   ▪   Historically, input-based financing has been used which easier to track
                                   ▪   However, there is a trend to change to RBF which will require
                                       – Change in culture (away from tracking $ flow)
                                       – Creation of new capabilities
                                       – Establishment of new informational systems and fiduciary rules/roles

SOURCE: High-level Taskforce on International Financing for Health Working Group 2 (2009)         McKinsey & Company   | 21
    B3 Challenges in allocation within countries: the promise and the
       challenges on results linked financing

      Issues                      Description

       Promote Results-            ▪ There are various results-based financing (RBF) mechanisms (e.g. output-
       based financing                 based aid, provider-payment incentives) and payment is made in
                                       response to the achievement of performance targets
                                   ▪   Historically, input-based financing has been used which easier to track
                                   ▪   However, there is a trend to change to RBF which will require
                                       – Change in culture (away from tracking $ flow)
                                       – Creation of new capabilities
                                       – Establishment of new informational systems and fiduciary rules/roles

       „The Challenges‟            ▪ Historically, input-based financing has been used which easier to track
                                   ▪ Shifting towards RBF will require:
                                     – Change in many donors culture (away from tracking $ flow)
                                     – Creation of new capabilities at country and donor level
                                     – Establishment of new informational systems and fiduciary
                                           rules/roles
                                       – Address and avoid potential perverse incentives in reporting and in
                                           narrow focus on specific targets



SOURCE: High-level Taskforce on International Financing for Health Working Group 2 (2009)         McKinsey & Company   | 22
Conclusion: A Renewed Commitment to Achieving the MDGs

  Addressing the challenges for financing MDGs will require:
  ▪   A renewed commitment and innovation for generating revenues for DAH,

  ▪   With equal intensity, setting the capabilities and health system financing arrangements
      to leverage and efficiently use country level funding (fiscal and household out-of-pocket)

  ▪   A unified vision and leadership both, at country and international agencies levels that:
      – acknowledges the challenge of the financial crisis for health but, also the needs
         beyond, in multiple sectors also contributing to health
      – avoids fragmentation and confusion in the content and in conveying the message to
         world leaders
  ▪   Scaling up of investment in a way that strengthens overall health systems (addressing
      all determinants of success in achieving the MDGs)

  ▪   Balancing those investments with investment in multiple sectors beyond health care
      that substantially contribute to health
  ▪   A very significant effort to improve efficiency to get more health for the available funding
      at all levels
      – Harmonization and alignment in the overall international architecture level
      – Strengthening health systems at country level with incentives for proven results

                                                                               McKinsey & Company   | 23
Financing the health
Millennium Development
Goals

                Commonwealth Health Ministers


May 2010


Dr. Cristian C. Baeza
Partner
Leader Health Systems Financing Group

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