Strengthening health systems during a pandemic: The role of development finance : Part 1
Key policy messages
• Despite increased mobilisation after the 2014-2016 Ebola crisis, investment in pandemics preparedness and response has been insufficient. In light of the “global public good” nature of such spending, it is in countries’ own interest to spend more and better on pandemic preparedness in other countries. Setting up systems to track such flows can help to do so much more effectively.
• Global mobilisation to fight the health consequences of COVID-19 has been impressive but more should be done. Development co-operation has a key role to play to limit the spread of the disease in low and middle-income countries. In addition to raising more funds, it can focus on creating and spreading knowledge of solutions, and promote best practices in the response.
• The current crisis engulfs health systems as a whole, especially in low-income countries where they are most fragile. Health It is important to step up support to universal health coverage and avoiding the disruption in other critical healthcare provision (maternal and child care, other communicable and non-communicable diseases).
Development co-operation for health on the frontlines Financing the health sector is a long-standing development challenge. The World Health Organization (WHO) estimates that an additional USD 370 billion per year are needed for primary health care to achieve the SDG targets on universal health care (UHC) in low- and middle-income countries (WHO, 2019[2]). Development co-operation continues to play an important role in this sector, with official development assistance (ODA) to health reaching USD 26 billion in 2018. Development assistance to health represented 12% of total health spending in lower middle-income countries, and 29% for low-income countries.
As countries transition and reach higher levels of income, their dependency on external financing declines, but differences in health coverage remain Development co-operation will be on the frontline of the COVID-19 battle in developing countries. As the economic and public health crises progressively hit developing countries, including the most in need, domestic resources will be strained, and external financing will be further solicited. It will be important to ensure that immediate responses to the crisis are put in place, and health systems are consolidated to build resilience to future shocks. There are other aspects where development finance will play a major role, in particular as a financial safety net, but this note focuses on aspects specific to the health sector.
The international community was prompt to respond with a number of statements calling for action. On 9 April 2020, the OECD Development Assistance Committee (DAC) issued a statement calling for “sustained action by many actors to address the immediate public health and humanitarian crisis and simultaneous support for economic, environmental and social resilience” (DAC/OECD, 2020[3]). The G20 Leaders on 26 March 2020 agreed that they “consider that consolidating Africa’s health defence is key for the resilience of global health. We will strengthen capacity building and technical assistance, especially to at-risk communities,” and that they stood “ready to mobilise development and humanitarian financing.”1 Will development co-operation be up to the COVID-19 challenge? The immediate global response from multilateral and bilateral providers of development co-operation – including both health-related measures and broader support to economic activity – is estimated at around USD 250 billion (ODI, 2020[4]).
Humanitarian funding led by the United Nations (UN) system aimed to raise more than USD 2 billion for immediate needs, in addition to a request for funding of USD 625 million for the World Health Organization. Multilateral development banks also readied large amounts of resources with about USD 120 billion in loans and grants. The World Bank mobilised USD 2 billion in early April specifically directed to health, and committed to additional USD 160 billion over the next 15 months. Bilateral donors also responded, with for example the European Union redirecting over EUR 15 billion to tackle the virus, and the French Development Agency (AFD) providing EUR 1.5 billion including technical support on epidemiological surveillance and response plans, and general support for health systems. In the longer run, there is a risk that the collapse of gross domestic product (GDP) growth in advanced economies could strain ODA budgets. This would be damaging, especially as all other inflows are collapsing. The OECD (2020[5]) highlights that ODA has proven to be a key countercyclical resource and was stable during the financial crisis of 2008 before declining slightly in 2011 and 2012.
During the current crisis, only a strong political commitment to global solidarity would safeguard and even increase ODA. Given the global emergency, development co-operation should focus on identified “quick wins” and successful models while also ensuring that funds are not diverted from essential services that need continued support and cannot be delayed, such as maternal health. Official development assistance can provide essential resources to fight the devastating effects of the crisis, and should serve as a catalyst of other sources of financing.
Members of the DAC and other development partners can take steps to promote those solutions including Better monitor and address gaps in pandemic preparedness. It will be important to improve tracking of financing for pandemic preparedness, for example by including it as a separate item under the Creditor Reporting System of the OECD. This would facilitate holding development partners accountable for the commitments they make. DAC members and other development partners can also support pandemic preparedness by using the Joint External Evaluation mechanism (JEE) or other preparedness indicators as one of the criteria to guide donor funding, or by providing technical support to help countries improve preparedness.
• Use and share technical expertise on “fixed-cost” items, including epidemiological modelling, support to the response, both at the country- and region-levels of intervention.
• Promote best practices in financing policy and financial responses to the crisis. The DAC could provide one venue to discuss sectors of intervention where development finance providers could identify synergies in fighting the impacts of COVID-19 and strengthening existing development efforts. This could include investing in urban infrastructure with more distance between people, providing WASH facilities, developing contactless payments, etc. Those solutions should be identified, shared, and disseminated.
• Use all available channels: Bilateral donors have the advantage of being able to rely on a variety of networks: foundations, civil society and community groups, research centres, etc., which can provide entry points in disseminating best practices. Development finance institutions should also play a role as responsible investors – adopting best practices in companies they invest in to slow the spread of the virus.
Investing in the “first line of defence”, or preparedness, is not enough. Development co-operation should also invest in the “second line of defence” – health systems. The COVID-19 crisis is a threat to domestic health systems that are already short of resources in many developing countries. The COVID 19 crisis may overwhelm health systems and challenge their capacity to handle basic functions, and it could also lead countries to shift their resources away from efforts to tackle other diseases and services. In light of the nexus between COVID-19 and other diseases, it is important that international support to address COVID-19, including from the DAC, is delivered in a way that protects and reinforces existing health priorities, and does not divert attention and resources.
For instance, disruptions to essential health services and access to food could lead to large increases in child and maternal mortality which had also been observed during the Ebola crisis in Guinea, Liberia and Sierra Leone (Davies and Bennett, 2016[7]) and (Roberton et al., 2020[6]) for a modelling study on COVID-19 specifically. Health security efforts for prevention, alert, and response to disease outbreaks such as COVID-19 need to be pursued in parallel with health system strengthening, as part of a mutually reinforcing approach to developing resilient health systems.
Lockdown policies can also reduce the use of healthcare services, and require enhanced monitoring of vulnerable populations. Synergies notably exist between achieving universal health coverage and enhancing health security. For example, universal health coverage secures against outbreaks through high immunisation coverage, provides early alert by facilitating access to healthcare for the entire population, women and men, and better response thanks to reliable infrastructure and healthcare workforce.
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Source : OECD