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Innovative Strategies for Health Financing: Some Options and What Worked

With a significant decrease in Total Fertility Rate from 6.0 to 2.0 per woman, Bangladesh’s family planning program stands as a powerful example of impactful reproductive health interventions. Its community outreach, subsidized contraceptives, and trained healthcare workers prevented over 764,000 maternal deaths between 1970 and 2020. Over these years, the government spent a total sum of 3.4 billion US dollars on Family Planning, just about how much it would cost to buy 170,000 luxury taxis or buy 680 military helicopters or 680 local-travel turboprop aircrafts or build 6 new hospitals or 6 new rail stations or build 4 new airports or even build 1 of the world’s longest bridges. So many alternatives, but this intervention did not only save lives, but it also saved the government of Bangladesh an estimated 7 billion US dollars – fantastic value for money spent. Still, the reality is government plans often address a wide range of societal needs, with resources coming from a finite pool of taxes, fees and fines and this traditionally available funds may not cover all necessary projects, including crucial health interventions. This has led to innovations in resource mobilization strategies. Health sector leaders and policymakers are actively seeking alternative funding sources to ensure cost effective investment for good population health outcomes.

The concept of Social Health Insurance was established in the early 20th century as a key mechanism for expanding health care coverage and promoting equity.  It takes various forms: some require mandatory contributions from government employees, pooling funds for covered individuals. Others are voluntary schemes where community members contribute small, regular amounts to a common pool funding basic healthcare within their community. Every nation faces the difficulty of reducing health care costs, but the approaches taken by different nations to achieve this vary greatly. There are essentially only four main approaches to reducing health care costs: supply-side cost sharing, which involves using prices paid to suppliers to lower utilization and/or plan payments per unit; non-price rationing, which involves limiting the amount of essential resources available to provide healthcare, whether handled by the government sponsor or by individual health plans; and information provision that affects demand and provision of care. The Obio Community Health Insurance Scheme in Nigeria, a collaboration between government, a corporation, and local communities, exemplifies innovative health financing. It significantly reduced financial burdens on households and improved access to affordable healthcare services. However, the design of Social Health Insurance focuses on routine and emergency services, limiting its reach for interventions like reproductive health programs in many instances.

Public-Private Partnerships (PPPs) represent another innovative approach gaining traction. These collaborations leverage private sector expertise and capital for healthcare infrastructure development, service delivery, or research and development.  Impact bonds, a particularly ingenious funding technique within PPPs, attract investors seeking both financial returns and positive social impact. Investors can fund healthcare projects with long-term financial gain potential while addressing health challenges. The International Finance Facility for Immunization (IFF-Im), a project of Gavi, the global vaccine alliance, serves as a prime example. This PPP provides upfront financing to developing countries to purchase vaccines. By leveraging future donor contributions, it allows countries to invest in immunization programs, leading to a significant increase in vaccination rates and preventing millions of deaths. Essentially, Gavi facilitates a system where investors get a competitive return, donor countries fulfil pledges over time, and Gavi gains immediate access to funds for critical immunization programs. The Health Lottery in the UK offers yet another innovative approach. Launched in 2011, it raises money from lottery proceeds to bridge health inequality gaps.  Over 3,500 projects have been funded, raising over £131 million for health-related initiatives, positively impacting over 761,000 lives.

While “innovative strategies” for healthcare financing hold immense potential, historical examples demonstrate the need for careful consideration. The Airline Solidarity Contribution (ASC), proposed in the mid-2000s, aimed to raise funds for global health initiatives by adding a surcharge to airline tickets. However, challenges in gaining airline support and inconsistent implementation across countries hampered its success. The lack of a central program and airlines either resisting the levy or diverting funds elsewhere ultimately led to the ASC’s demise. This example underscores the importance of designing financing mechanisms that uphold key principles: Sustainability, Equity and Accessibility, Transparency and Accountability, and Data and Impact Measurement.  Choosing the right financing option for a health program, including Sexual and Reproductive Health and Right, requires careful evaluation of the Target Population, Program Goals, Program Budget, and Funding Source Reliability.  Despite the ASC’s shortcomings, innovative financing holds immense promise in bridging the resource gap and ensuring equitable access to quality healthcare. At Reproductive Health and Child Survival, leveraging our expertise in health economics and a track record of successful programs in sexual and reproductive health, we are well-positioned to be the right advisor for your organisation on innovative and cost-effective funding of inclusive SRHR interventions.

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