Doubling health spending in low-income countries improving health budget less than expected

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Study takes first systematic look at impact of international health aid

Low-income countries have doubled their domestic spending on health overall, reports a major new
study over 12 years ending in 2006, but international health aid may not be
adding as much as expected to the health budgets of some of these countries.

After systematically analyzing all available data and compensating for significant
gaps, a team of researchers at Harvard Medical School (HMS) and the Institute for
Health Metrics and Evaluation
at the University of Washington identified two major trends.

First, in
sub-Saharan Africa, where many governments receive significant health aid from
developed countries, international organizations and global health initiatives
directly, the aid appears to be in part replacing domestic health spending
instead of fully supplementing it. Overall, for every $1 spent in health aid,
governments of developing countries moved between 43 cents and $1.14 of their
own funds to other priorities, the researchers found.

Second, in
countries where nongovernmental organizations receive most of the aid and then
apply it to projects inside the country, government health spending appears to
have increased. Both trends merit further research, the authors say.

The health
spending study represents the first systematic effort to address where donor
money for global health goes and how it is used, observers say. The findings
raise a number of serious questions about international health financing and
are expected to frame future discussions and research.

 In developing
countries, government spending on health from domestic sources plays a key role
in promoting population health, says Chunling Lu, the paper’s lead author and
an instructor in the Department of Global Health and Social Medicine at Harvard Medical School.

 “We are hoping
that the lessons learned from countries that are investing more of their own
money in their health systems can be applied where domestic health spending is
declining,” says Julio Frenk, dean of the Harvard School of Public Health and
IHME board chairman. “The worst outcome would be for people to lose faith in
health aid, especially now when, as we can see in places such as Haiti,
countries need extra help to make a tangible difference in people’s lives.”

domestic government spending on health doubled in low-income countries over 12
years to reach $18 billion in 2006, the study shows. That is three times as
much as the amount of development assistance for health the governments

 “The fact that
governments are committing more of their own resources to health is crucial,”
says co-author and IHME director Christopher Murray.
“Aid from outside donors plays an important role but can fluctuate from year to
year. Governments ultimately have to sustain themselves.”

The study,
published in the British medical journal The Lancet, was
released during a daylong meeting of representatives from aid organizations,
governments, development banks and research institutions at Imperial College in
London. The forum addressed the relationship between international resources
contributed to health and the funds that governments in developing countries themselves

“Lu and
colleagues have accomplished a herculean task in generating a dataset on health
spending in developing countries,” other researchers wrote in an accompanying
in The Lancet. These same
commentators also warned of the data’s limitations and the need to allow
countries to set their own spending priorities. “Should the ministry of health
budgets be increased at the expense of, say, prevention of road-traffic
accidents (a serious cause of premature mortality), which might fall within the
ministry of transport?” they wrote.

 Despite the
rigor of their analysis, the researchers themselves also strike a cautionary

  The team probed spending data from
developing countries and health aid data from agencies, multilateral institutions,
such as the World Health Organization and the International Monetary Fund, and
hundreds of nonprofit groups and charities. In some countries, records of government health
spending were missing most years of information, they found. For example, for the period 1995–2006, about 20 to 35 percent of the data points were missing from government health
spending documents.

 “Right now, we
don’t know where all the money is going because the documentation is so poor,”
says co-author Dean Jamison, professor of global health at IHME. “Some
governments may be channeling parts of their health budgets toward better
sanitation or education. All we know is that it isn’t going directly into the
health budget.”

To strengthen
the effectiveness of the health aid system for donors and developing countries,
the researchers make five recommendations:

  • Adopt a clear set of
    reporting standards for government health spending as source, as well as
    spending in other health-related sectors;
  • Establish collaborative targets to maintain or increase the
    share of government expenditures going to health;
  • Invest in developing countries’ capacity to effectively receive
    and spend health aid;
  • Carefully assess of the risks and benefits of expanded health
    aid to non-governmental sectors;
  • Study the use of global price subsidies or product transfers as
    mechanisms for health aid.

 The study was
funded by the Bill & Melinda Gates Foundation