Health Finance and Mobilizing Domestic Resources

Speeches Shim

Verifying insurance at at Gisenyi District Hospital, Rwanda.
Verifying insurance at at Gisenyi District Hospital, Rwanda.
Photo Credit Todd Shapera: MSH

Countries use public and private sources of funding to address the health needs of their citizens. As countries’ economies grow, donor assistance for health declines. In the early stages of this transition, public spending for health tends to remain flat or increase slowly, while out-of-pocket spending rises rapidly. This can worsen access to health care and drive people into poverty from catastrophic medical expenses.The last 50 years have seen a historic five-fold increase in gross domestic product per capita in the world. As a result of this trend, more countries are moving away from reliance on foreign aid to finance their health needs and are seeking to mobilize their own domestic sources of health financing.

In close alignment with USAID’s Financing Self-Reliance framework, USAID’s work on health financing seeks to advance its partner countries’ efforts to realize sustainable, equitable health finance systems. We help countries that seek to increase the amount and improve the effectiveness of funding collected from government and private sources in the health sector (domestic revenue collection), spread health risks across their populations and strengthen public financial management, and allocate financial resources efficiently and equitably. To do this, we provide technical assistance and support to strengthen country systems.

Domestic revenue collection can be a challenge in the health sector if countries seek to mobilize financial resources (e.g. through user fees) from very poor and socially marginalized populations. Hence, many of our efforts in this regard support budget advocacy. Spreading health risks across the population does not require insurance platforms, though these can be useful. Rather, health finance systems should seek to share resources equitably among the healthy and the sick, and among the rich and the poor. Strengthened public financial management practices in the health sector will improve the efficiency with which financial resources are managed and deployed and help ministries of health align their efforts more closely to the interests of legislatures and ministries of finance. Finally, work can be done to improve the transparency and efficiency of national systems for priority setting and resource allocation. Efficiency improves when financial resources go to the right population groups for the right services at the right time. This includes ensuring that financial protection extends access to services for poorer and marginalized populations.

Such a comprehensive view of health finance systems, a view that extends beyond domestic revenue collection, and an explicit awareness of its challenges, will help to ensure that the right foundation is in place to support partner countries’ sustainable development.

More Resources on USAID’s Health Systems Strengthening Work

Last updated: June 30, 2021

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