FCV Health Knowledge Notes Health Financing in Fragile, Conflict and Violence (FCV) Situations Five key questions to be answered SUMMARY ➣ Levels and efficiency of health services financing in FCV countries are significantly low. FCV countries face more challenges in each of the ➣ health financing domains: resource mobilization and pooling, resource allocation, purchasing, and service provision. ➣ This note will discuss the issues and solutions around generating and pooling financial resources and maximizing the efficiency of existing money (purchasing). Source: Health policy project. WHY is Health was an estimated 41 percent funding gap for UN- Q1 Financing a challenge coordinated humanitarian assistance in 2017. Conflicts are becoming more protracted (average of in FCV situations? 19 years in 1990 to 37 years in 2013). Over half of all refugees or internally displaced people can live in host communities for more than 4 years with no FCV countries significantly underspend in health immediate prospects of return, or resettlement. care. 21 of the 25 FCV countries with available data had This is beyond the short time horizon of humanitarian per capita health expenditure below US$100 in 2015, and assistance. For instance, UNHCR health funding for 9 of them spent less than US$40 per capita. refugee health programs significantly reduces after two Residents in FCV countries had a higher proportion years. As most refugees do not have income or ability to of their health care costs paid out-of-pocket (OOP), pay for health care, they often overstretch the financial therefore facing high financial burdens. 8 of the 25 resources and service capacity of the host community. FCV countries had OOP costs of over 50 percent of total How to sustainably finance the long-term health needs of health care costs. refugees, as well as their host community, is a challenge in hosting countries such as Lebanon, Jordan, and Chad. FCV countries have high dependence on external Sustainable and coordinated financing is lacking to funding for health care and there is a big funding bridge humanitarian and development assistance. gap. External funding contributes to at least 20% of total Many countries that experienced conflicts, violence, health expenditure in 2/3 of FCV countries. FCV countries pandemics, or political crises receive humanitarian received $3.93 less external funding per person per year compared to stable low-income countries. There 1 assistance during a crisis or immediately post-crisis; phase with GAVI, and in 2025, Côte d’Ivoire will start however, in the medium term, countries transition from fully financing its own immunization program. How to short-term humanitarian assistance to longer term effectively mobilize domestic resources, better coordinate development assistance. These two types of financial the country system and donors, and ensure a smooth assistance are usually poorly coordinated, resulting in transition are priorities. huge fluctuations in health financing or even a gap period, misalignment with country priorities, and threats For donors, governments, and local and international to sustainability of health programs. The new trend is health care providers, ensuring transparent and toward a humanitarian- development nexus to jointly accountable financial mechanisms are important conduct assessment, planning, investment, and health concerns, in the context of weak governance and system strengthening during and post crisis. institutional capacity. With improved economy and governance, some Last but not least, the quality of assistance to FCV FCV countries are transitioning from relying on affected countries matters—in other words, donor funding to domestic resource mobilization. upholding financial aid effectiveness and efficiency. Côte d’Ivoire recently entered the preparatory transition Q2 WHAT are the specific issues with FCV health financing? Health financing in FCV contexts is a very broad and complex topic. There are six typologies of FCV contexts classified by the World Bank; each face different challenges in each of the five health financing domains: resource mobilization, pooling, resource allocation, purchasing, and benefit package design (Figure 1). Specific challenges can be understood in a matrix of interactions between FCV contexts and health financing domains. This note focuses on resource generation, pooling, and purchasing in various FCV contexts. FIGURE 1 Framework of FCV health financing: the interactions between five health financing dimensions and six typologies of FCV Resource Resource Strategic Benefit package mobilization Pooling allocation purchasing design Elevated risk Active conflicts • Grants and or political crises loans, • GFF, RBF, • Donor PBF, Deep fragility coordination, PBC • Health insurance, Transition • CERF Subnational conflicts and violence Regional conflicts and • GCFF, • Refugee cross-border spillovers health insurance • IDA refugee sub-window 2 WHAT are the tools and instruments for resource Q3 mobilization and purchasing in FCV contexts? BOX 1 Resources on Health Financing in Fragile States ✓ Resources from ReBUILD’s work on health financing in conflict-affected and post-conflict settings ✓ A guidance note on Health Insurance Schemes for Refugees and other persons of concern to UNHCR ✓ Resources from ReBUILD’s work on performance-based financing in fragile and post-conflict states ✓ World Bank’s Performance-Based Financing Toolkit ✓ RBF toolkits ✓ World Bank’s Performance-Based Contracting for Health Services in Developing Countries: A Toolkit TABLE 1 Frequently used instruments and strategies for resource generation, pooling, and purchasing Resource generation and pooling Purchasing For FCV Grants and loans Result-Based Financing (RBF), Domestic financing including Performance-Based Global Financing Facility (GFF) Financing (PBF) Health insurance (social, community-based) Contracting Central Emergency Response Fund (CERF) Donor coordination and pooling For refugees Grants Concessional loans • IDA refugee sub-window • Global Concessional Financing Facility (GCFF) Health insurance • Refugee health insurance Instruments for resource generation states, including: Afghanistan, CAR, DRC, Côte d'lvoire, Haiti, Mozambique, Liberia, Myanmar, Sierra Leone, and pooling Cameroon, Kenya, Nigeria, and Guinea. Health insurance Global Concessional Financing Facility (GCFF) While health insurance is a commonly used instrument Launched in April 2016 through a partnership between to pool resources and risks, it is not common in FCV the World Bank Group, United Nations, and Islamic countries. No study on social health insurance was found Development Bank Group, the Global Concessional in FCV countries. Zimbabwe is in discussion on national Financing Facility (GCFF) provides development support health insurance as a policy option. Community-based to middle-income countries affected by refugee crises health insurance also has limited success, with examples around the world. Each $1 in grant contributions leverages being post-conflict years of Cambodia and Rwanda. about $4 in concessional financing. With funding from Global Financing Facility (GFF) GCFF and IDA, the World Bank’s Jordan Emergency Launched in 2015, the Global Financing Facility (GFF) in Health Project commits US$50 million to Jordan, of which support of Every Woman Every Child helps governments US$13.9 million is on concessional terms. The parallel loan in low- and lower-middle-income countries transform how for ISDB provides an additional US$100 million. The GCFF they prioritize and finance the health and nutrition of their has also provided US$24.2 million concessional loans to people. GFF has operated in 24 fragile countries and the Lebanon Health Resilience Project. 3 Refugee Health Insurance literature, schemes that pay for quantity of services UNHCR has implemented refugee health insurance include fee-for-service, capitation, and diagnosis schemes in 11 countries, including several FCV countries, related groups (DRG), etc.; whereas schemes that such as DRC, Togo, and Mali. A comprehensive manual pay for quality are typically referred to as pay-for- has been generated on how to design and implement • performance. refugee health insurance. Most refugee insurance PBF is a popular payment mechanism in post- schemes started with UHNCR financing (as a subsidy for conflict countries and fragile states (Burundi, DRC, premium or insurer’s administrative cost) for two years; CAR, Djibouti, Afghanistan, Haiti, Liberia, Zimbabwe), then they were required to transit to user- or government- possibly because the weak health care system gives funded schemes in the form of community-based, social opportunities to innovate and establish new systems health insurance (Ghana), or private health insurance. and institutional reform. It is also more feasible in Empirical evidence shows very limited success to scale settings where external actors and donors have a up and sustain the scheme. Iran was the only example strong influence, or where there is a low level of trust with a relatively large number of beneficiaries for hospital • within the public system. care and good sustainability. PBF has six design principles. However, adaption to contexts and flexibility in implementation are Instruments for purchasing and more important for the survival of the PBF. Typical adaptions made from field experiences in FCV efficient use of funding countries are summarized in Figure 2. Notably, some adaptations violate the “design principles” for pragmatic Results-based financing and performance-based reasons. For example, PBF requires payment against financing performance; yet many programs in fragile states • Results-based financing (RBF) is a category often do not have the resources to achieve the results. Therefore, PBF programs in DRC, CAR, and Nigeria of financing instruments to incentivize results. Performance-based financing (PBF) is a type of RBF provided flexible and nonperformance-based funding that pays institutions or individual providers based on in advance for construction and rehabilitation of their performance, which is usually the quantity and destroyed facilities, recruitment of health professionals, quality of services delivered. In the classic purchasing and procurement of drugs and essential supplies. While PBF requires payments to be made after results verification, it is sometimes risky to verify (e.g., Ebola FIGURE 2 Design Principles and Practical Adaptations of Performance-Based Financing (BPF) PBF adaptations Changes in verification Combined procedures functions PBF principles Separation Additional infrastructural Linking payments of functions and quality investments by performance Free care for IDPs Equal access Contracting Contracting mobile Opportunistic bonuses clinics community End user Autonomy for contracting empowerment health care Limited formal Contracting of regulator (contracting CBOs) providers community by purchaser accountability Purchaser assisting with procurement Purchaser support staff recruitment Collaboration with other agencies for input procurement Source: Bertone et al. 2018 4 crisis in Liberia). Therefore, some FCV PBF programs may have to allow payment without verification. Most FCV settings do not have a functional banking infrastructure, and cash payments to facilities and individual providers are often used. • There are positive results from PBF, but there is limited understanding of its impact (intended and unintended). PBF programs in Afghanistan have demonstrated positive gains in service utilization. However, there is no conclusive evidence if PBF is superior to other payment arrangements. PBF in Zimbabwe helped to increase resource mobilization. It introduced a contractual relationship for some providers, and improved their payment system, data quality, and autonomy. Haiti’s previous experiences of RBF demonstrated a substantial increase in rates of completely vaccinated children and prenatal care among women, as well as an increase in the quantities of primary health care services. Based on the positive results, the Ministry of Public Health and Population (MSPP) made RBF mechanisms one of the key pillars of the 2012 National Health Strategy. Contracting Since 1999, contracting international NGOs to provide health services has been identified as a primary mechanism to support health sectors in FCV countries. Experiences in Cambodia, Haiti, Afghanistan, DRC, Liberia, and southern Sudan have shown contracting to be effective in improving access to basic care, and often better than government at reducing inequalities. Afghanistan showed good results with large-scale contracting. Since 2002, a joint mission of funders, in collaboration with the Ministry of Public Health, started to fund contracts with 27 NGOs (17 international and 10 Afghan) that cover most of the population in 34 provinces for a standardized package of care. Contract periods averaged at 26 months (12–36 months). On the other hand, contracting can lead to a tendency to depend on donors, and undermine the capacity building and involvement of government, making it difficult to eventually transfer the function to government. Moreover, NGOs usually pay higher salaries than the government, and may even lead to a brain drain. BOX 2. Opportunities to Explore Innovative Health Financing Instruments for FCV Various innovative financing instruments have been shown feasible for stable middle- and low-income countries. Despite the limited experiences in FCV countries, their potential in FCV contexts could be further explored through: • Social impact bonds • PPPs • Earned income business models • Combined indexed insurance and catastrophe bonds • Multi-donor trust funds BOX 3. Costing Tools and Resources for Basic Packages of Services in FCV Contexts • WHO costing tool for maternal and child health • One-Health Tool for costing and planning of services and capacity • WHO CHOICE Tool for selecting cost-effective interventions • Costed packaged in Syria, Lebanon, Sub-Saharan Africa, 49 low-income countries • UNHCR reproductive health package costing 5 WHAT has been done at the World Bank? Q4 What are the challenges and lessons learned? Selected World Bank Publications on Health Financing for Fragile States: • Financing for Fragile and Conflict-Affected Countries website • Performance-Based Contracting for Health Services in Developing Countries: A Toolkit • Cost-Effectiveness Analysis of Results-Based Financing Programs: A Toolkit • Incentivizing Nutrition: Incentive Mechanisms to Accelerate Improved Nutrition Outcomes • Performance-Based Contracting for Health Services in Developing Countries: A Toolkit • Delivering Services to the Afghan People • Results-Based Financing for Health • Contracting for the Delivery of Community Health Services: A Review of Global Experience BOX 4. Voices From the Field Common challenges emerging from TTL interviews on Performance-Based Financing (PBF) in FCV settings • Focus primarily on supply of services but not demand side • Possible resistance • Potential cost increase • Verification may be difficult • Limited capacity of providers • Ensuring equitable distribution of incentives • Workload of community health workers Common challenges emerging from TTL interviews on contracting in FCV settings • Sustainability • Difficulty in measuring performance • Lack of government capacity building and stewardship • Lack of competition • Fragmentation of care • High management cost Common challenges emerging from TTL interviews on FCV country health financing system Key Lessons Learned • Even in FCV settings or a fiscally constrained situations, it is possible for government to increase financing toward RBF/health system improvements • Implementing major health financing changes (e.g., RBF) requires progressive and sustained engagement • It is crucial to have clear priority setting, and design a unified basic package of health services 6 • Be flexible and innovative to adapt PBF design to contexts • Provide substantial flexibility and autonomy to service providers • Conduct independent, frequent, and robust Monitoring and Evaluation (M&E) • Analytical work should go hand-in-hand with operations and implementation of projects • Avoid fragmentation of health systems • Strengthening health financing functions serves both to strengthen health system and enhance efficiency of donor support • There is sufficient private capital looking for social investments, but there is a lack of intermediaries presenting these opportunities to investors in a language and with metrics understandable and relevant to them • Blended/donor capital is critical to accelerating the adoption of these instruments over the coming years Portfolio Summary Other health Country RBF Contracting financing topics Project title Afghanistan Yes Yes RBF impact Strengthening Health Activities for the Rural evaluation Poor (SHARP) (P112446) Afghanistan: System Enhancement for Health Action in Transition Project (P129663) Burundi Yes No P156012—Health System Support Project (“KIRA”) DRC Yes No P147555—Health System Strengthening for Better Maternal and Child Health Results Project (PDSS) Congo Yes No P143849—CG Rep. Health Sector Project Haiti Yes No UHC P123706—Improving Maternal and Child Health through Integrated Social Services P167512— Strengthening Primary Health Care and Surveillance in Haiti P164060—ASA on Universal Health Coverage and Pandemic Preparedness in Haiti Liberia Yes No P128909—Liberia Health Systems Strengthening CAR Yes No P164953—Health System Support and Strengthening Project P119815—CF-Health System Support Project South Sudan No Yes South Sudan Health Rapid Results Project AF (P156917) Zimbabwe Yes No UHC Health Sector Development Support Project (P125229) Zimbabwe Health Sector Development Support Project AF II (P156879) Zimbabwe Health Sector Development Support Project III—AF (P163976) 7 HOW should we evaluate instruments and strategies for Q5 purchasing? • Many health financing instruments and interventions for purchasing are systematic and complex, therefore intrinsically different to evaluate. • A World Bank study to evaluate the different financing instruments and strategies and identify the best instruments and lessons for different FCV contexts is forthcoming. • Results-based financing has been evaluated in some FCV countries, and toolkits and step-by-step hands-on guides are available. FIGURE 3 Evaluation of Results-Based Financing (RBF) 1st Question: Does RBF Work? 2nd Question: How Can RBF Work Better? What are the Quantity of right levels of service rewards? delivered What are the key Who Market effect organizational should be and provider Quality of building incentivized behavior service delivered blocks to in supply-side change make RBF interventions? work? Health status How can RBF of the work better? population How does provider Who Equity of Resource knowledge should be service access management affect their incentivized and at health reaction to in demand-side utilization center performance interventions? rewards? How to Non-RBF reduce services reporting delivery errors and corruptions? Typical data sources Typical evaluation designs Stakeholder interviews Qualitative Patient and provider survey Quantitative Facility survey • Experiment Household survey • Natural experiment Medical record • Quasi-experiment (before and after, difference-in-difference, interrupted time series, regression discontinuity) Health information system Program data Payment records This FCV Health Knowledge Note highlights operational tips to resolve health issues in FCV situations. The notes are supported by the Middle East and North Africa Multi Donor Trust Fund and The State and Peacebuilding Fund (SPF). The SPF is a global fund to finance critical development operations and analysis in situations of fragility, conflict, and violence. The SPF is kindly supported by: Australia, Denmark, Germany, The Netherlands, Norway, Sweden, Switzerland, The United Kingdom, as well as IBRD. Author: Di Dong, Health Economist, Health, Nutrition and Population Global Practice, World Bank Group. For more information on other HNP topics, go to www.worldbank.org/health 8