Using Development Assistance for Health (DAH) to Strategically Purchase Health services: Experiences, Lessons, and Options for Uganda

Through the Uganda Health Sector Development Plan (HSDP) and other policy pronouncements, Uganda has committed to accelerating progress towards achieving Universal Health Coverage (UHC) by 2030, wherein all Ugandans will have access to good quality health services without fear of financial risks. The Global Framework for Health Financing recommends an allocation of US$86 per capita to finance a Minimum Health care package and make progress towards UHC. The latest National Health Accounts (NHA) for Uganda, indicates that health expenditure is nearly 40% below this target at US$51 per capita. By examining the sources of these funds, the problem becomes clearer. Government contributes (15.3%), while Development Assistance for Health (DAH) and private funds contribute 41.7 % and 42.6% respectively. Prepayment schemes contribute less than 2% of the total health expenditure. Vital reforms to pool funds from household out of pocket (OOP) expenditure into a national health insurance scheme that can be a strategic purchaser, remain stuck on the policy agenda. In situations where DAH is a significant contributor of health resources, like the case is with Uganda, how can DAH be best pooled to advance strategic purchasing?

In Uganda, DAH is provided through on-budget and off-budget support. Over time, pooling of DAH through on-budget support has declined compared to the SWAP years while off-budget support has grown exponentially mostly due to pressure to achieve results related to the global health initiatives in the MDG period. This presents a challenge. As DAH focused more on results related to MDGs, it became fragmented, making efforts to address country level UHC goals more challenging. The reasons for increasing off-budget support may need a deeper investigation, although anecdotal evidence points to increasing frustration of donors with government bureaucracy, weak transparency and accountability, and other political economy concerns. DAH fragmentation has led to higher administrative costs, ineffective service delivery and coverage and opportunistic behaviors. Can DAH find a single pool to enable purchasing to be more efficiently done to achieve Uganda’s UHC goals?

DAH & Health Sector Development in Uganda: Could the devil be in the detail?

Uganda’s health expenditure tracking reveals a number of critical issues pertaining DAH. First, off-budget support is generally project based, verticalized, or disease specific majorly for HIV/AIDS, Tuberculosis and Malaria; and more recently Reproductive Maternal Neonatal and Child Adolescent Health (RMNCAH) and non-communicable diseases (NCDs). Funding for HIV/AIDS has made tremendous impact on the AIDS scourge and remains an example of DAH’s vital role in averting death, improving lives and wellbeing for situations where domestic resources are inadequate. Secondly, most DAH projects are short-lived, lasting 3 to 5 years, characterized by a cycle of raised expectations, short-term provisions, good results but patchy coverage and poor plans for sustainability.  Sometimes, aid commitments have not been consistent with actual disbursement which increases volatility of funding. More importantly, DAH is increasingly linked to the displacement of domestic financing or the fungibility effect of aid on local resource allocation. Studies in Uganda have demonstrated that external support crowds-out domestic financing for health.  Decision makers in Uganda have a long-held belief that relatively more resources are available to the health sector from development partners and thus hesitant to allocate domestic resources to the health programs.

DAH still remains critical to health financing and health systems strengthening in Uganda, particularly as a source of complementary funding for the government. However, in the long term, more sustainable health financing models are necessary.

Using DAH to purchase health services: Strategic purchasing options for Uganda.

For health systems – like Uganda’s – that have constrained fiscal space, strategic purchasing for health is imperative. While DAH has dominated financing in Uganda’s health sector, there are indications that external resources are declining. In light of this, Uganda must seek to harness strategic purchasing opportunities with domestic resources as well as DAH. Three major areas provide opportunity for reflections on strategic purchasing and lessons worth sharing from Uganda:

What to buy with DAH: The question of what to buy is one of identifying a minimum package of essential services. Uganda’s burden of disease studies have noted that more than 60% of the disease burden could be addressed if preventive and promotive services are implemented, while cost savings from averting preventable illnesses would free up system resources to focus on more critical areas. DAH could support the purchase and provision of more preventive services. The UHC Roadmap for Uganda proposes prioritizing a package of preventive programs and ensuring scale-up and expansion of coverage and access for these programs. Key priority areas include expanding and sustaining access to family planning services and commodities, effective malaria control in the community, immunization and vaccination, behavioral change for both communicable and NCD prevention, and community health programs that address the social determinants of health – hygiene, safe water, nutrition, housing and economically gainful opportunities.

From whom to buy:

This is concerned with identifying service providers who can guarantee quantity and quality of the selected health and related service packages, while maintaining a high level of efficiency.  Uganda has a mixed delivery system with public and private health providers playing significant roles. Both public and private sectors have strengths and limitations in provision of services, so synergy is critical. Opportunities for enhancing service delivery models and partnerships exist such as the Community Health Workers (CHW) who already provide a defined package of services, and can be organized, contracted and paid to offer preventive and health promotion services. The CHWs are already being engaged with the fight against Covid-19 at community level as community transmission phase rages on. The Medicine Retail Sector (MRS) has a wider geographical coverage including wide networks in remote and geographically disadvantaged area. The MRS is widely known as a first point of call for many people who seek health services. Treatment for malaria and other basic medicines and services in Uganda are majorly accessed through the MRS, and indeed this sector has demonstrated it can successfully provide additional services such as family planning, and therefore the MRS should be part of the discourse. Additional investments are needed to organize the communities and retail sectors to be capable entities for contracting.

How to buy: In Uganda, most DAH financing is channeled through third-party fund-holders who work with service providers at different levels of the health care system. Three approaches that are increasingly being used in Uganda to purchase services are: contracting-out, results-based financing (RBF), and collaborations and partnerships.

  • Under contracting-out, the purchaser contracts a third party to provide goods and/or services. For example, Health Communication Partnership (HCP) funded by USAID and other partners, is contracted to develop and implement communication strategies for social and behavioral change communication for HIV prevention, care, treatment, and support; sexual and reproductive health of young people; family planning; malaria control, etc.
  • Under RBF, purchasers, develop contracts with service providers which specify agreed quality and quantity of services to be provided to specific targeted populations. Payments are contingent on completion of verifiable output targets. In Uganda, MOH is currently institutionalizing RBF, and has already developed the National RBF framework. The first RBF institutionalization effort under the World Bank funded Uganda Reproductive Maternal and Child Health Improvement Program (URMCHIP)  aims to improve RMNCAH services nationwide.
  • Collaboration and partnerships. Partnerships may help contain unnecessary service delivery costs, leverage synergies and provide opportunity to build capacity within a wide set of entities to support health goals. There are already positive experiences and benefits where partners are working with local governments, non-state actors and community based civil society organizations to provide a range of services. Partnerships, however, require a strong mechanism for coordination.

Feasible proposals going forward!

In the past, DAH has been central to Uganda’s health systems development. As DAH has become unreliable and unsustainable, there is a need to rethink mechanisms of enhancing the effectiveness of DAH through strategic purchasing arrangements, so as to optimize benefits from this funding source. In this regard, we propose:

  1. Deliberate effort to coordinate and pool DAH and develop consensus on priorities for investment and equitable distribution of donor resources to all the regions of the country.
  2. Develop a shared agenda and consensus around a framework for progressive expansion of the population covered with sustainable and affordable services and providers of the service package as envisioned in the UHC Roadmap and Health Sector Development Plan.
  3. Prioritize a package of preventive and promotive services that are affordable, sustainable and delivered by providers with a clear mandate of providing preventive services and different from those that offer curative services.
  4. Contractual arrangements should ensure agreements are anchored in service delivery models that are feasible to scale-up and sustain based on community-level and domestic resource profiles.
  5. Partner with the government and civil society to build sustainable models for strategic purchasing for both preventive and curative services as well as the social health insurance in the long-term.

This Blog was written by Mayora Chrispus, a Health Economist and Member of the SPARC Team at Makerere University School of Public Health, Uganda.

Acknowledgement: The author acknowledges and appreciates the contribution of the SPARC Team at the Department of Health Policy Planning & Management, School of Public Health, Makerere University, Uganda. The team includes: Prof. Freddie Ssengooba, Dr. Elizabeth Ekirapa-Kiracho, Dr. Aloysius Ssennyonjo & Mr. Richard Ssempala..

Using Development Assistance for Health (DAH) to Strategically Purchase Health services: Experiences, Lessons, and Options for Uganda

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