The Third Catalyst Dialogue – on financing health for all – was launched at the 2023 Global Health Talk
High-level experts participated in a panel discussion at the Global Health Talk, where they debated recommendations for German policy-makers and parliamentarians on how to raise more funds for health at all levels: global, regional and national.
This year’s Global Health Talk took place at the Umweltforum in Berlin and served as the launchpad for the third Catalyst Dialogue policy paper, Financing health for all in the context of scarcity. Every year, GHHG members and leading global health experts join with high-level representatives from the German Government to discuss and debate highly relevant global health issues. This year, more than 200 participants and over 80 online attendees came together for this flagship event of the Global Health Hub Germany (GHHG).
Catalyst Dialogues are co-sponsored by the GHHG and the platform Healthy DEvelopments, supported respectively by the German Federal Ministry for Health (BMG) and the Ministry for Economic Cooperation and Development (BMZ). The first Dialogue focused on the Global Health Architecture and the second on Climate Change and Health. They aim to generate recommendations for the German Government that are critical for achieving SDG3 to ensure healthy lives and promote well-being for all at all ages.
During February and March, five distinguished representatives of academia, development cooperation, the private sector and multilateral institutions took part in individual interviews and then gathered for a virtual debate. Recommendations emerged from these lively discussions for how Germany, as a as a champion of global health, can strengthen health financing at national, regional and global levels.
Why a Catalyst Dialogue on health financing?
The COVID-19 pandemic and the economic crisis that it has triggered, have placed considerable pressure on both national health systems and the broader development architecture. Repeated shocks have laid bare the acute underfunding of health systems and institutions at every level, while climate-related crises continue to demonstrate the stark need for investing in health systems that are more agile, more resilient and above all more equitable.
Moderator Clemens Gros of Insights for Development, introduced the topic at hand with an 20 second resumé of the policy paper, saying ‘clearly we need to do something differently. How can we get financing for Health for All – and not for the few – right this time, especially in this ever-present context of scarcity?’ He then went on to pose the first of many complex questions, asking the panellists why so many of the recommendations emerging from the pandemic have not yet been taken up.
A paradigm shift is needed – in more ways than one
As Professor Dr Jayati Ghosh, who joined the panel by video link, reminded everyone at the outset,Health for All must be seen by all as an essential investment to achieve inclusive economic growth, and a just and more equitable society. This is the central theme of a series of policy briefs by the WHO Council on the Economics of Health for All, of which Jayati Ghosh is a member. She gave a clear and rapid summary of the Council’s brief on Financing Health for All, which served as a starting point for this Catalyst Dialogue and challenged the audience saying,
Let’s turns things on their head and think of how economic policies and the ways in which economies work get us to the goal of Health for All. The economy is in thrall to health – it is not the other way around.Jayati Ghosh
She went on to remind us that financing health can never simply be about certain curative or preventive practices; it is about financing health and wellbeing throughout the life-cycle and as such it requires a whole-of-government approach. Only governments can achieve this goal because markets will never do it.
Health must be seen as a global public good
Christoph Benn, Director of Global Health Diplomacy at the Joep Lange Institute, spoke eloquently about a second paradigm that is no longer fit for purpose, ‘for decades, we have looked at financing health through the paradigm of rich countries providing aid to poor countries. This was about solidarity and charity; richer countries did not necessarily expect a return. Perhaps this is why health has not been seen as an investment.’
This brought the discussion around to the topic of health as a Global Public Good. Christoph Benn and Jayati Ghosh advocated strongly for the concept of Global Public Investment (GPI). Christoph, who is a member of the GPI Steering Committee, gave a quick recap of the concept, ‘the principles of GPI hold that financing is a fundamental responsibility of all countries, which should contribute according to their ability because all benefit and all decide. This is a framework we increasingly need to use and one that will help to convince the budget holders’.
As a member of the GPI Expert Working Group, Jayati Ghosh wholeheartedly agreed, ‘these are fundamentally global challenges and therefore require global financing. The world decides where these global funds should go. This is as important for pandemic preparedness and response as anything else.’
However, getting the balance right between international and national responsibilities for financing Health for All is complicated and there was lively debate on this topic. Björn Kümmel, who has worked with Germany’s health ministry BMG for 15 years on European and international issues and is Vice Chair of the WHO Executive Board, pointed out that this is a very important year when it comes to global calls to invest more in health, with the forthcoming UN high-level meeting on UHC.
He further said that Germany and other countries have failed to hold policy makers in the countries they support to account for declarations and resolutions made in the aftermath of these global meetings, saying.
I do not share the notion that health is a global responsibility. Obviously we need leadership at the highest political level to call for stronger investment, but is this sufficient? We need to help countries understand that these are political and financial choices. Primarily the responsibility rests on domestic shoulders.Björn Kümmel
Nothing can be achieved without more domestic financing
There was, however, unanimity among panellists on where the vast majority of the funds that are needed for health will have to come from – and this is domestic resources.
Prof. Dr Wolfram Morgenroth-Klein, Head of Pandemic Prevention and Preparedness Division at BMZ, reminded us of the huge challenge that lies ahead, with USD10 – 14 billion per year still missing for pandemic preparedness, and more than USD50 billion per year needed for UHC. He also sounded a note of caution saying,
we will probably find that middle-income countries – even if they manage to increase their spending – will not be able to cover these gaps soon enough. There is a common feeling at the international level that efforts still need to increase. While most of these domestic funds for health will be public funds, realistically private citizens will have to foot part of the bill.Wolfram Morgenroth-Klein
So how can governments raise additional funds, while protecting the poorest from catastrophic health spending? For governments in low- and lower-middle income countries (LMIC), there are fairly limited opportunities, particularly when it comes to efforts to widen the fiscal space for health in countries with large informal sectors, and in the current economic context.
Countries can raise money through taxation reforms and can reallocate budgeted funds to health from other sectors. They can also remove – or at least reduce – harmful and regressive subsidies, such as fuel subsidies and redirect these funds to health. Borrowing is particularly challenging for LMIC because they must borrow in foreign currencies, placing them at the vagaries of unstable exchange markets and high interest rates. And of course, countries can also request funding from external sources, such as international development partners and private corporations.
Christoph Benn and Björn Kümmel both talked of Germany’s key role in strengthening the enabling environment for domestic health spending in partner countries, including programmes to develop the capacities of decision makers through the L4UHC programme, and support for the global health financing network P4H, which facilitates national and regional exchange to advance UHC through health financing and social protection systems development.
They also talked of the need to strengthen civil society platforms to enable them to hold their governments to account for the promises and commitments made, and Björn summed this up saying ‘in the end, what is needed is a strong call from societies and from people’.
How can global health actors help?
The conversation then moved to the role of global health actors in financing Health for All, at national, regional and domestic levels. Many potential solutions were debated with regard to this topic, not all of which can be represented here, but in brief, the following approaches formed the basis for fairly spirited debates.
There is widespread agreement on the need for debt restructuring and debt write-offs to lessen the burden for 60% of low-income countries currently in or at risk of debt distress. It is a sad fact that 37 LMIC spent more on debt service than they spent on health in 2020. However, debt-for-health swaps were more contentious, with Christoph Benn and Jayati Ghosh being strong advocates and Björn Kümmel pointing to the large proportion of debt that is now held by China and other countries outside the OECD, which lessens the influence Germany and other countries have in the longer-term.
Global taxation reforms were next on the agenda and are high on the list of potential solutions for Jayati Ghosh, particularly with regard to her work with the International Commission for the Reform of International Corporate Taxation (ICRICT), where she is Co-chair. ICRICT is campaigning for the introduction of a global minimum rate of corporation tax to force multinationals to pay a fair tax in all of the countries where they operate.
Jayati advocated eloquently for the taxation of the very wealthy and cited a shocking example from a study which looked at the effects of applying a 4 percent wealth tax to the 965 richest families in India. This would raise funds equivalent to 1 percent of India’s GDP – three times more than the central government’s entire health budget. The OECD is already looking at the introduction of global asset registers which would facilitate taxing very wealthy citizens everywhere, including countries of the global North.
Several panellists raised the issue of Special Drawing Rights (SDRs) which are a financing instrument issued by the IMF to governments, and provide a potential source of financing for countries facing crises. The aforementioned WHO Council is a strong proponent both of recycling existing SDRs, such as those held by Germany which would be donated to partner countries, and of a new issue of SDRs to Finance Health for All. As Jayati said, ‘it is the low-hanging fruit – it’s free money!’ However, a major challenge with this solution is that so few people, including policy makers, really understand how SDRs work and this necessarily reduces their priority with decision makers and advocates.
Leveraging private finance and strengthening public private partnerships
Panel members also pointed to the area of private investment as one where global health stakeholders play a critical role. However, getting the conditions right for private investment in health has proved challenging. Dr Morgenroth-Klein put this plainly; ‘It needs to be made clear to the private sector that as soon as we put public funds into the private sector, they must work towards the goals of the public sector, such as Health for All. This requires the creation of better regulatory frameworks both globally and bilaterally.’ He pointed out that Germany already offers technical assistance on how to do this – both nationally and regionally.
This brought up the thorny issue of intellectual property rights and Jayati Ghosh rightly expressed outrage when talking about what she sees as a ‘wholesale privatisation of knowledge’, citing ongoing challenges to regional vaccine production in Africa and the ‘vaccine grabbing’ that was seen during the pandemic. Ultimately this threatens the success of approaches such as GPI because it has created a high level of distrust by the global majority in the G7 nations.
Dr Morgenroth-Klein pointed to the need for a balance between regulation on the one hand and incentives for innovation and private investment on the other, echoing comments by Lesley-Ann Long who participated in the Catalyst Dialogue but was not present for the panel discussion. Private investors will only invest if the picture is clear and they see a longer-term return on their investments.
Let’s not forget about equity
The final question came from an audience member, Samia SAAD from CEPI (Coalition for Epidemic Preparedness Innovations), the global partnership working to accelerate development of and access to vaccines. Echoing the debate on the private sector, she pointed to the need to view health investments through an equity lens.
Germany made R&D commitments for vaccines and other tools – along with other G7 countries. None of them had equity terms in their R&D and clinical trial commitments and this is where the equity piece has to start. How do you enable national investments with an equity lens?CEPI member
Responses from the panel pointed to the need to build regional capacities and to enable risk-pooling and common pooling of funds for investment in R&D (research and development), diagnostics and vaccine development at the regional level. Along with global public investment, which may still be some way off, regional public investment between countries that are neighbours or share common concerns could be a stepping stone.
Room for Optimism
While the challenges are great, there is also room for optimism and progress is already being made across many areas. Dr Morgenroth-Klein talked of the advances seen in the Pandemic Fund negotiations where countries such as Indonesia, China, India, the Arab Emirates and now also Saudi Arabia are not only pledging contributions but playing a very active role in the debates. Bjorn Kümmel mentioned the strong signals coming from the current discussions on the financing of WHO, where some of the countries that have not traditionally contributed, now appear willing to do so.
Regionalisation is slowly taking shape with more development partners providing support to regional platforms. And finally, we should not forget the many examples cited by panellists where Germany is already leading by example, and acting as an ‘honest broker’ to support progress towards global health goals. But there is so much more to be done.
As Jayati said, ‘it just takes one big country to pave the way and others will follow suit’.