Sustainable Health Financing in the Asia-Pacific Region: Significance and the Way Forward

Under the 77th World Health Assembly (WHA) theme of “All for Health, Health for All,” the WHA announced its 14th General Program of Work that considers 2024 to 2028 as a window of opportunity to build resilient health systems by improving health service coverage and financial protection to population facing inequalities. This vision reflects global initiatives to enhance access to quality care in vulnerable regions, such as a memorandum of understanding (MOU) signed by the Asian Development Bank (ADB) and the Global Funds to Fight AIDS, Tuberculosis and Malaria (the Global Fund) on April 17. The MOU aims to develop various financing tools to enhance access to primary health services, control infectious diseases and achieve universal health coverage (UHC) in the Asia-Pacific region. Specifically, the MOU pledges to design sustainable health financing tools by engaging domestic government funds and increasing efficiency in the use of scarce financial resources.  

Why Does This Matter?

Promoting the overall well-being of all people requires achieving UHC and providing primary health care. Yet, the world is not on track to meet these targets outlined in the Sustainable Development Goals. In 2021, South Asia (SA) had a regional UHC service coverage index of 59 out of 100, which was lower than the world average of 68 and the East Asia and Pacific (EAP) average of 75. These numbers demonstrate both disparities in the broader Asia region and the need to improve the accessibility of quality services.   

Enhancing UHC would require countries to strengthen their health systems, which is a long-term effort that requires commitment and sustained financial input. With external funding from stakeholders like the ADB and Global Funds limited by set cycles, the ADB-Global Fund MOU recognizes the importance of having governments invest more in domestically funded UHC programs and decrease reliance on external funding.  

This signal is particularly relevant to EAP and SA. While EAP’s domestic government health spending as a percentage of current health expenditure has declined since 2011, it still exceeds the world average. In contrast, SA governments contribute significantly less to health expenditure compared to the global average of 62.88%, with only 32.33% in 2021. Crucially, government health spending as a percentage of gross domestic product (GDP) in both EAP and SA regions falls below the global average, suggesting significant room for governments to increase their health investments. These statistics underscore the fact that health funding in these regions is far from self-sustaining, primarily due to limited domestic contributions.  

Global Focus on Health Financing Sustainability

The ADB-Global Fund MOU reflects global discussions and initiatives to make health financing more sustainable. In November 2023, the Global Fund signed a similar MOU with the World Bank to support more efficient, effective and sustainable financing to improve health outcomes in the context of climate change. Since 2017, these two organizations have jointly supported health programs in many countries, including India and Indonesia by investing with blended financing mechanisms.  

Engaging governments to ensure program sustainability is also gaining more weight in international development. For example, the World Bank’s health projects tend to include some form of government commitments as project outcomes. Whether that commitment takes form in passing relevant policies or securing government budget for health, the move recognizes the importance of strong governance in a well-functioning health system and emphasizes government determination to improve health outcomes. 

More broadly speaking, with slowing global growth and rising interest rates, the external debt of developing economies doubled from a decade earlier to $9 trillion as of the end of 2021. This increase in debt burden suggests the need to prevent countries from falling into debt traps. Specifically, since some aid is given to countries in the form of loans, aid agencies need to consider developing countries’ economic prospects when delivering funding, as it should strive to create concrete economic and health benefits.  

The Way Forward

The ADB and Global Funds MOU is an example of collaboration between various types of stakeholders, namely international organizations, public-private partnerships and governments. By bringing global expertise and local resources together, these types of partnerships underscore local capacity building, which could lead to longer-lasting impact.   

In this case, programs could start with directing local government investments into small-scale projects such as local malaria and TB prevention and treatment. Given the long-standing inclusion of disease combat efforts in EAP and SA countries’ agendas, ADB and the Global Fund can leverage local expertise to develop customized frameworks for local context, enhancing program practicality and sustainability. This could pave the way for broader MOU expansion into other areas using similar implementation approaches.  

Of course, securing government health investments is not the only way to make health financing more sustainable. Since external aid is still necessary for EAP and SA, seeking reliable funding sources from organizations like ADB and the Global Funds is still needed. The WHO Investment Round announced during this year’s World Health Assembly is an example of such actions to generate more flexible, predictable and resilient funding for international development. Furthermore, stakeholders should consider incorporating economic development elements into their projects. This approach is crucial as tangible economic growth provides governments with greater financial resources to allocate towards health initiatives, fostering independent and sustainable health financing in the long run. 

This piece is from APCO’s Asia Pulse Newsletter.