Study finds overall increase in developing country domestic health spending, some countries have reduced health budgets as donor funding increases

Apr 12 2010

Researchers on Friday released a study in the Lancet that found while "[m]ost countries in Latin America, Asia and the Middle East doubled their health budgets," countries in sub-Saharan Africa appear to have trimmed their health spending as donors have boosted their health aid, the Associated Press/Washington Post reports. 

For the study, the team of researchers "analyzed all available data for government spending on health in poor countries and the aid they received," noting an increase in international health aid "from about $8 billion in 1995 to almost $19 billion in 2006, with the United States being the biggest donor," the news service reports (Cheng, 4/9).

According to an Institute for Health Metrics and Evaluation press release, in the countries examined, "[o]verall domestic government spending on health doubled in low-income countries over 12 years to reach $18 billion in 2006, the study shows. That is three times as much as the amount of development assistance for health the governments received."

The release continues: "[I]n sub-Saharan African countries where many governments receive significant health aid directly, the aid appears to be in part replacing domestic health spending instead of fully supplementing it. The researchers found, in those countries, that for every $1 spent in health aid, governments shifted between 43 cents and $1.14 of their own funds to other priorities. Conversely, in countries where nongovernmental organizations receive most of the aid and then apply it to projects inside the country, government health spending appears to have increased. Both trends merit further research, the authors say" (4/9).

The study quantified "what has long been an open secret about international aid," that some "nations cut back on their own health spending after they get funding from wealthy donor nations," the Seattle Times reports.

"The findings aren't a surprise to global health insiders, said Richard Feachem, former executive director of Global Fund to Fight AIDS, Tuberculosis and Malaria. The Global Fund, which pools money from wealthy nations and foundations, requires recipient nations to maintain their own level of spending. But everyone knew budget shifting was going on," the Seattle Times continues. "'This is the first really serious and thorough effort to quantify this phenomenon,' said Feachem, now director of the Global Health Group at the University of California, San Francisco" (Doughton, 4/9). 

The study, which was funded by the Bill & Melinda Gates Foundation, also found debt relief had no effect on domestic government health spending, the AP/Washington Post writes (4/9).

An accompanying Lancet comment "cautioned against jumping to the conclusion that governments in developing nations can't be trusted to make the best use of aid money," the Seattle Times reports. "Funneling money away from national health ministries and into NGO-run programs, many of which focus only on specific diseases, could undermine government health systems that are crucial to things foreign aid rarely supports, like prenatal care, hiring health workers and buying drugs, wrote Devi Sridhar and Ngaire Woods, of the University of Oxford."

"We don't know what countries are doing with their own money once the donor money comes in," explained Christopher Murray, director of the Institute for Health Metrics and Evaluation (IHME) at the University of Washington, one of the authors on the study, the AP/Washington Post writes (Cheng, 4/9). The Lancet also features a viewpoint on the study (Ooms et al., 4/9).

Inthenews.co.uk adds: "The fact that governments are committing more of their own resources to health is crucial," said Christopher Murray, study co-author. "Aid from outside donors plays an important role but can fluctuate from year to year. Governments ultimately have to sustain themselves" he added (Garrod, 4/9).

According to the AP/Washington Post, the WHO's Andrew Cassels said, "Donors should be much more insistent about whether aid does add to health budgets. ... In the past, it was assumed that aid did good things, but we clearly need more data" (4/9).