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Financing health facilities directly: What is all the fuss about?

02 May 2023

On June 1, 2023, at 9:00 AM-EST, ThinkWell hosted the third installment of the Counterpoint webinar series titled “Financing health facilities directly: What is all the fuss about?”

During this webinar, we explored the topic of financing health facilities directly.

Watch the recording

There is a growing consensus that granting health facilities in the public sector more funds and greater autonomy is critical for improving primary health care (PHC) delivery. This was one of the themes highlighted by the Lancet Global Health Commission on financing primary health care, which found that public sector PHC facilities could retain and manage funds in fewer than 40% of low- and middle-income countries (LMICs). The report noted that direct financing for public facilities will allow them to improve service readiness and responsiveness. It is also a necessary precondition for them to feel incentivized by signals from public purchasing entities attempting to advance health system goals like improved access, equity, quality, and efficiency. There has been a spate of papers on the topic recently, including by the World Health Organization (WHO) and the World Bank.

And yet, giving health facilities greater financial autonomy is not a new idea as such. Many types of management entities to produce goods and services have been around for centuries. More critically, the merits of granting hospitals autonomy have been debated extensively as part of the new public management discourse since the 1980s. Not everyone is convinced. Some feel that local governments are better positioned operationally to manage service delivery instead of expecting each facility—including small health centers and dispensaries—to manage their own affairs.

In this webinar, we had a candid conversation with two leading voices on the topic about why the push for getting more funds and management of service delivery to the frontlines and why some continue to challenge the idea. We discussed why this is an important issue for LMICs to explore as they develop and execute strategies to make progress towards universal health coverage. ThinkWell Senior Fellow, Nirmala Ravishankar hosted the webinar featuring two experts:

 

 

 

 

 

Nirmala Ravishankar is a Senior Fellow at ThinkWell.

Sheila O’Dougherty is a health financing and management expert who retired from her position as Vice President at Abt Associates in 2020. Sheila led USAID-funded health systems strengthening project implemented by Abt Associates that supported far-reaching government reforms to enable direct financing for public facilities in Central Asia and Tanzania. She is the lead author of joint WHO-World Bank brief on direct financing for health facilities.

Edwine Barasa is the Director of the Nairobi Program of the KEMRI Wellcome Trust Research Program in Kenya. He was instrumental in documenting how health facilities lost financial autonomy when Kenya devolved key decision-making powers from the central government to newly formed county governments and has published extensively on the question of decentralization and facility autonomy.

Some of questions we posed to these experts are as follows:

  1. What does it mean to directly finance facilities? Why the focus on financial autonomy?
  2. Have countries done this before? What does their experience teach us?
  3. Many countries have pursued devolution of decision-making powers to local governments. Is that the same thing? Is that not enough?
  4. Are there any risks to giving more money and control to public facilities? How can they be mitigated?
  5. Where is this agenda headed? What should health financing analysts be exploring? What should health financing policymakers and practitioners be doing?

Counterpoint is ThinkWell’s signature series of webinars that offers a platform for free and frank debate about questions related to health system strengthening. Through these honest discussions, we strive to both challenge dominant paradigms and scrutinize new trends to ascertain their merit.