Estimated donor commitments on global health efforts tripled from $15 billion in 2000 to $45 billion in 2006. Many sub-Saharan African countries also increased their expenditures on health care, particularly after the 2001 Abuja summit that asked African governments to commit 15% of their total budgets to health care. However, health care in Sub-Saharan Africa continues to lag behind the rest of the world despite decades of foreign assistance. The billions in dollars of international aid have not reduced the effects of out-of-pocket spending in the region. Out-of-pocket spending constitutes nearly 50% of the total health expenditure in Sub-Saharan Africa. The fact that this form of payment for health care is coming from an impoverished population is a source for concern.
Out-of-pocket payment is a major obstacle in access to quality health care and an important contributing factor to global poverty. This kind of payment impoverishes about 100 million individuals globally. The ILO estimates that more than 75% of low-income earners living on less than US$2 a day pay out-of-pocket up to 70% of their total health expenditure.
Despite the WHO calling for countries to reform their health systems to embrace universal coverage as a measure to drastically reduce OOP spending, funding has been a significant barrier to achieving universal coverage, particularly in low-income countries. To help fill the funding gap, donor aid has been critical in supporting health systems in Sub-Saharan Africa. Some countries such Rwanda and Mozambique have up to 80% of public funding for health care coming from donors.
While donor aid is crucial to health systems in poor countries, its effectiveness in reducing catastrophic and impoverishing OOP expenditures is unclear. It is also unsustainable in the long run. In Kenya for example, donor funding for health care increased from 4.5% of the total health expenditure in 1995 to a staggering 41% in 2009. Despite this increase, the number of people being impoverished as a result of OOP payments increased from one million individuals in 2005 to 1.5 million in 2009.
One may ask: Where are the donor funds going? They support stand-alone health operations, especially HIV/AIDS. Others are TB and malaria. These are important health concerns and without donor funds, the OOP situation could have been worse. Nevertheless, times are changing: malaria and HIV/AIDS infection rates are falling yet there are changes in epidemiological patterns. Emerging non-communicable illnesses such as diabetes and cancer are on the rise and have put substantial economic strain on households. Weak public health interventions and lack of financial protection mechanisms also mean that people will pay out-of-pocket for preventable infectious and non-infectious illnesses, many of which have huge financial implications to households.
A re-evaluation of health aid effectiveness in poor countries is necessary to ensure that donor programs are effective and reflective of a population’s health priorities.