Economic Growth and Health Expenditure Implications for Financing Pre-Service Education 1 Dr. Ariel Pablos-Mendez Assistant Administrator, Global Health, USAID

1960s1990s End of Euro- colonialism End of the Cold War 2010s The Grand Recession A new chapter in global health history Tropical Medicine International Health Global Health A New World Health? 2

Unprecedented economic growth across the globe 3

Number of people living in poverty ($1/day) Source: Frontiers in Development conference,

Log GDP/capita Source: Jacques van der Gaag; WHO/IMF Lo g T ota l Healt h Expenditures/Capita N= 178 R2 = 94% “The first law ofhealth economics”

The Cost of Basic Health Services $‐ $20$20 $40$40 $60$60 $80$80 $100$100 $120$120 T o t a l H e a l t h E xp e nd i t u r e p e r ca p i t a ( $ U S, c u r r e nt p r i c e s ) THE/KTHE/K CMH $38assuming 2.5%inflationCMH $38assuming 2.5%inflation TFIF $54 assuming 3.5% inflation compared to inflation adjusted CMH target ($38 in 2002 prices) and TFIF target ($54 in 2005 prices) YearYear 6

USAID-assisted countries can now/soon buy essential package of health services 7

ODA now a smaller share of total capital flows 8

Default scenario: An explosion of unregulated private provision paid out-of-pocket, an inefficient and regressive form of financing 9

A window of opportunity in the transition 10

Weak health systems present a binding constraint to progress 11 “…we will not be successful in our efforts to end deaths from AIDS, malaria, and tuberculosis unless we do more to improve health systems around the world…” President Obama May 2009

Focusing on Human Resources for Health- Integral to Health Systems Strengthening 12 Health workers are the cornerstone and drivers of the health system Shortage of approximately 1.5 million health care workers in Africa alone (WHO, 2008) can inhibit ability to reach MDGs, UHC, and post-MDG agenda Many countries have made significant strides in addressing HRH constraints of which many strategies have focused on pre-service education Increasing health expenditures in many African countries creates opportunities for directing more resources to health worker scale- up

Source: Lancet 2010; 376: Investment in total health expenditure and health professional education

Resources Needed for HRH scale-up 14 Financing needed to address supply side constraints such as health worker education along with financing for increased remuneration to allow adequate absorption of graduates into the health system. Requires extensive stakeholder engagement and coordination from across MOH, MOE, MOF, PSE institutional leaders, professional associations, regulatory bodies, and the private sector Increased engagement also enables policy change needed to overcome other barriers to health worker scale-up (e.g. regulatory, roles of private sector)

India Brazil TimeTime Numbe r o f medica l schools New medical schools (public and private) in India and Brazil Source: Lancet 2010; 376:

Innovative Financing for Pre-Service Education Mobilizing additional resources 16 Alumni and diaspora Private for-profit investors Private foundations/ Religious communities and institutions Tuition Research funding Source: Tulenko and Preker, 2012

Increasing Cost-Efficiencies of Pre-Service Education More effective and efficient management of education and training resources can increase a school’s ability to scale up the production of qualified graduates. USAID has developed a business model approach with tools that support school management to develop and prioritize solutions for better utilization of existing resources Highlight: Estimating the Unit Costs of Producing a Health Worker 17 Results from a pilot study in South Africa found that reducing student dropout and repetition rates would have a greater impact on reducing unit costs than increasing student enrollment. For example, increasing the graduation rate to 100% would reduce the unit cost by 33%. Source: USAID CapacityPlus

In order for countries to be able to achieve UHC and broader health goals through the delivery of high quality services, investment in Human Resources for Health needs to be comprehensive to ensure that new graduates are absorbed by the health system, well- supervised and supported. Strengthening Human Resources for Health- A Comprehensive Approach Photo courtesy of Intrahealth International 18

The current trends in economic growth in Africa present opportunities for increased government spending on health and overall strengthening of health systems. While additional resources are available, cross-sectoral stakeholders need to engage and commit to policy changes for overcoming barriers to health worker scale-up. Pre-service institutions should consider innovative financing approaches and more effective management practices to increase efficiencies and better utilize resources. 19 Key Messages