Background: Since 2002, there have been unprecedented increases in external assistance for HIV/AIDS from mechanisms like the US President's Emergency Plan for AIDS Relief, the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the World Bank’s Multi-country HIV/AIDS Program. While this surge in funding is a welcome development, perhaps more critical than the amount invested is how those funds are spent and whether or not they are meeting intended targets. Without this information, stakeholders of recipient countries are poorly equipped to make resource allocation decisions and track the impact of received funds. Recognizing this need, many countries are using a standard resource tracking tool called National Health Accounts to produce focused expenditure reviews, or “subaccounts,” on HIV/AIDS. Most of the literature on this subject compares commitments and disbursements due to the availability of that data. Building on those analyses, this paper incorporates country-derived data that go one step beyond disbursements to reveal actual health expenditures on HIV/AIDS. With valuable trend data now available, this analysis looks at shifts in financing patterns from before the major donor surge of HIV/AIDS resources, to years after that surge began.
Methodology: Drawing from country subaccount data, this paper aims to describe changes in national HIV financing patterns for Kenya, Malawi, Rwanda, Tanzania, and Zambia before and after the influx of external financing for HIV/AIDS. With the influx of funds arriving in countries approximately in 2004, the “pre-influx period” occurs before 2004 and the “post-influx period” after 2004. Each country subaccount describes the flow of HIV/AIDS resources from their sources (public, private, and donor) to their end uses.
Findings: The total resource envelope for HIV/AIDS has increased universally among the study countries, largely due to the influx of donor funding. Donors contributed at least two-thirds of all spending on HIV/AIDS post influx. Spending per person living with HIV has decreased in all countries except Malawi. While people living with HIV (PLWHA) spend more for health care than the general population, this gap has narrowed substantially since the donor influx. For example in Zambia in the year 2002, the average expenditure by a person living with HIV was 485 percent higher than that incurred by someone in the general population and just 23 percent higher in the post-influx year of 2006. By adopting a more rigorous methodology, the Kenya AIDS Indicator Survey 2007 showed that PLWHA spent 56 percent more out-of-pocket on health care, on average, than the HIV-negative population. One observes a shift from spending in the informal sector to increased resource consumption at hospitals, health centers, and clinics. There has been a spending increase in private for-profit hospitals in all countries and an increase in public hospitals in four of the five studied countries. Spending at traditional healers dropped by 23 percent (on average) compared to pre-influx levels. The donor HIV influx was designed to be largely supplemental to local investment; however, in three of the five countries, government HIV contributions decreased in absolute terms compared to pre-influx levels. Domestic private company investments in HIV/AIDS also decreased in four of the five countries, in some cases by over 60 percent of pre-influx levels (Kenya, Rwanda, and Zambia). Since the influx of donor funding began, the relative shares of HIV/AIDS funding controlled by government and donors have increased in general; however, shares controlled by private firms have decreased in all countries except Tanzania. Finally, while the donor funds have increased substantially, a considerable proportion of these funds went to public health and prevention programs rather than curative care. In Kenya, less than 1 percent of donor funding was spent on health administration in 2002, but the share increased to about 21 percent in 2006. Similarly, government investments spent on public health programs and health administration have largely increased since the influx.
Significance: Positive consequences of the surge in HIV/AIDS resources include reduction of spending on health by PLWHA and decreased spending in the informal sector likely due to increased awareness and physical access of subsidized HIV treatment and care from the formal sector. However, the findings suggest that increases in external resource investment and management have implications for sustainability of HIV/AIDS programs, possibly displacing government investment in the response and prompting crowding-out of the private sector. It is critical to continue monitoring countries’ health sectors through shifts in health financing. Regular data collection on country-level expenditure on health is critical for identifying strengths and weaknesses within the health system.