Despite many challenges, performance-based funding provides powerful incentives to scale up the fight against HIV, TB, and malaria. It also has more general implications for the delivery of development and health finance. At its best, performance-based funding combines the inventiveness of country solutions with the sharp focus and incentives of performance, ensuring people receive services with urgency. Most country programs have been able to make the money work, in poor countries and fragile states, across the three diseases and with civil society and government implementers. However, there is considerable inherent risk in the results we can expect from health programs and finance. The variability in returns in health programs (well-performing programs return twice the results) is not always recognized and needs to be actively managed with financial incentives and technical support.
A major question is whether funding for specific diseases like AIDS, TB, and malaria (“vertical financing”) has positive or negative effects on more general or “horizontal” health systems. The Global Fund provides “diagonal financing,” with a sharp focus on achieving disease goals while allowing finance to more broadly strengthen the supporting health sector. As health programs keep scaling up, the major gap in health systems strengthening is increasingly obvious. Such strengthening requires dedicated finances and increasing flexibility in disease-specific financing to fill key gaps in capacity. Due to the flexibility of Global Fund financing in supporting services and systems, countries with weaker health systems or human resources for health did not perform significantly worse (25% and 26% poor-performing compared to 25% for all grants). Global Fund finance can be delivered “vertically” to AIDS, TB, and malaria control programs or “horizontally” through pooled or sector-wide approach funding (for example in Ghana or Mozambique). Many effective programs have used Global Funds “diagonally” to effectively finance AIDS, TB, and malaria services, while building the necessary supporting systems, including human resources.
On the ground, flexible finance is critical. When AIDS and malaria programs extended their services to rural areas of Ethiopia, they found that 30,000 community health workers needed training and community health posts needed refurbishing, which the Global Fund was able to support. In Haiti, a 14-month study showed that the Global Fund HIV program resulted in increased vaccinations, prenatal care, family planning, and flow of essential medicines, improving staff morale and health center capacity [8
]. However, many programs do not use Global Fund finance as flexibly and effectively, and we need to “mind the gap” financially in health systems. Reaching the MDGs will require US$67 billion for human resources for health [7
]. Other donors are urgently required, particularly for financing long-term, systematic health infrastructure [9
]. If the MDGs are to be achieved, significant increases in finance and innovative mechanisms will be required to ensure that funds are delivered effectively. Performance-based funding may be one important mechanism to provide focus, incentives, and risk management in AIDS, TB, malaria, and health systems financing. 3