Assessing Fiscal Space For Health: Rwanda Case Study

Presenter: Chris Lane

World Bank, HD learning week

November 13, 2008

Acknowledgements

Fiscal space paper drafted with Pablo Gottret, June 2008. Contributions from Agnes Soucat, Banefsheh Siadat, Laurence Lannes, Annika Kjellgren (all World Bank) and Sabine Furure (UNICEF).

With special thanks to officials at the Rwanda Ministry of Health.

Outline of presentation

Context Scale up health financing and improving

health status MBB costings (marginal budgeting for

bottlenecks) Fiscal space scenarios Risks and policy implications

Why is fiscal space for health needed? 2005 health outcomes are similar to sub-

Saharan Africa average. However: fertility rate is above average; HIV prevalence rate among adults is lower than average.

Malaria is the principal cause of morbidity and mortality.

Life expectancy and U5 mortality are in line with income per head.

Economic growth and aid per head are above SSA average

Rwanda aims to continue improving health status through 2015.

Health financing expansion

Rwanda Health Financing US$ per capita,2003 prices and exchange rates

3.8 4.2

2.8

6.8

5.8

13.9

0.60.7

0.5 0.4

0

5

10

15

20

25

30

2003 2006

US

$ pe

r ca

pita

, 20

03 p

rices

and

exc

hang

e ra

te

Not specified

Rest of the World (Donors)

NPISH ( Local foundations)

Households

Private Employers and other private

Parastatal Employers

Central govt. & other public funds

Source: Rwanda, National Health Accounts 2003, 2006

donors

government

households

Indications of progress to the health MDGs I

Total Fertilty Rate(births per woman)

5.8 6.1

4.3 4.2

01234567

Under 5 Child Mortality Rate(per 1,000)

196

152

9966

50

0

50

100

150

200

250

Sources: Rwanda Ministry of Health, Rwanda Economic Devt and Poverty Reduction Strategy

Progress to the MDGs II

Chronic malnutrition(percent of children under 5)

42 45

27 25

0

10

20

30

40

50

Maternal Mortality Rate(per 100,000 live births)

1071

750

353268

0200400600800

10001200

Sources: Rwanda Ministry of Health, Rwanda Economic Devt and Poverty Reduction Strategy

Simulation of health MDG costs using MBB

Rwanda: Fiscal Space for Health and Costs of MDGs(relative to 2005 baseline at constant prices US$ per head)

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US

$ p

er

cap

ita c

on

sta

nt p

rice

s

Additional spending needed forMDGs per head, MBB simulation

Sources: Rwanda Ministry of Health/ Unicef/ World Bank MBB simulations May 2008.

..

Progress towards the MDGs

% achievement MDG1 malnutrition goal 2006-08 2009-11 2012-14

Anaemia 51 72 90 Reduction of Low Birth weight 19 43 54 Estimated reduction in stunting 19 21 23

% achievement of MDG4

U5MR reduction 33 53 59 IMR reduction 32 51 59 NNMR reduction 25 45 56

% achievement of MDG5

MMR reduction 29 57 60 Lifetime Risk of Dying 31 60 78 Total fertility rate (TFR) 9 22 31

% achievement MDG6

Reduction of Malaria Mortality 68 66 79 Reduction in AIDS mortality 51 82 99 Reduction in TB Mortality 4 20 55

% achievements MDG7

Quality of drinking water 40 63 73 Use of sanitary laterines 39 62 72 Hand washing by mother 33 55 65 Cost per capita per year in US$, 2005 prices 8.83 19.98 29.35

Source: Government of Rwanda, MBB model spreadsheet June 2008.

Prospective fiscal space for health

Rwanda: Externally Financed Health Spending (US$ per capita)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

US

$ p

er

ca

pit

a NHA

2008 budget + off budget donors

NHA

Assuming external finance remainsAt $250 million per year from 2008

Source: Rwanda NHAs, 2008 Budget, 2008 health donor tracking, author’s assumptions.

Much depends on the US: Source of 50 percent aid for health

US Government Aid for Health, Rwanda 2007-2010

2007 2008 2009 2010

US$ millions PEPFAR (HIV/Aids) 103 123 123 123 PMI (Malaria) 20 17 11 5 MCH (Mother and child health) 5 8 9 9 Total 128 148 143 137

Source: Based on estimates from USAID, Kigali.

Health share of budget - macroframework

Rwanda: Govt Financed Health Spending Projections (US$ per capita)

0

2

4

6

8

10

12

14

16

US

$ p

er

ca

pit

a

15 percent of recurrent spending by 2015

Constant 8.3 percent of recurrent spending after 2010

Source: Rwanda, MoH; EDPRS, MTEF and author’s assumptions

Some technical factors

Financing gaps from 2011…

Rwanda: Fiscal Space for Health and Costs of MDGs(relative to 2005 baseline at constant prices per US$ head)

0

5

10

15

20

25

30

35

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

US

$ p

er

cap

ita c

on

sta

nt p

rice

s

0

5

10

15

20

25

30

35

High case

Low case

Source: MBB costings, authors estimates based on Budgetary framework,MTEF, EDPRS.

Fiscal space for health

MBB costings

Policy implications

Large increases in health financing have put health MDGs within reach. Expansion of fiscal space for health likely to slow or reverse as aid tops out.

Aid dependency of health sector will remain for the foreseeable future (now 80 percent, 67 percent by 2020 in financing scenario).

Long-term aid commitments are needed. Achieving the Abuja target also important. Efficiency gains will be needed to cover

financing gaps from 2011.

How to realize efficiency gains

Some mismatch between govt. health priorities and allocation of donor funds: despite aid surge (much of which focussed on HIV/AIDs

MoH reports in 2008 financing shortfalls in support for CH workers, human resources for health; rural health services; family planning and reproductive health.

Mechanism needed to improve donor alignment.

Government-Donor health compact could address the coordination problems.

Thanks for listening …..