Pandemic Financing: How the World is Funding the COVID-19 Response (Part 1)

Introduction

Many countries are scrambling to respond to the COVID-19 pandemic. The primary focus has been on strengthening health systems to improve surge capacity1,2. At the same time, countries are faced with the difficulty of balancing the demands of responding to the pandemic with the need to maintain the delivery of essential health services2. This increasing demand for health care can further strain health systems around the world. Thus, resulting in a dramatic increase in direct mortality from the outbreak and indirect mortality from preventable and treatable health conditions2.

A key challenge to the pandemic response is the struggle to reconcile scarce resources with many competing priorities. Many health systems, however, were already overwhelmed and underfunded even before the pandemic3. Unsurprisingly, the COVID-19 pandemic has caused a significant blow on the global economy, further constraining the fiscal capacities of economically-vulnerable countries3,4.

Timely policy actions are crucial to mitigate both the health and economic shocks brought about by the pandemic5. Therefore, governments must create a public finance environment that can provide sufficient funding to ensure a comprehensive pandemic response while also taking into account economic and fiscal constraints6.

How is the expression of health valuation and prioritization highlighted in the COVID-19 response?

Health financing policies are required to strengthen the pandemic response. Such policies should focus on (1) raising adequate revenues, (2) organizing these revenues to maximize risk-sharing across the entire population, and (3) mobilizing public funds so that they can be effectively translated into the provision of health services7.

Population-based services, such as comprehensive surveillance, data and information systems, and communication and information campaigns, take priority in the pandemic response. Funding these health services will help ensure that public health functions needed to respond to the crisis are all in place8. Unfortunately, in many countries, investment in the national capacity to prevent, detect, and respond to pandemics was not prioritized in recent years8. In some countries, a systematic financing response has not been established to help address these capacity gaps9.

Additional domestic spending can come from a mix of sources and is used to address different health system issues arising from the pandemic5. In Lithuania, the additional expenditure amounting to $386 purchasing power parity (PPP) per person was intended to cover equipment, salaries, and social security coverage10. In contrast, some countries, such as Bosnia and Latvia, have allocated less than $20 PPP per person from domestic resources for their pandemic response10. It is also interesting to note the variation of health spending across countries. Some countries have large additional budgets but have spent only a fraction so far. France and Croatia spend less than 2% of their regular health spending while Cyprus and Lithuania spend 12.4% and 27.2% of their regular health spending, respectively10.

The situation, then, begs us to ask the question, “How much additional funding should countries spend on their COVID-19 response?” Truth be told, it is difficult to determine the right amount of health spending for a pandemic response. The answer is probably context-specific and highly depends on the needs of the country. What is certain, however, is the fact that more additional funding will be required to meet the growing demand for non-essential health services together with the public health measures employed in the pandemic response. Undoubtedly, there will be higher health expenditure and more budget injections throughout the COVID-19 pandemic.

What are the challenges in financing the COVID-19 response?

In response to this, many countries have already reconfigured health service delivery to meet the immediate health care needs of their populations. However, a supportive health financing response is necessary to scale up both population-based and individual services, especially in countries that heavily rely on out-of-pocket payments1,8. Many of these countries were already experiencing significant gaps in health system coverage which can pose additional challenges to mitigating both health and economic shocks caused by the COVID-19 pandemic5.

1.  Inadequate sources of funding

Like previous public health emergencies (e.g. Ebola), the COVID-19 pandemic will again test public financial management systems in their capacity to support fiscal objectives. Challenges that these systems will face may come from (a) reassessing fiscal policy needs and identifying additional financial resources; (b) ensuring timely availability of funds to service delivery units; (c) tracking accounting for transparent reporting; and (d) ensuring business continuity11. Some countries will have an array of emergency response mechanisms at their disposal and most countries will utilize one or more of the available health financing tools to cope with emergency spending. Through public financial management systems, some governments have the capacity to activate contingency funds in emergency situations including pandemics5,6.

Arguably, major gaps in the health financing system are more challenging to address at the subnational level. In the Philippines, for example, funding level and spending capability vary substantially by local government unit. Some local government units have insufficient funds or sub-optimal budget allocation to implement an effective response to public health emergencies12. Thus, funding for a pandemic response may not always be allocated or readily available to support priority public health measures, especially at the subnational level.

Reprioritization through virements between government programs has been considered the primary action in securing budget funding for immediate pandemic response6. Private donations from individuals and local businesses have also been relied on as secondary sources of additional funding. Reallocating existing health budgets and private donations, however, may not be enough to fund health financing needs in the long run10. Conversely, many of the countries with low levels of an additional spending budget will eventually rely on funding from external donors such as the World Bank10.

2.  The need for timely and appropriate fund disbursement

More than the availability of funds, a financing mechanism is essential for the timely response to public health emergencies. Timely and appropriate financial decision-making requires a coordinated and harmonized governance structure across government agencies. The speed by which a country can respond to a public health emergency may depend on its public financial management system which establishes the rules and regulations for budget allocation and spending. In Australia and France, these rules are flexible which allowed for the rapid reallocation of program-based budgets and the immediate release of such funds to health care providers13.

An accelerated disbursement process will allow advance appropriation and fast-track payments to meet the spending needs of health systems. Several countries have explored different approaches to accelerate the release of public funds to government agencies and/or health service providers both in national and subnational levels14. In India, for example, procedures for fiscal transfers to subnational levels have been accelerated by authorizing emergency spending transactions without the approval of the Minister of Finance15.

In the Philippines, a quick response fund of the Department of Health is available and can be accessed when needed during times of emergencies and disasters. However, there is limited coordination and flexibility to reallocate or transfer the quick response fund to other key government agencies to support the response to public health emergencies12. The total turn-around time for the release of this fund takes about one to three weeks. When the disbursement of the fund is anticipated to last more than one week, the requesting office is asked to initially utilize their regular funds12. Hence, there is a need to enhance the capacity to optimize resource allocation by instituting innovative financing mechanisms that can hasten the disbursement of funds where they are needed most.

References:

  1. World Health Organization. How to purchase health services during a pandemic ? Purchasing priorities to support the. 2020;(April). https://www.uhc2030.org/blog-news-events/uhc2030-blog/how-to-purchase-health-services-during-a-pandemic-purchasing-priorities-to-support-the-covid-19-response-555353/.
  2. World Health Organization. Maintaining essential health services : operational guidance for the COVID-19 context. 2020;(June). https://www.who.int/publications/i/item/covid-19-operational-guidance-for-maintaining-essential-health-services-during-an-outbreak.
  3. Kurowski C, Evans D, Irwin A, Postolovska I. COVID-19 (coronavirus) and the future of health financing: from resilience to sustainability. Investing in Health. https://blogs.worldbank.org/health/covid-19-coronavirus-and-future-health-financing-resilience-sustainability. Published 2020. Accessed June 13, 2020.
  4. Development Aid. Financing of pandemic response: where does the money come from? https://www.developmentaid.org/#!/news-stream/post/62753/financing-of-pandemic-response-where-does-the-money-come-from. Published 2020. Accessed June 13, 2020.
  5. Thomson S, Habicht T, Evetovits T. Strengthening the health financing response to COVID-19 in Europe. 2020.
  6. Barroy H, Wang D, Pescetto C, Kutzin J. How to budget for COVID-19 response? 2020;(March):1-5. https://www.who.int/who-documents-detail/how-to-budget-for-covid-19-response.
  7. World Health Organization. Health systems governance and financing & COVID-19. https://www.who.int/teams/health-financing/covid-19. Published 2020. Accessed June 14, 2020.
  8. World Health Organization. Priorities for the Health Financing Response to COVID-19. DOI:10.1596/33738
  9. Glassman A, Datema B, McClelland A. Financing Outbreak Preparedness: Where Are We and What Next? Cent Glob Dev. 2018. https://www.cgdev.org/blog/financing-outbreak-preparedness-where-are-we-and-what-next.
  10. Cylus J. HOW MUCH ADDITIONAL MONEY ARE COUNTRIES ALLOCATING TO HEALTH FROM THEIR DOMESTIC RESOURCES? https://analysis.covid19healthsystem.org/index.php/2020/05/07/how-much-additional-money-are-countries-putting-towards-health/. Published 2020. Accessed June 18, 2020.
  11. Stone M, Saxena S. Special Series on Fiscal Policies to Respond to COVID-19 Preparing Public Financial Management Systems for Emergency Response Challenges 1. https://blog-pfm.imf.org/pfmblog/2020/03/preparing-public-financial-management-systems-to-meet-covid-19-challenges.html.
  12. World Health Organization. Joint External Evaluation of IHR Core Capacities of the Republic of the Philippines. Geneva, Switzerland; 2019. DOI:10.1142/9789812817945_0010
  13. Gupta S, Barroy H. The COVID-19 Crisis and Budgetary Space for Health in Developing Countries. https://blog-pfm.imf.org/pfmblog/2020/03/preparing-public-financial-management-systems-to-meet-covid-19-challenges.html. Published 2020. Accessed June 21, 2020.
  14. Barroy H. No calm after the storm: time to retool country PFM systems in the health sector. https://p4h.world/en/who-wb-no-calm-after-the-storm-time-to-retool-country-pfm-systems-in-health-sector. Published 2020. Accessed June 21, 2020.
  15. Verma A, Raj A. PFM Solutions in India to Combat the COVID-19 Pandemic.

 

Pen Point 48

Good news if we’ve truly flattened the curve. But have we improved our health system’s surge capacity? Some hospitals lack manpower and PPE. Ending the ECQ may mean well for the economy. However, without health systems strengthening and evidence-based measures to control community transmission, we’ll continue to strain our overburdened health care system.

Share the road

Due to the COVID-19 pandemic, the public transportation system was paralyzed to limit our mobility. Some government agencies, hospitals, and private organizations were quick to assist medical and non-medical frontliners in their day-to-day travel to and from work by providing other means of transportation such as free shuttle services. Notably, more bike riders are now seen on the streets due to various bike programs. Many of whom are health care workers, myself included.

However, even with the enhanced community quarantine, private vehicles continue to swarm the roads. Some of these vehicles deliberately disobey traffic rules (e.g. beating the red light) which increases the probability of road accidents. This makes it more difficult for bike riders or cyclists to navigate their way to their homes or workplaces.

More health care workers are now opting to walk or ride a bike to work. Thus, it is imperative for the government to reemphasize the importance of respecting traffic rules to avoid unnecessary accidents and deaths. With the growing interest in bike riding and road sharing, we hope to see more bike lanes and road sharing policies in the future to ensure the safety of people choosing alternative modes of transportation in the post-pandemic world.

Nurses’ professional and moral duty

Nurses have 5 fundamental responsibilities:
-to promote health
-to prevent illness
-to restore health
-to alleviate suffering
-to assist towards a peaceful death

Inherent in nursing is our duty to perform these responsibilities especially in the context of a pandemic. It is hard for many of us to turn our backs on our patients simply because we have pledged our whole lives in the service of the people.

However, times like this also beg the following questions:
Do nurses, and other health care workers, have a duty to care for patients when doing so exposes the nurses themselves to significant risks of harm and even death? More importantly, in the face of serious infectious disease, is there a duty to treat?

Our health system does not have the capacity to handle a pandemic. And this was made apparent in the previous weeks. Let me cite some experiences from the frontline (these ones I got from personal communications with nurses on the ground from various locations).
-Because of their duty to treat, some nurses were forced to perform CPR without adequate personal protective equipment or PPE on a patient with unknown COVID status.
-Some nurses left their sick family members because they were asked to report to duty.
-A nurse did not leave the patient room because her patient was unstable, unresponsive and drowning in his own urine and feces. Without any help, the nurse stayed with the patient and changed his diaper 3 times.
-Some nurses chose to stay inside patient rooms so they can properly monitor their patients because the hospital lacks proper surveillance equipment and has inadequate nursing staff. This despite hospital protocol saying that nurses should only stay in patient rooms for a maximum of two hours in an eight-hour shift.

These are some of many instances where nurses felt responsible to perform their duties despite knowing risks of harm and death. Truth be told, nurses will continue to perform their duties despite the risk of dying or acquiring the disease because many of us feel that it is our professional and moral duty to do so.

Recommendations to Address the Potential Local Nursing Shortage Amid the COVID-19 Pandemic

The role of nurses has been considered crucial in managing this pandemic, most especially in implementing strategies to #flattenthecurve. While this is the case, shortage in the nursing workforce will not make the management of the pandemic any easier. We recommend an integrated approach comprised of some or all the recommendations mentioned in this policy brief. However, these recommendations are interim solutions to a possibly chronic nursing workforce shortage in the Philippines. A national investment in the nursing profession is needed to address this shortage. Such investment will require significant political will, support, and financial investment.

Thank you Neil Roy Rosales for writing this with me. Please feel free to share with your colleagues.

Link to full policy brief: Recommendations

Foster collaborative relationships

Immediately after the news broke that three doctors died due to COVID-19, people took their frustration to Twitter and were quick to blame patients for their failure to divulge accurate health and travel history. For many, this alleged ’lie’ caused the life of an unsung hero who was at the frontline battling the pandemic.

A patient withholding facts and misleading health workers is no laughing matter. Physicians cannot appropriately diagnose and treat patients unless the latter share information freely. Thus, the feelings of anger, hatred, and frustration felt by many doctors last week were all valid. These feelings make them human after all. But, this is more than a simple case of dishonesty. To directly equate a person’s death to a lie, whether intentional or not, is a bit overstretched. Alternatively, our frustration directs us to question what could have possibly gone wrong between the patient-physician relationship.

Patients also fear for their lives, much like the rest of us in the field of health care. Some patients are intimidated, only to share their whole health history after their first conversation with a health worker.  Truth be told, it is sometimes difficult to share private information to our friends and families. What more to people you barely know? Unfortunately, this is not an excuse for patients to deliberately lie about their health status.

Although motivations for withholding the truth vary from patient to patient, options to address this problem are rooted in one concept: a collaborative patient-health worker relationship. It is important, I suppose, for our patients to feel that we trust them and that they, too, can trust us. Let us allow our patients to freely verbalize their thoughts and feelings. Let us take time to listen to them so that they can put their trust in us.

Conversations with patients are almost always difficult. But given the gravity of what’s at stake, we are encouraged to find ways to expand and make better the existing lines of communication. We are encouraged to find ways to make patients more comfortable to admit embarrassing behaviors, and facts about themselves. Finally, we are encouraged to create a trusting environment embedded in the system to allow and support collaborative relationships between patients and health workers.

The frontline

As a nurse, waking up each day is a struggle knowing that there is a high risk for us to acquire the disease. However, we are constantly reminded of our duty to the people. That it is our duty and responsibility to help those in need, especially the poor, weak, and vulnerable.

Times like this make us realize that effective communication is key. Sadly, the field of health has failed to do it well in many instances. Today, more than ever, I fervently ask our leaders to first show TRANSPARENCY. Make things clear for us. Make us understand how things will be managed, coordinated, and disseminated. Make us feel that you are on top of this and that processes are as clear as they can be.

Second, I ask for CONSISTENCY. We are tired of hearing conflicting statements, especially those from the higher ranks. Such conflicting statements create confusion which in turn causes panic. Let there be a single message from a single source.

Finally, I ask for INTEGRITY. Let us not fool each other. Again, kabaro mo na. Sana hindi ka na isahan pa. Tayo-tayo dapat ang nagtutulungan. Hindi dapat nag-gugulangan. Let us be honest to each other so we can all work well together. After all, we all aim for one goal – the end of this crisis.

The coming weeks will show how resilient and responsive our health care system is. The circumstances will test how our current systems will adapt and change according to the pressing needs of the people. Our experiences during this pandemic will surely change how we will implement the UHC law in a bigger scale in the following years.

Please pray for everyone, especially those in the frontline. It is a scary, scary world and we have nobody to save us but ourselves. Ingat!

DISCLAIMER: There is no way this post pertains to a particular individual, hospital, or organization. Before you try to twist whatever I said in this post and send complaints, please clarify them first with me. Send me a message. It’s free.

Nudging in health care

We saw a dramatic change in people’s behavior brought about by information (and misinformation) regarding the worldwide spread of COVID-19. People began clamoring for more health information and others started wearing surgical face masks to protect themselves. Following advice from the Department of Health, several organizations cancelled their scheduled conferences and conventions this year.

What surprised me, however, is the fact that many food, retail, and service companies started providing hand sanitizers not only to their employees but also to their customers. Schools, hospitals, and shopping malls did the same, and even placed posters at entry and exit points to inform the public on infection control measures that should be observed within their premises. The placement of posters, the availability of and accessibility to alcohol or hand sanitizers created a positive reinforcement that influenced individual and group decision-making leading to a change in behavior. In behavioral science, this is best explained by the “Nudge Theory”.

The reaction of the Filipino community to this actual health threat is a manifestation of how the theory works. Based on observation, some people who saw hand sanitizers and alcohols on counter tops actually rubbed some on their hands. To an extent, the mere presence of these alcohol-containing preparations ‘nudged’ people to make the right decision which is to practice hand hygiene. Studies in other countries such as the UK have been successful in providing empirical evidence to support the use of nudging to influence behavior in health care settings. Such practice, however, has not been extensively explored in the Philippines.

While we focus on containing the local transmission of COVID-19 in Metro Manila for now, health care professionals and policy makers can take this opportunity to review existing policies on hand hygiene, infection control, and even outbreaks. We have been accustomed to using the rational choice model to create policies influencing people’s behavior. Using this model, we assume that humans are rational beings and given adequate information, they will rationally act on their own self-interest. Sadly, this approach does not work well in real life. Fortunately, the nudge theory, introduced by Nobel-prize winner Richard Thaler and law professor Cass Sunstein, provides policy-makers with another approach to influencing behavior. This theory suggests that we cannot stop people from being irrational because much of instant decision-making is influenced by context and environment. We can, however, seek to influence decision-making impulses to produce outcomes that are beneficial both at the individual and societal levels.

At the moment, we are pleased and thankful for the initiatives of private companies to educate their employees and customers on proper hand hygiene, and providing the necessary facilities to practice hand hygiene procedures. In the future, we should hope to see how the government will use nudging techniques to influence people’s behavior. As the theory can be applied even in realms outside health, nudging presents a low-cost and effective policy option that can perhaps complement or replace traditional regulation with nudges to influence people’s everyday choices without restricting their freedom of choice, and imposing penal charges or taxation.