Innovative financing for health: what is truly innovative?

SummaryDevelopment assistance for health has increased every year between 2000 and 2010, particularly for HIV/AIDS, tuberculosis, and malaria, to reach US$26·66 billion in 2010. The continued global economic crisis means that increased external financing from traditional donors is unlikely in the near term. Hence, new funding has to be sought from innovative financing sources to sustain the gains made in global health, to achieve the health Millennium Development Goals, and to address the emerging burden from non-communicable diseases. We use the value chain approach to conceptualise innovative financing. With this framework, we identify three integrated innovative financing mechanisms—GAVI, Global Fund, and UNITAID—that have reached a global scale. These three financing mechanisms have innovated along each step of the innovative finance value chain—namely resource mobilisation, pooling, channelling, resource allocation, and implementation—and integrated these steps to channel large amounts of funding rapidly to low-income and middle-income countries to address HIV/AIDS, malaria, tuberculosis, and vaccine-preventable diseases. However, resources mobilised from international innovative financing sources are relatively modest compared with donor assistance from traditional sources. Instead, the real innovation has been establishment of new organisational forms as integrated financing mechanisms that link elements of the financing value chain to more effectively and efficiently mobilise, pool, allocate, and channel financial resources to low-income and middle-income countries and to create incentives to improve implementation and performance of national programmes. These mechanisms provide platforms for health funding in the future, especially as efforts to grow innovative financing have faltered. The lessons learnt from these mechanisms can be used to develop and expand innovative financing from international sources to address health needs in low-income and middle-income countries.