presentation: health financing innovation

8/18/2019 PRESENTATION: Health Financing Innovation

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Health Financing InnovationThe case for Epidemic Financing

Saumya Kailasapathy - SDAS

Disclaimer: The views expressed in this paper/presentation are the views of the author and do not necessarily reflect the views orpolicies of the Asian Development Bank (ADB), or its Board of Governors, or the governments they represent. ADB does notguarantee the accuracy of the data included in this paper and accepts no responsibility for any consequence of their use.Terminology used may not necessarily be consistent with ADB official terms.


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Outline

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1. The Health Financing Landscape

Innovative Finance & the “right tool”

3. Health Security as a key public health issue

4. The region’s burgeoning Epidemic costs

5. The ADB Epidemic Financing Proposal

2.


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Health financing is evolving: new financingsolutions are now needed for public health

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The Challenges Solutions

Donor funding halting

DFAT, UK, & US ring-fences international aid

Global Fund Round 11 cancelled

GAVI exiting

Increasing cost of NCD’s Domestic health budgets insufficient

Recurring cost of Epidemics

Long term financing

Target large scale

projects to transform

infrastructure and

systems

Target underfunded

public health concerns


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Outline

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2.


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Several innovative finance mechanismsexist, but we should target the “right”instruments for public health

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• TargetUnderfunding

– Epidemics… – Health Systems…

• Target Scale &Sustainability

– Low incentives tofocus on RPGs

– System

transformation

• Target Long TermFinancing

– Sustainability – Bridge financing

Taxes and Levies Philippines “sin tax”$2.3bn:subsidization ofhealth insurance.

UNITAID’s airlinelevies raised anaverage ofUS$208m per yearfrom 2007 -2011

Blended Loans

• Incentivizeborrowing viagrants

Bonds

• Social ImpactBonds – mobilizefunding fromprivate sectors

Private sector

• Public privatecollaboration

Public Sector

• Increasepublichealth

spending• Eg HI

The region needs the right instruments


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Outline

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2.


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Health security is a key public health concern:Asia Pacific is an epicenter for health securityrisk, and breeding ground for zoonotic outbreaks

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Epicenter forantimicrobial

resistance

Remergingdiseases like TB

Unplanned Urbanization

Mobile population

Natural disastersUnregulatedprivate sector

Weakhealth

systems

Climate change

Human-AnimalInterface

Mosqu itos

Low qualitydrugs andvaccines


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Outline

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2.


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The economic cost of epidemics in AsiaPacific is enormous, and growing.

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Dengue

Ebola MERS

Zika Corona

Malaria

Tuberculosis


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Outline

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2.


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Why should ADB be involved in Epidemicfinancing?

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ADF IX2% for healthand eligibility

for all ADFDMCs

HIV/AIDS &Communi-

cableDiseases

SARS

GMS CommunicableDiseases Project

Avian Influenza Project

Malaria andother Communicable

Diseases ThreatsTrust Fund

ADB has experience in Health Security & Regional Cooperation

RCI


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Epidemic Financing Structure: structuringhealth financing for targeted impact

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Up to 2015 2016

Loans – demand driven

Epidemic Financing: support thedesign and implementation ofGovernment programs

Fragmented approachesto health financing

TrustFunds

ADF 9 TA –

wide scope

ADF GrantFinancing

HealthBond > OCR

TechnicalAssistance

Strategic health financing structure


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Epidemic Financing Structure: Use of Funds

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Product

EpidemicEmergency:Emergencyresponse financing

EpidemicPreparedness: TA

EpidemicPreparedness: Loan

RegionalPreparedness: TA

Use of Funds

TA or ADF Grant• Fund national epidemic preparedness• Support cross border initiatives

Health Bond• Earmark ADB OCR• Signal to the market that ADB is

“stepping up” epidemic risk mitigation • Earmark OCR for loans

Response Financing• Include Epidemic and Health

Emergencies within ADB’s Disaster RiskManagement Fund and Framework


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Epidemic Financing Structure: Why Bonds?

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The ADB Health Bond

Investors

Capital raised &earmarked

- Loan- Guarantee- Project/SIB Bonds

Thematic Bond Considerations • Investor appetite

• Building pipeline –

supporting resident

missions and regional

department

• Structure similar to ADB

Green or H20 Bonds


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Epidemic Financing Structure: role of PrivateSector and opportunities for collaboration

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•

Epidemics threatenmajor investments inmultinationals and smallbusinesses

• Business opportunity

• Protect corporatebusiness continuity &disaster risk

• Leverage CSR

•

E.g. Private health providersin rural areas, better crossborder access

• E.g. Mobile phone providerrapidly deploying

emergency financing• E.g. leveraging private

sector supply chains,logistics and datamanagement

Incentives Collaboration• Profitability• Business continuity

uncertain

• Profitabilityprotected

• Gov’trelations


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Thank you

…..

Q&A

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presentation: health financing innovation

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