Diversification of financing blog series
PART ONE: The Future of Financing for Reproductive Health Supplies
by Sarah Webb, Senior Technical Officer, RHSC
Throughout RHSC’s General Membership Meeting in Accra, we heard many stories of resilience — stories of how individuals, organizations, and systems adapted during the COVID-19 pandemic and how they continue to adapt in the face of changing political landscapes, climate change, and humanitarian crises. We heard stories of creativity — about how we came together as a community to innovate and create new ways of working to ensure continued access to quality reproductive health supplies.
Critical to each of these stories of resilience was a common ingredient: financing. To ensure sustained access to quality reproductive health supplies — to create a resilient reproductive health supplies community — we need adequate, reliable access to financing. Against the backdrop of the COVID-19 pandemic, strained health systems, and changing priorities from donors, governments, and private sector partners, sustainable access to financial resources will require diversification of financing.
The future of financing for reproductive health supplies will necessitate partnership, collaboration, and thoughtful consideration of how best to leverage the many different funders, financing mechanisms, and strategies for maximizing efficiencies across the supply chain. And while there are many financing mechanisms at our disposal, effectively bringing them together to create sustainable, reliable financing for RH supplies is complicated.
Maintaining balance on the way to the end goal
The diversification of financing for reproductive health supplies isn’t as simple as just increasing funding from multiple sources. It requires a delicate balance of engaging multiple funders, and it will necessitate resolving some of the tensions that underpin a multi-funder approach to financing reproductive health supplies. It will also require a constant focus on the end goal: that we develop diversified, sustainable sources of funding for reproductive health supplies, without compromising quality, accessibility, equity, and affordability for the end user.
For example, how can country governments mobilize domestic resources — typically via taxes or insurance premiums — while ensuring that end users can still afford quality contraceptive commodities or maternal health supplies? And how can they ensure that access is not only affordable, but also equitable? Similarly, how can we leverage subsidized commodities (whether subsidies originate from donor organizations or governments) to expand access to quality reproductive health supplies without contributing to market failures that limit, or even prohibit, private sector partnership? What might it look like to continue to scale-up global level coordination of reproductive health supplies as a means of maximizing efficiencies, without compromising investment in national-level capacity for procurement and supplies management?
Within each of these tensions, there is no clear answer. The question isn’t whether or not we should focus on out-of-pocket payments versus focusing on scaling up subsidies for supplies. The reality is much more nuanced. An effective approach to financing for RH supplies considers how we balance each of these approaches. How might we weave together a collaborative strategy that both diversifies financing and achieves affordable, equitable access? One thing is clear: financing from multiple sources through a coordinated, adaptable model will be necessary to ensure adequate funding for RH supplies.
Learning from our community
Liberia and Ethiopia both provide strong examples. While the two governments have taken different approaches to domestic resource mobilization, both country contexts highlight the importance of simultaneously raising domestic revenue, leveraging global financing mechanisms, and utilizing donor funds, loans, or co-financing models to close funding gaps. In both countries, the long-term vision emphasizes increasingly greater shares of RH supplies financing coming from domestic revenue — yet, mid-to short-term financing models leverage diversified funding mechanisms to ensure that RH commodities are well-resourced to meet the needs of the population.
Insights from UNFPA and the World Bank paint a similar picture. While significant investment has been placed in global-level financing and coordination mechanisms, this investment does not have to be placed at odds with developing national-level capacity. In fact, both play necessary roles in ensuring an adaptable, resilient funding approach to RH supplies. Global-level coordination can contribute to an enabling environment for co-financing, enabling countries to leverage domestic resources while also closing funding gaps through external resources — like we see in the examples from both Liberia and Ethiopia. The need for both global and country-level investment and coordination becomes particularly pertinent in the wake of the pandemic, where countries are facing heightened debt burdens and financial constraints.
The private sector also provides a promising opportunity for ensuring access to quality RH supplies. In many geographies, the private sector plays a critical role in creating access to quality RH supplies for end-users, particularly with regard to menstrual health products, safe abortion supplies, and short-acting contraceptive methods. While there are challenges to balancing a total market approach with a funding model that includes heavy investment in subsidized product, engaging the private sector as a partner in financing discussions can not only optimize the role that the private sector is able to play, but also, glean important lessons learned for supply chain efficiency that can be applied to the public sector as well.
While there may not be a ‘one size fits all’ approach to resolving the tensions that underpin the diversification of financing for RH supplies, there is certainly a promising path forward. While financing was one common ingredient in the inspiring stories of resilience of the reproductive health community, it wasn’t the only one. Each story of resilience also referenced another key ingredient: partnership. As we navigate a path ahead in ensuring that RH supplies have reliable, sustainable financing mechanisms, we know that we are not alone: we have the collective expertise of our partners around the world. Together, we will sustain the drumbeat that began in Accra.
