Fresh Money for Health? The (False?) Promise of “Innovative Financing” for Health in Malawi

Abstract

Since 2013, the government of Malawi has been pursuing a number of health reforms, which include plans to increase domestic financing for health through "innovative financing." As part of these reforms, Malawi has sought to raise additional tax revenue through existing and new sources with a view to earmarking the revenue generated to the health sector. In this article, a systematic approach to assessing feasibility and quantifying the amount of revenue that could be generated from potential sources is devised and applied. Specifically, the study applies the Delphi forecasting method to generate a qualitative assessment of the potential for raising additional tax revenues from existing and new sources, and the gross domestic product (GDP)-based effective tax rate forecasting method to quantify the amount of tax revenue that would be generated. The results show that an annual average of 0.30 USD, 0.46 USD, and 0.63 USD per capita could be generated from taxes on fuel and motor vehicle insurance over the period 2016/2017-2021/2022 under the low, medium, and high scenarios, respectively. However, the proposed tax reform has not been officially adopted despite wide consultations and generation of empirical evidence on the revenue potential. The study concludes is that revenue generation potential of innovative financing for health mechanisms in Malawi is limited, and calls for efforts to expand fiscal space for health to focus on efficiency-enhancing measures, including strengthening of governance and public financial management.

Examining the incidence of catastrophic health expenditures and its determinants using multilevel logistic regression in Malawi

“…A minimum package of health services is provided for free in all public health facilities through the essential health package (EHP). This acts as a priority setting tool and includes key public health priority areas and cost effective intervention to address the major causes of mortality and morbidity [10]. Total health expenditure in Malawi increased by 14.7% from MWK429.1 billion to MWK502.8 billion over the period 2015-2018 and the average total per capita expenditure over the period was US $39.8 slightly higher than US$ 39.2 reported over the 2012-2015 period.…”

Challenges to effective governance in a low income healthcare system: a qualitative study of stakeholder perceptions in Malawi

“…Malawi is one of the poorest countries in the world (30). It has low per capita spending on health of 39.2 USD, which is significantly lower than the Sub-Saharan Africa average of 98 USD (31). The Government of the Republic of Malawi has signed up to the Abuja Declaration to commit at least 15% of the national budget to health (32), but only allocated 9.8% in 2018.…”

Challenges to effective governance in a low income healthcare system: a qualitative study of stakeholder perceptions in Malawi

“…Malawi is one of the poorest countries in the world [ 22 ]. It has low per capita spending on health of 39.2 USD, which is significantly lower than the Sub-Saharan Africa average of 98 USD [ 23 ]. The Government of the Republic of Malawi has signed the Abuja Declaration to commit at least 15% of the national budget to health [ 24 ], but only allocated 9.8% in 2018.…”