Global Cash Flows for Sustainable Development:A Case Study of Accountability and Health Systems Strengthening in Lesotho
Despite high health expenditures, Lesotho had some of the world's worst health indicators between 2000 and 2014. Official development assistance tripled from $37 to $107 million. PEPFAR funding rose from $3.8 to $32.4 million. Yet, deaths from TB, HIV, infant mortality, and maternal mortality remained unchanged. Lesotho had declining health outcomes amidst increased disease-focused financing and several large infrastructure projects. A World Bank loan financed the state-of-the-art Mamohato Hospital, and the U.S.-supported $362.5 million Millennium Challenge Corporation Project supported primary and secondary health infrastructure. This analysis uses the WHO Health Systems Framework to explore the unintended consequences of health financing on Lesotho's health outcomes. The WHO Health Systems Framework can be used to optimize health financing through investments in health service delivery, health workforce, health information, essential medicines, leadership, and equitable financial strategies. This approach can support governments to achieve universal health coverage and develop comprehensive health systems.
WHO Building Blocks, Sustainable Development Goals, Millennium Development Goals, official donor assistance, development aid, global health financing, Lesotho
Decades of financial policies promoted by the World Bank and International Monetary Fund, and codified through structural adjustment programs, had a devastating effect on health across sub-Saharan Africa.1 The new millennium, specifically the international movement for AIDS treatment access, ushered in billions of dollars [End Page 56] of new money for health.2 In addition, many African countries increased the share of their GDP allocated to health.3,4 While low and middle-income countries (LMICs) struggle with inadequate resources, countries now have a diverse portfolio of funding. This includes the state's own commitment to health, official development assistance from donor countries to the health budget of the recipient country (direct budgetary support), in-kind development assistance, philanthropic support for health, multilateral funding channeled through non-governmental organizations, and development loans such as from the World Bank Group.5
In many countries, these global cash flows improved the health of people living in LMICs. On the continent of Africa alone, increased foreign aid helped many countries improve health significantly and advance toward the Millennium Development Goals (MDGs).6 Strong governance and coordination of cash flows allowed countries such as Rwanda to cut maternal and child mortality drastically and reduce the spread of infectious disease.7 However, increased global cash flows in the MDG era did not guarantee strides in health. For some African nations, increases in external funding replaced public budget allocations.8,9,10,11 Additionally, funding was often highly fragmented—going to projects and NGOs instead of the basic building blocks of the health system.12
In an effort to help countries achieve MDGs, the WHO developed a Framework for Action that contained six building blocks defining the key components of health systems strengthening.13 These building blocks include service delivery; health workforce; information systems; medical products, vaccines, and technologies; financing; and leadership and governance. The framework was based on principles of health equity and universal coverage first highlighted during the Alma Ata Conference. The purpose of this framework was to help countries understand the pillars of a strong health system, define priorities, and understand gaps for future initiatives.13 In 2015, the global community established a new agenda through the Sustainable Development Goals (SDGs)—a set of 17 interconnected goals expanding on the progress and lessons of the MDGs.14 This agenda understands that the end of poverty and the security of lasting peace cannot be achieved without simultaneously tackling economic, social, and environmental challenges, including in health care.
Lesotho is a LMIC with a population of 2.14 million people; two-thirds of the population living in rural mountainous areas.15,16 At the turn of the MDG era, Lesotho's overall health was negatively affected by high levels of migration in the mining sector resulting in the spread of tuberculosis (TB) and HIV.17,18,19 Life expectancy stood at 47 years, and 56.6% of the population lived below the national poverty line.16 Investments in health were desperately needed. Over the following 15-year MDG period, the government increased its per capita spending on health and received unprecedented amounts of foreign aid.16 However, at the close of the MDG period, there was little impact on Lesotho's poor health outcomes.16
Over the MDG era, Lesotho was among only a handful of countries that experienced unchanging rates of maternal mortality, with 939 deaths per 100,000 births in 2000 to 1,024 deaths per 100,000 in 2014.14,20,15,21 Lesotho's infant and child mortality rates also lagged behind those of many of its African neighbors. In 2001, under-five mortality was 113 deaths per 1,000 live births; at the end of the MDG era in 2015, that number slightly decreased to 85 per 1,000.15,22 According to the World Bank, Lesotho had a [End Page 57]
higher infant mortality than other sub-Saharan African countries, despite having a relatively high gross national income per capita (Figure 1).22 Though the majority of African nations demonstrate a positive association between gross national income and improved health outcomes, this is not the case for Lesotho, particularly in relation to infant mortality.23,24,25
Compounding high maternal and child mortality rates over the last decade was Lesotho's crippling prevalence of HIV and TB. Lesotho's adult HIV prevalence remained stable from 23% at the start of the MDG era to 25% at its end.15 Despite increases in targeted funding, however, UNAIDS reports that HIV mortality in Lesotho remained largely unchanged, now surpassing over 9,900 deaths annually.26 Today, Lesotho has the second-highest per capita incidence of TB in the world at 788 per 100,000 individuals.27 Rates of TB mortality, which are highest in the world at 279 per 100,000, remained stagnant over the MDG era and were largely driven by mortality among those co-infected with TB and HIV (223 deaths per 100,000 population).27 These mortality figures are comparatively much higher than for the WHO African region (75 TB deaths and 30 TB-HIV deaths per 100,000 population, respectively).27
Using the WHO Health Systems Framework, this manuscript performs an in-depth analysis of Lesotho's experience during the MDG era to explain why health care financing does not always result in improved health equity. Global cash flows should be anchored in principles of the WHO's Framework that promote investment in health [End Page 58] systems strengthening, alignment with national strategies and policies, and evaluation using the Framework's core indicators28 to reflect improvements in health equity.
The Increase of Global Cash Flows for the Kingdom of Lesotho
During the MDG era, from 2000–2014, the Lesotho government increased its per capita spending on health from $38 to $108 (adjusted to 2014 dollars).16 As demonstrated in Table 1, the proportion of Lesotho's health budget from external funding increased between 2000–2014 period. However, Lesotho's per capita health expenditures from domestic sources also increased during this period.16,29 Most importantly, the proportion of Lesotho's domestic budget that went towards health expenditures changed from 7.7% to 11.7%.16 This high level of state health expenditure represented a clear sign of
[End Page 59] political commitment on the part of the government. In addition to public financing, official development assistance for Lesotho rose dramatically from $37 million in 2000 to $320.7 million in 2013.16
However, much of the financing in Lesotho was for vertical programs directed toward the greatest burden of disease such as HIV. While this is laudable, little money went to address the building blocks of the health system more broadly. The U.S. is one of the three largest donors to the Kingdom of Lesotho, with developmental assistance reaching $66.8 million in 2014.20 Nearly half of this was through the President's Emergency Plan for AIDS Relief (PEPFAR)—which grew from $9.6 million in 2007 to $32.4 million in 2014.30,31 Notably, however, U.S. support was primarily given to American non-government organizations rather than the government of Lesotho. Apart from this bilateral funding, Lesotho was also the recipient of $154 million from the Global Fund to Fight AIDS, Tuberculosis and Malaria between 2004 to 2014, some of which supported the public sector.32 With these resources and partnerships, Lesotho appeared primed to improve the country's population health. Yet, despite increased funding over the MDG era, those hopes remained unrealized. Over this period, Lesotho's health outcomes stagnated, and in several cases, worsened.
When Lesotho's poor health outcomes are analyzed through the lens of the WHO Health Systems Framework, three important themes emerge. First, that public debt incurred through a public-private partnership (PPP) for tertiary care crippled the government's health budget. Second, weak governance resulted in a lack of partner coordination resulting in fragmentation and resource inefficiency. Third, financing for vertical interventions failed to deliver disease-focused outcomes if the building blocks of the health system were weak or non-existant.28
Over the course of the Millennium Development Era (2000–2014), health financing in Lesotho came from a number of different sources, the most significant being: expenditures provided by the government ($909 million), official development assistance from wealthy countries ($344 million), foundation and in-kind assistance ($358 million), and loans ($646 million) (Table 2).16,33,34,35,36 While these figures reflect a strong commitment to Lesotho's health infrastructure over the early millennium, they do not highlight how that funding is allocated into programs.
Analyzing donor investments to Lesotho through the WHO Health Systems Framework13 highlights the fragmentation of these basic building blocks (Figure 2). While robust in quantity, the contributions from donors as depicted represent investments into fragmented pockets of Lesotho's health infrastructure divided from the overarching goal of a functioning health system. In the 2010–2011 Annual Report for Global Fund Support in Lesotho by the Ministry of Finance and Developmental Planning, the majority of Global Fund aid was directed toward vertical programs targeting HIV/AIDS and TB, with less than 50% going toward health systems strengthening.37 While PEPFAR prioritized HIV care and prevention, these programs set up a micro-network focused solely on HIV care. Though the World Bank funded diverse projects that included agriculture development and water improvement, these programs were not [End Page 60]
coordinated across the WHO's Frameworks building blocks to achieve efficient and lasting health change.
Other African countries that directed a greater proportion of external sources towards health systems strengthening rather than vertical programs saw greater strides in health outcomes. Since the mid-1990s, Rwanda's government directed external funding [End Page 61] towards diagonal interventions and health systems strengthening in accordance with the WHO Health Systems Framework.38 Today, Rwanda has doubled life expectancy and successfully achieved all of the MDGs.39,40 In 2004, Mozambique, had large inflows of disease-specific funding for HIV care. Though more individuals had access to HIV treatment, the country achieved greater gains against HIV only after the government started a diagonal-based approach that strengthened the primary health care system and integrated HIV care.41,42 Studies have demonstrated that purely vertical programs, such as those through PEPFAR, do not have spillover effects on the greater health system.43 These examples offer learning points for how external aid can be allocated to optimize health outcomes, namely by strengthening the overall health system with the WHO Building Blocks.
For Lesotho, misallocated funding disconnected from the WHO Health Systems framework likely contributed to backsliding and stagnating health indicators, despite the hundreds of millions of dollars invested over more than a decade. The following case studies present how specific investments have failed through the scope of this framework.
Case Study 1: Queen Mamohato Memorial Hospital and Resource Allocation
In 2007, the Government of Lesotho signed an 18-year $362 million contract with the African Development Bank to secure a loan to enter into a PPP with Tsepong, a consortium led by several locally owned businesses, and NetCare—a multinational, private investment holding company that manages hospitals.36,44 The loan was used to build a national hospital, a plan touted by the International Finance Corporation—the private sector investment arm of the World Bank Group—as a model public-private partnership (PPP) for the region.44,45 In October 2011, the Queen Mamohato Memorial Hospital in Lesotho opened in Maseru, replacing the capital's old main public hospital, Queen Elizabeth II. The rationale for the reboot was to improve quality of care and reduce government spending through fewer hospital referrals to South Africa. A recent study by McIntosh et al. compared outcomes between Queen Mamohato Hospital and its predecessor, and found that utilization, clinical quality, and patient outcomes were better in the newer hospital.46
However, the improvement of such outcomes did not occur nationwide. According to Oxfam, the tertiary facility and its associated clinics accounted for 51% of the Ministry of Health's 2014 budget, and was expected to undercut funding from other key national sectors, such as education and agriculture.44,47 The Hospital's growing costs diverted resources away from primary and secondary care. Meanwhile, the PPP was expected to reward its investors well, with a total projected cash income 7.6 times higher than the original investment, and a purported 25% rate of return on equity for shareholders.44 As a result, the hospital did not directly support the building blocks of the WHO Health Systems Framework. Specifically, it fell short of improving service delivery, medicines, and impact for the entire country. Its high resource requirement also led to indebtedness and underdevelopment of the greater Lesotho health care workforce.44
Though the WHO's Health Systems Framework encourages strong relationships [End Page 62]
. FRAGMENTED BUILDING BLOCKS AT QUEEN MAMOHATO HOSPITAL
|Service Delivery||Resources diverted from district health system, unable to meet 50% target budget for rural district centers|
|Health Workforce||Missed opportunity as training site for district Lesotho workforce, village health workers impacted|
|Health Information Systems||Decreased rural health services made it more difficult to collect health information for the majority of Lesotho's population|
|Access to Essential Medicine||Lack of resources for rural areas resulted in decreased supplies of available essential medicines for the population outside of the Mamohato catchment area|
|Financing||51% of MOH budget went to single, tertiary care hospital|
|Leadership/Governance||PPP gave shared leadership with outside private donors, and may impact development of local health champions|
between the public and private sector, the diversion of Lesotho's health budget towards a single institution represented a lapse in the financing building block of the health system. The WHO building block priorities for financing and leadership help define how this error in resource allocation could have been avoided. According to the Framework, financing initiatives through a mixture of public and private funding must include accountability mechanisms to ensure that resources are effectively and transparently used. However, the hospital's limited reach in Maseru and high operating costs crippled the development of other fundamental building blocks of a health care system, including service delivery and a viable health workforce.13 Lesotho's Health Sector Strategic Plan reported that in the 2007–2008 fiscal year, only 24% of the Health Sector Budget was allocated to primary health care at district health services.48 In line with leadership/governance building block priorities of setting health sector policies and goals, it aimed to dedicate 40% of the Ministry of Health's budget towards district health services in 2017, and then 50% of its health spending to district health services by 2020.48 Yet, this goal remained difficult given that the Queen Mamohato Hospital already exceeded its inpatient and outpatient capacity by 7,000 and 40,000 patients, respectively, in 2015 alone. At the pace of spending appropriated toward paying off the hospital's debt—costing 51% of the national health expenditure in 2014—and the high burden of patients outstripping the hospital's capacity, the amount directed toward district health services remained at high risk of falling behind its targets.49
Another priority of the WHO's Health Systems Framework is that financing strategies [End Page 63]
should be equitable and address fragmentation of financing arrangements.13 However, the construction and maintenance of Queen Mamohato Hospital exacerbated financial fragmentation by concentrating limited funding to a single institution. With more than two-thirds of Lesotho's population living in the rural highlands,16 the majority of Lesotho's populations may never benefit from the medical care of Queen Mamohato Hospital. With such a large proportion of national health funding funneled toward the PPP facility, much less remained for the District Health Management Teams, where the bulk of care delivery and personnel—including Village Health Workers—are managed. Indeed, in the three years between 2014 and 2017, budget cuts for health personnel and vaccines were planned, while the Ministry of Health's contributions to Queen Mamohato Hospital were expected to climb by 116% over the same period.44 The consequences of this are a major concern: because resources were diverted from clinics delivering the majority of care to the majority of Lesotho's population, district health facilities were rendered ill–equipped (Figure 3).
Without implementing financial strategies that strengthened the overall health system, the WHO's building blocks could never be achieved. The service delivery and health workforce depend on scaling up health interventions where demand exists. However, with resources serving only a fraction of the population, this case highlights how improperly allocated health financing put the poor and vulnerable at risk.
Other studies investigating the role of PPPs in global health share similar lessons that align with the WHO building blocks. Future public-private partnerships (PPPs) should help develop and ensure proper governance capacity to manage and pay for [End Page 64] contracted services.50,51 PPPs should have shared priorities, strengthen the local and national health systems, and ensure that accountability mechanisms are in place that include health outcomes indicators.52,53.54 As Lesotho and other LMICs transition from the MDG to SDG era, innovative financing mechanisms such as PPPs should use the WHO's Health Systems Framework building blocks to ensure that global cash flows are carefully allocated, directed, and coordinated towards universal health coverage.
Case Study 2: The Millennium Challenge Corporation and Accountability
Perhaps one of the best examples of how a significant investment in a health system can fall short of expectations is the five-year, $362.5 million contract that the Millennium Challenge Corporation (MCC) and the government of Lesotho signed in July 2007.36 Designed to increase economic growth and reduce poverty, roughly a third of the commitment (33%), or $122 million, was dedicated to MCC's Health Sector Project, which largely focused on the renovation and provision of 138 health centers and 14 outpatient departments across the country.36,55 The MCC Health Sector project sought to make strides in child mortality, maternal health, and infectious disease, and adopted outcome indicators that paralleled the 4th, 5th, and 6th Millennium Development Goals. However, the intervention fell short of addressing the WHO's building blocks of service delivery, health workforce, information systems, and financing (
In January 2011, USAID compiled an audit of the MCC's Health Sector Project in Lesotho.56 The report found several major issues during the first four years of the project. First, the MCC "did not accurately identify required funding for the health center renovations during due diligence."56[p.3] Two years after the start of the project, the Millennium Challenge Account (MCA), the account through which MCC activities
. FRAGMENTED BUILDING BLOCKS DURING THE MILLENNIUM CHALLENGE CORPORATION'S HEALTH SECTOR PROJECT
|Service Delivery||Lack of health systems infrastructure and logistics to maintain clinic equipment and supplies|
|Health Workforce||Lack of human resources and clinics for the maternal waiting houses|
|Health Information Systems||Inaccurate survey systems in place to evaluate project impact|
|Access to Essential Medicine||Majority of MCC clinics were out of stock of essential medicines|
|Financing||Lack of financing for basic clinic needs: electricity, water, and sanitation|
|Leadership/Governance||Lack of shared accountability between the Millennium Challenge Corporation and the Lesotho government|
[End Page 65]
were conducted, determined that the health center's renovation project would need roughly 50 to 60 million more dollars for completion. Second, MCC and MCA had not been able to directly oversee the renovations of all the health centers, in part because they did not fully consider the capacity of the MCC-Lesotho and MCA-Lesotho officials. Per the WHO's building block of leadership and governance, collaboration with local officials to develop policy guidance, oversight, and accountability were desperately needed. Third, the audit found that MCC indicators overstated the direct results of the project and the number of project beneficiaries.56 This might have been addressed through better information collection and greater transparency as outlined in the WHO's information and financing building blocks.
Years later, after project completion, the MCC reported that although 88% of centers had been constructed, only 33% of target health centers were equipped to provide standard health care.36,55 The MCC reported that 99% of outpatient departments were completed, yet at the end of the contract period, more HIV individuals died after initiating treatment and the TB case notification rate remained unchanged.36 The report also suggested that all renovations would be finished by February 2014 and all equipment would be delivered from February through April 2014. Yet, the MCA-Lesotho office, opened to oversee implementation of the compact, officially closed down on January 14, 2014.
Despite partial successes reported in the MCC audit, Partners In Health (PIH) in collaboration with Lesotho's Ministry of Health found that many of the MCC clinics were non-functioning. The survey randomly selected 53 clinics across four districts (~20% of the remodeled MCC clinics) between March and June 2014, and found that the MCC clinics had inadequate waiting areas, ventilation, electricity, water sources, and sanitation (Table 3).57
In fact, many of the clinics were not in use due to a lack of equipment and supplies. Without an autoclave, delivery beds, or even supplies as simple as sheets and curtains, clinics were not equipped to deliver babies. Clinics also sought to overcome geographic barriers to on-site delivery by creating a temporary living space for pregnant mothers called maternal waiting houses; however, clinics did not have the proper health infrastructure or food to succeed (Table 1).57,58 In this case, many components of the service delivery building block were missing, including proper management, the guaranteed delivery of an integrated service package, and adequate infrastructure and logistics.
Of the 53 clinics assessed, 49 had been rebuilt and officially signed off as functional to the Ministry of Health.57 However, in our experience, the MCC clinics were underequipped, and lacked the district funding, medications, and health systems to work. In this case, financing alone without incorporating the WHO's Health Systems Framework led to unfortunate results (Figure 4). Future efforts must emphasize the WHO's building blocks to contain strict accountability measures, promote sustainable development, and avoid the same fate that befell the MCC's Health Sector Project.
In comparison, PIH engaged in a five-year project with the Rwandan Ministry of Health aimed at strengthening health systems within a region of southeastern Rwanda.38 Guided by the building blocks of the WHO's Health Systems Framework, this effort prioritized renovation of health facilities, health workforce investments, information [End Page 66]
[End Page 67] systems development, and financial support for patients, among other objectives. The implementers assessed their results after the five-year period through indicators reflecting the direst health care needs within this region, including vaccination rates, vitamin supplementation rates, contraceptive use, and treatment rates for certain conditions such as diarrheal diseases and respiratory infections. The overall trends of these indicators from 2005 to 2010 showed remarked improvement with realized health care impact.
In Lesotho, though the MCC appears to have built a number of clinics sharing a trajectory with its goals, a closer look reveals that many of these sites lacked the resources for basic health management. Incorporating indicators from the WHO's Framework,13 as well as tailoring indicators at a more granular level as suggested by PIH's analysis of MCC clinics in Lesotho and Rwanda,57,58,38 may provide more accurate data on the functioning of these large-scale health investments. By focusing health sector policies and utilizing the WHO Health Systems Framework's core indictors,28 project evaluation will be oriented towards its direct impact on Lesotho's stagnating health outcomes. Though setting more relevant health indicators alone will not guarantee their achievement, rooting them more tightly to contextual realities will better track tangible health progress and the broader goal of reaching health equity.
Using the WHO's Health Systems Framework for Action to Turn Toward the Sustainable Development Goals
Though global capital flowed into the Kingdom of Lesotho during the MDG era, well-intended financing strategies fell short of promoting development and health outcomes. Exciting and innovative partnerships pledged millions of dollars into the country's health system, but Lesotho witnessed stagnant maternal and HIV mortality, and the world's second-greatest per capita TB burden. How could so much funding reach this point? Analyzing the distribution of these expenditures revealed priority allocations that were not aligned with the WHO's building blocks as outlined in their Health Systems Framework. Investments toward single institutions came at the expense of district-level health clinics. Indicators used by these programs lacked a rigorous focus on measuring achievement of health equity within Lesotho, resulting in a decade of investment without progress. Core indicators exist for the WHO's Framework for Action, and can serve as a starting point for developing health systems that prioritize health equity.28
The framing and language of the WHO's Health Systems Framework13 provide a path forward for aligning health systems financing with the Sustainable Development Goals (SDGs). The building blocks of the WHO's Framework focus on developing the overall health system rather than developing individual health services, which is a core theme of SDG 3: Ensure healthy lives and promote well-being for all at all ages.14 As demonstrated by many countries,7 health systems-strengthening with overlapping targets can invariably promote health outcomes, particularly in the case of Lesotho. Additionally, it is important that countries strengthen and track local budgetary allocations for health as a long-term measure for achieving sustainable health systems.
In line with SDG 17 (strengthen the means of implementation and revitalize the [End Page 68] global partners for sustainable development), the WHO's financing building block highlights how official development assistance and other global cash flows should be aligned with national plans to bridge development gaps.14 The Framework encourages regional and national development planning, recognizing that sustainable cities are not built at the exclusion of the countryside. The leadership and governance building block also underscores that development partnerships must prioritize national capacity-building and systematic measurement of outcomes. These themes are echoed in the Addis Ababa Action Agenda for financing the SDGs, and provide a concrete path forward for structuring multi-stakeholder strategic plans.59
Ultimately, investing in health systems-strengthening is not enough without guiding principles to appropriately direct those investments. As Lesotho and its partners push for reforms geared toward stronger health systems, the WHO's Health Systems Framework can continue to offer guidance. Partnerships should address national priorities focused on strengthening health infrastructure. Funding must be aligned with projects and outcomes that have tangible, sustained impact on the communities they serve. Not insignificantly, programs should measure their progress with indicators grounded in functional change. The international community recognizes the evolving scope of governance for health, and how a just and functional health system requires collaboration and accountability of a multitude of actors, including national structures, supranational bodies, businesses and other societal partners, even engaged citizens.60 In this sense, the failure to improve Lesotho's health outcomes despite the investments made during the MDG era was a collective one. In the SDG era, future investments in Lesotho's health care and the health care of other LMICs must prioritize cohesive coordination among the various resources, stakeholders, and projects to achieve a more equitable health system that serves all.
Compliance with Ethical Standards
This study did not receive any outside funding.
Ethical approval: This article does not contain any studies with human participants or animals performed by any of the authors.
JOIA MUKHERJEE, PAUL E. FARMER, and HIND SATTI are all affiliated with the Division of Global Health Equity/Partners in Health, Brigham and Women's Hospital, Boston, MA. MICHAEL M. LINDEBORG and CAROLE MITNICK are both affiliated with the Department of Global Health and Social Medicine, Harvard Medical School, and Division of Global Health Equity, Brigham and Women's Hospital, Boston, MA along with Drs. Mukherjee and Farmer. SANDHIRA WIJAYARATNE is affiliated with the Harvard Medical School, Boston, MA, as well as Drs. Mitnick and Farmer.