THE IMPORTANCE OF PLANNING FOR FINANCIAL SUSTAINABILITY

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1 KEY NOTE ADDRESS BY THE MANAGING DIRECTOR, FIDELITY BANK PLC, MR NNAMDI OKONKWO; AT THE 3 RD ANGLOPHONE AFRICA PEER EXCHANGE WORKSHOP ON SUSTAINABLE IMMUNIZATION FINANCING. ABUJA 20 TH APRIL, PROTOCOL. May I begin by expressing my profound gratitude to the chairman, National Immunization Financing Task team (NIFT); Dr. Ben Anyene for giving me the singular honor of delivering the keynote address at this very auspicious occasion of the 3 RD Anglophone African Peer Exchange Workshop on Sustainable Immunization Financing. THE IMPORTANCE OF PLANNING FOR FINANCIAL SUSTAINABILITY Immunization programs can improve the health of the children only when the programs have adequate and reliable funding, combined with the efficient procurement and use of resources. Secure financing for the long term helps to make possible continuity in services and continuous increases in coverage, quality and access to both traditional EPI and newer vaccines. Thus, understanding a programs current financial status and future needs, and identifying and implementing a financing strategy that allows the program to achieve its goals, are fundamental tasks in the planning and management of all immunization (and other health) programs. In general, there are four basic aspects of financial resources to consider: How much does it cost to achieve program aims? How much funding is available now and in the future relative to what is required for program expansion and improvement (the gap )? How do the funds flow from the source to the eventual use? How are the funds used? All of these aspects influence the extent to which a program can achieve its objectives, and can contribute to the overall aims of the health sector. For example: If the program seeks to maintain coverage, additional resources will likely be needed in the future simply to keep up with the population growth.

2 If the program wishes to expand coverage, the financial arrangements may need to ensure that sufficient funds are allocated for personnel and other recurrent costs associated with new outreach strategies And that the funds are disbursed on time, and are used effectively. If the program has identified better vaccine management in peripheral zones as a key challenge, the financing targets must focus on obtaining funds for capital investments to revitalize the cold chain and ensuring that the individuals responsible for maintenance of the cold chain have (and use) the funds they need, when they need them, to make repairs. If the program has relatively high levels of coverage of the basic vaccines and is striving to introduce new antigens, the main emphasis of the financing strategy might be to obtain and sustain much higher levels of funding for vaccine procurement, as well as for the additional staff training, transport and cold chain space required and to make sure that there is timely access to foreign exchange, if needed. While broad health, as well as program-specific objectives are the starting point for determining how much is needed to finance a program and how that financing should be organized, sometimes program objectives themselves must be modified in the face of financial realities. For example, if immunization is deemed to be a lower priority than other uses of government funds, and/or a major donor terminates or greatly reduces support and no alternative arrangements can be made, program managers may have no choice but to slow down planned expansions. In this way, setting program objectives and determining the right financing strategy both are parts of the same ongoing process of program planning. It is important to note that planning for financial sustainability takes into consideration many levels of decision making, and specifically requires attention to the district level. Increasingly, immunization programs are seeking to address the needs across all geographic areas-and particularly in low-performing districts- by establishing districts-level targets, strategies, and budgets (often in the form of micro plans ). In addition, in many countries there is a trend toward decentralization, and expanded decision and budgetary responsibilities at subnational levels. Thus, good program management and planning, and therefore financing, takes into account the planning at multiple levels within a country (district, province, national), to ensure that funding is both adequate and reliable at the level at which it will be used.

3 BUILDING ON THE VACCINE FUND FOR LONG-TERM SUCCESS How much will be needed to support the expansion of immunization coverage and improvement of the quality of the vaccines and the immunization services? How will the immunization program be financed in the future? How should the funds flow to ensure that they will be available when they are needed? How can they be used effectively to meet program objectives? And what is the size and nature of the gap in financing immunization services now and in the future. the long-term success of the immunization depends on answering these questions, and then identifying and taking actions to improve a programs financial prospects based on those answers. The immunization program will reach (or come close to) its program objectives-attaining continuous improvements in coverage and quality- only if the resources can be counted on to support those efforts. While all Ministries of Health and immunization program managers should be considering how the program financing can be sustained over the long term, such planning is particularly important for recipients of vaccine Fund resources because of the way the fund works. The Vaccine Fund is designed to be a catalyst to increase the financial resources for national immunization programs in a step-wise fashion. The Vaccine Fund provides an initial allocation of resources to support the strengthening of immunization systems (leading to increased coverage quality) and/or to introduce newer vaccines, some of which are common in industrialized countries but not yet in widespread use in the developing world. Once that initial allocation is disbursed (over a five-to tenyear period), it is currently expected that no additional funds would be made available for the specific activities covered under the initial allocation. It is expected that in each country domestic and supplementary external resources will be mobilized to take up where the vaccine fund leaves off. A core challenge of planning for the programs future, then, is determining the actions needed to maintain the current level and mobilize those new resources. The Vaccine Fund intends to become a long-term mechanism in the global immunization effort. As the Vaccine Fund phases out of providing the initial types of support, its focus will evolve to support the introduction of vaccines now in the late stages of product development in the countries where such introduction is justified epidemiologically and is backed by effective and efficient management capacity. For example, the Vaccine Fund may provide some countries with resources to introduce anticipated new vaccines, such as those

4 against rotavirus, pneumococcus or meningococcal A. again, subject to fulfillment of the requirements of the program, that support (which may also potentially be dedicated to new means to improve program performance) will be for a specific period-five to ten years- with the expectation that other sources of funding will fill in at the end of Vaccine Fund support. After that second round, the Vaccine Fund would again support the introduction of vaccines that are now in the early stages of development, but show great promises for the future. These potentially include vaccines against malaria, tuberculosis, HIV/AIDS. Although these vaccines are likely to be quite costly at the start, their potential for reducing the burden of disease and associated treatment costs could make them sound investments for many countries. As currently envisioned, the Vaccine Fund would (subject to the fulfillment of the requirements of the program), once again provide resources for a five-to ten-year period, and then phase out as domestic and external resources fill the gap. In this way, the Vaccine Fund will benefit immunization programs- and many generations of children only if financing of immunization services changes significantly: New resources will need to be mobilized and phased-in, and both existing and new sources of funding will have to respond to program needs. PATHWAYS TO A MORE STABLE EQUILIBRIUM However, changes around the world are moving donors and governments incentives into alignment. For example, mortality and fertility continue to decline as more people gain access to, and make increasing use of, effective health services families are producing fewer and healthier children. More people are living longer, more productive lives. Like primary education, immunization programs make a sustainable contribution to this added productivity. In the political sphere, free and open elections have become routine in a growing number of countries. For the first time, newly elected parliaments are beginning to exercise effective oversight on government programs and to represent heretofore forgotten areas and groups. These changes lead to increased pressure on governments to find sustainable financing for the health sector. Around the world, people s expectations of health care are rising, and rising and governments gain politically by investing

5 more in health. This includes taking responsibility for programs initially led by external partners and increasingly engaging citizens in the expansion of health systems. BUDGET REFORMS In the area of public finance, transparency and accountability become more important as government expenditures increase and people become more dependent on public services. As noted above, dependency on external partners tends to distort the budgeting process. Rather than build the capacity needed to provide services. Governments take the part of least resistance by allowing managers of immunization and other programs to bypass existing government channels and get funds from external partners. In the health sector, a logical place to start budget reforms is in a country s immunization program. Of all health programs, immunization has the richest stream of real-time data, which makes its budget the easiest to monitor. The periodic Sabin briefings give members of parliament opportunities to scrutinize the performance of the immunization budget. If they find that planned activities were not carried out because of insufficient funding or interruptions in support from external partners, they use these facts to argue for increases in the government s routine immunization budget. The legislators are often impressed to learn that health districts report numbers of children immunized and cases of disease seen or investigated monthly, if not weekly. Combining these data with information on expenditures- such as the cost of fully immunizing a child- makes it possible for elected officials and other decision makers assess how well the program is using its resources (its absorptive capacity), whether it is reaching all areas (its allocative efficiency), and whether it is achieving its goals (its value for money\0. Budget reforms for immunization programs could serve as models for reforming other programs, such as maternal care and malaria control. An early step in budget reform must be to build a country s own capacity to provide services such as immunization. This involves establishing new business practices- for example, quarterly cash accounting and reporting- not only between government and donors but also across ministries, between ministries and parliament, and between elected officials and their constituents. New approaches include budgeting based on performance and output. In the latter, proposed outputs and expenditures are compared to actual outputs and

6 expenditures in each quarter. Program and budget performance are evaluated together in relation to previously set objectives, and the next quarterly budget disbursement is adjusted accordingly. Uganda began implementing an output-based budgeting system in District governments report expenditures and program outputs quarterly to the ministry of Finance, Planning, and Economic Development. The ministry submits its analysis and recommendations to parliaments Public Accounts Committee twice a year. Initial results show improved absorptive capacity in health and other sectors. The amount of funds unused at the end of the year has decreased considerably. Yet this regular exchange of programmatic and financial data is a rarity. In 2010 the Sabin program sponsored peer exchanges that allowed finance officials from Liberia and Sierra Leone to observe Uganda s new output-based budgeting system. DECENTRALIZATION As governments devolve and decentralize states and provinces, are in principle, taking more ownership of essential public services. In Nigeria, for example, states receive federal transfers of funds and execute their own health programs. The federal government provides regulations and some technical oversight. However, most decentralization programs are advancing at a snail s pace. Technical capacity is a key limiting factor. There are not enough skilled managers and technicians at the regional and local levels to make the systems work properly. One reform approach is to make decentralized work intrinsically more rewarding by ensuring adequate access to computers and the internet, and by encouraging skilled workers to collaborate across government ministries. In Kenya and Sierra Leone, for example, local governments have used a rapidresults approach to improve service delivery. Immunization was one of several thematic areas in the case of Kenya, where local governments achieved improvements within 100 days by engaging front-line workers in the planning process and providing them with clear goals and intensive monitoring and feedback. Greater political accountability is also needed. Properly done, decentralization transfers budgetary and fiscal control to regional and local officials. This gives elected officials at those levels a voice in the programs- and a new way to win votes. Involving the community in preparing the local budget further increases

7 transparency and accountability. The equilibrium shifts when subnational governments move from total dependence on funds from the national level to assuming a portion of recurrent program costs using local revenues. LEGISLATION The goal of sustainable immunization funding is not achieved until parliaments pass laws defining how immunization and other key programs for maternal and child health are to be financed perpetually. In the Americas, where governments currently finance 90% of immunization costs, this goal has already been reached. Mobilizing elected officials was an important step in the process. In 1994 the Pan American Health Organization engaged the Latin American Parliament in an analysis of national immunization financing policies. In 2009 the latter produced a model vaccination law. By 2010twenty-seven countries in the Americas had passed immunization financing laws and regulations. Of the fifteen countries in the sustainable immunization Financing Program, nine have drafted or introduced into parliament legislation relating to immunization financing. Members of parliaments in the other six countries have signed declarations to the effect that they would advocate for more immunization resources. THE ROLE OF THE PUBLIC Public support may be the essential factor that links budget reforms, decentralization, and legislation in a way that leads to more sustainable health financing. In a 2009 paper, Matt Andrews noted a generalized resistance to financial reforms on the part of government agencies. He cast doubt on the idea that organizations change in order to become more efficient. Instead, he theorized that they change in order to be legitimized- in other words, to meet popular expectations. Reforms are thus more likely when the government s operations are transparent and subject to scrutiny by the public. Engaging new stockholders in immunization programs and allowing managers the chance to tout their accomplishments provides an object lesson in how societies efficiently provide public goods. The Sabin program facilitates this increased public involvement through its briefings and other meetings.

8 THE ROLE OF PRIVATE SECTOR IN SUSTAINABLE NATIONAL IMMUNIZATION TRUST FUND In looking at a sustainable private sector funding for the National Immunization trust fund, the following pertinent questions readily come to mind: 1. How important is the private sector s role in immunization service delivery? 2. What functions does the private sector play and how does it affect the demand for and supply of immunization services? 3. What are the characteristics of users of immunization services in the private sector? 4. How well integrated is private sector service delivery into the national immunization and health systems? A few studies report on examples of the integration of the public sector s immunization programmes with the private sector. In these countries, the public sector is collaborating with private sector institutions so that the immunization service delivery and surveillance can be extended to parts of the country without access to services. Often the government provides vaccines, equipment and other supplies to private facilities. As a result, the programme managers can ensure that these adhere to national standards. In addition, it can obtain data on the number of immunizations that are given in private sector health facilities and / or pharmacies. In Cameroon, for example, each health area has a lead health facility, which can either be public or private, and it coordinates the distribution of vaccines and supplies and reports coverage rates of the area. In Uganda, the government also entered into a public-private partnership with not-for-profit providers. It provides vaccines, equipment and operational grants to these providers. Currently, 29 private not-for-profit facilities (13.5%) in 214 sub-districts are overseeing referrals and management of other health facilities in their sub-district. Other examples of integration occur through contracting and are found in Cambodia, Rwanda and Afghanistan. Despite the fact that immunization is a public good, has positive externalities and governments have an interest in being the main provider of vaccination, the literature review indicates that the private sector, in its

9 different variants, is active and delivering a significant proportion of vaccinations in some countries. In low-income countries, private for-profit and NGO health facilities are providing immunization services and helping to improve access to traditional EPI vaccines, particularly in Asian countries. In addition, these facilities are providing services to higher-income clients who are willing to pay for better perceived quality, shorter waiting times and closer proximity. The literature review suggests that NGOs often play a larger role in immunization service delivery than do private for-profit providers in lowincome countries, since their facilities are situated in rural as well as urban areas. Further, NGO services are more likely to be coordinated with public services, either through formal contracts or through more looselystructured mechanisms in low-income countries. In fragile countries, the review suggests that NGOs are playing a particularly important role in delivering immunization services, often under contracting-out arrangements with governments and their partners. Other gaps in provision of vaccination are filled through ad hoc service delivery by for-profit providers and non-profit providers. In middle-income countries, the private for-profit sector is active and plays a number of roles. It often acts to facilitate early adoption of new vaccines and technologies before introduction and generalization by the public sector. In addition, the review suggests that private practitioners increase access to services by offering traditional EPI vaccines. The extent that governments are regulating these providers is not known. Many of the strategies for engaging the private sector are being used in low-income countries, including fragile states, i.e. contracting, training, financing and coordinating; and paradoxically immunization services may be more well-regulated in these countries than in middle-income countries. Contracting and financing strategies have been shown to be effective at bringing services to the poor and at least partially ensuring that quality services are provided. However, little is known about the extent to which service provision is effectively regulated when formal contracting arrangements are not in place.

10 In middle-income countries, the private for-profit sector s role in provision of immunization services is more prominent than in low-income countries. The extent to which these services are regulated and what type of regulation is most effective has not been documented. Given the concerns about the quality of immunization service delivery in private health facilities, more research is needed on regulation of private sector immunization services in middle-income countries. Potential mechanisms that can be introduced to engage the private sector include: (1) involving the sector in policy and programme setting for example, private providers can be represented on national immunization technical advisory groups (NITAG) as well as other policymaking organizations; (2) introducing financial and other types of incentives to increase immunization coverage and / or access to services; and (3) regulation of service quality, payment mechanisms and fees. There are many geographical and thematic gaps in the literature on the role and regulation of the private sector in the delivery of immunization services in low-and middle-income countries. Limited studies exist on: (1) the adequacy of quality of dare of immunization service delivery in the private for-profit sector; (2) the impact of private for-profit service delivery on disparities in services delivery; (3) the effectiveness of regulating the private for-profit sector; and (4) the impact of private sector immunization service delivery on demand for traditional EPI, new and underutilized vaccines. IMMUNIZATION TRUST FUND It has always been the sole responsibility of most governments to provide resources for their immunization programmes. However, global and domestic socio-economic challenges may combine to mitigate the achievement of this major objective. Alternative innovative funding sources must be explored such as the establishment of an independent privately managed immunization trust fund, backed by law or regulation. This fund will complement the budgetary provision from the government. Measures need to be put in place to ensure that persons selected to oversee the affairs of such trust fund are eminent, resourceful and trusted citizens in the country. The main goal of the fund shall be the support of immunization service delivery for the country. The managers of the fund

11 will be held accountable to the people and contributors to the fund. Contribution to the fund may come from many domestic sources such as voluntary taxation of individuals, corporations and the organized private sector as part of their Corporate Social Responsibility. CONCLUSION The health and economic benefits of immunization have been demonstrated globally. Continued external funding sources for the immunization programme cannot be guaranteed. Nigeria must seek domestic sustainable funding sources for its immunization programme espiecially with the introduction of the more effective but costly new vaccines. Combined high-level political and legislative support for the passage of laws defining how immunization and other key programs for maternal and child health are to be financed perpetually are necessary within our countries. Subnational governments must explore the possibility of contributing more significantly to the programme rather than depending solely on the central government, other domestic innovative approaches to the funding of the programme are also worth exploring. Your excellences, distinguished ladies and gentlemen, I would like to conclude by re-affirming the commitment of Fidelity Bank Plc towards a sustainable partnership with the National Immunization Financing Task Team {NIFT} and ensuring an enduring legacy for our National Immunization Programme that meets international best practice. Thank you and God Bless.