Reimagining Global Health Financing: How Refocusing Health Aid at the Margin Could Strengthen Health Systems and Futureproof Aid Financial Flows

Health aid has helped domestic financing achieve historic gains in global health but there is much still to be done. Six major issues currently prevent aid from being more effective, fit for the future, and aligned with country priorities, namely: funding volatility, aid fragmentation, the displacement of domestic finance, ineffective prioritization, the lack of transition planning, and the lack of country ownership. We propose a new model that aims to address these challenges: that domestic finances should support essential health services and health aid should primarily be used to expand the package of affordable services at the margin. Instead of targeting the most cost-effective interventions, donors should support countries to have strong and effective prioritisation processes and direct any additional financial support for health services to those that would otherwise not be covered by domestic funds. A marginal aid approach would address issues of volatility, fragmentation, and fungibility, and encourage better planning and prioritisation by countries and donors, leading to more overall health for the money. As countries’ health financing improves, health aid focused at the margin is naturally crowded out, offering a seamless aid exit strategy for thriving countries and ensuring the sustainability of financing for countries that continue to need support. Perhaps most fundamentally, a marginal aid approach empowers national decision makers and national policy processes.