Interesting article in The Lancet Volume 405, Issue 10493p1893-1895 May 31, 2025
Navigating health financing cliffs: a new era in global health
Kumanan Rasanathana rasanathank@who.int ∙ Maylene M Beltranc ∙ Alberta A Biritwum-Nyarkod ∙ Mark S Blechere ∙ Mark Dybulf ∙ Hajime Inoueg ∙ et al.
Complete article and references in
https://www.thelancet.com/action/showPdf?pii=S0140-6736%2825%2900720-2https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(25)00720-2/fulltext?dgcid=raven_jbs_etoc_emailAn era in global health, inaugurated in 2000 by the UN Millennium Declaration,1 has passed. This era saw large increases in domestic spending on health and official development assistance for health,2 the creation of new global health institutions, such as the Global Fund and Gavi, and impressive progress in child mortality and infectious disease epidemic control.3 The sudden passing of this era, triggered in early 2025 by rapid reductions in development assistance for health (by US, European, and other large external funders), has exacerbated existing pressures on domestic health spending (which decreased between 2021 and 2022 per capita across all countries for the first time since 20002) and led to dramatic health financing cliffs.
Domestic health financing constraints—increasing debt servicing costs, poor economic growth following the COVID-19 pandemic, and deprioritisation of health spending with increased military expenditure—reduce the ability of countries to adapt to sudden changes in external funding, especially in low-income countries (LICs) where government health spending has stagnated since 2000.2 With sharp increases in debt servicing expenditures, over 3 billion people now live in countries where governments spend more on debt payments than health or education.4 Domestic spending is of paramount importance for health coverage, as development assistance for health makes up less than 0·5% of total health spending globally.2 However, external support has played a crucial role for specific programmes, populations, and services, particularly in LICs and in humanitarian crises. Development assistance for health has already been sharply declining, following the large increases during the COVID-19 pandemic, and even earlier,5 from US$84 billion in 2021 to $65 billion in 2023.6 The prognosis is now grim: the USA alone accounted for almost a third of external health funding in 2023.6
The question is whether countries, already off-track on the universal health coverage targets of the Sustainable Development Goals,7 can navigate these health financing cliffs to sustain health services. The potential for reversal in hard-won progress and large-scale suffering and death is a severe crisis.8 To fill these sudden gaps, countries can aim to increase current domestic and external resources, establish and mobilise new funding sources, increase efficiencies, reallocate funds, emphasise equity in service delivery, and adopt innovations. The task is two-fold: to address the acute crisis, and to transform health systems for this new era of global health. Both tasks have implications for how external funders and partners provide support.
Urgent action is needed on transitional financing, including prioritising increased domestic financing supported by concessional lending and blending grants with loans (in countries that can support increased borrowing). South Africa has proposed a further $1·5 billion in the national health budget over the next xrs, partly through tax increases.9 Nigeria has allocated an additional $200 million for health in the government budget.10
Countries can also target specific health priorities to fill gaps. In Thailand, external funding for health was less than 0·4% in 2022,2 but still supported programmes for HIV/AIDS and refugees in border camps in early 2025. The Government of Thailand is mitigating the acute consequences of funding withdrawal and, long-term, is seeking to reintegrate these services into the national public health system.11 Countries also need to address financing cliffs in sectors beyond health, such as education and nutrition, which drive key social determinants.
LICs have fewer choices to combat widespread service disruptions, job losses, and undermining of supply chains and health information systems, compared with high-income and middle-income countries. In Uganda, the Government is mandating integration of HIV/AIDS, tuberculosis, hepatitis B, hypertension, and diabetes services into routine services and streamlining health systems functions to increase efficiencies. External partners, including development banks, can help by revisiting debt-to-health swaps (where creditors forgive national debt in exchange for increased domestic investment in health12), putting remaining external assistance funds on-budget, and continuing to engage in technical support and knowledge sharing after financial support ceases.13
Countries can implement legal reforms to facilitate rapid purchasing of drugs within regular public procurement systems, including regional mechanisms, such as the Pan American Health Organization Revolving Fund.14 Countries can also identify and support policy champions to advocate for increased domestic investments in services previously funded by external sources.13 Innovations in financing (eg, taxation and insurance schemes) and technology (eg, digitalisation and artificial intelligence) are not a panacea, but can assist in mobilising resources and improving efficiency and equity, if stewarded systematically by governments.
Countries can learn from each other for both immediate and long-term challenges. Global partners, such as WHO, can help to document how countries are responding to the short-term crisis and identify medium-term imperatives for transformation of health systems and optimal use of continuing external funding, including identifying scenarios and policy options to raise domestic resources and realise efficiency gains. Key areas for data and evidence to guide decision making include tracking financial flows, informing costing of programmes, establishing criteria for priority-setting, and identifying duplication and other inefficiencies from parallel programmes that can arise from external support.
Low data transparency and insufficient information on which funds flow to which services compound the difficulty of mobilising domestic resources to respond to changes in external funding. There is a need to improve monitoring and related accountability of financing for countries and external funders alike.15 In the medium term, the current fragmented data systems and information flows need reform to enable the system-wide allocation of domestic and external resources to meet population health needs most efficiently. South Africa provides an example of how financial data can be linked to implementation indicators to improve financial accountability.16
The new era of global health must be rapidly constructed without seeking merely to restore what was. The previous era was already likely to end in 2030—despite the current unprecedented reductions, development assistance for health was already declining in the lead up to 2030 and the passing of the Sustainable Development Goals. Calls for greater national and regional leadership and ownership were already strong, as seen in the Lusaka Agenda.17 Overhauling the global health financing architecture requires grappling with the power asymmetries and misaligned incentive structures that have led to the current financial cliffs. Countries have progressed the universal health coverage agenda in previous times of fiscal constraint and there is the potential for greater South–South support. To minimise suffering and death in this crisis, countries have no choice but to exert more leadership and responsibility. Global health and development finance institutions must address their own challenges, adapting their financing and operating models, to robustly support countries to do so.
