Transitioning programmes to government

External donors have historically contributed a significant amount of financing for health programmes in low- and middle-income countries. However, as countries grow economically, donors expect countries to transition away progressively and sustainably from external financing and towards domestically funded health programmes.

Capacity development is given top priority in all countries where UNDP acts as interim Principal Recipient of the Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) grants for HIV, tuberculosis and malaria programmes or as a channel for other donor funding to reach the implementation level, onwards to both government and civil society entities. The aim of its technical assistance is to transition the management and implementation of these programmes to national entities once capacity in the national organization is strong. A well-planned and well-managed transition process helps to avoid disruptions to service delivery and ensure the long-term sustainability and efficiency of vital health programmes.

In countries preparing for the transition from donor- to domestically funded programmes, early and extensive planning may be needed to mobilize domestic financing to cover costs previously funded by donors, such as HIV treatment and prevention services targeted towards key populations. To leverage additional domestic financing, there is a need to support domestic advocacy for increased health spending and to assess what alternative innovative financing mechanisms can be developed to reduce dependence on donors.

As more countries transition out of external financial support for health programmes, it is also important to consider the potential impact of the transition on continuity and access to services for the most vulnerable and marginalized populations. Particularly for the delivery of HIV services, the transition may have a negative impact on key populations that experience higher rates of HIV infection, such as men who have sex with men, people who inject drugs and transgender people, and those who face stigma and discrimination that may prevent them from accessing services under government-funded responses.

The pages in this section provide guidance and tools pertaining to UNDP’s approach to transition planning in the context of the Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) and other health programmes, as well as broader support to build the enabling environment for sustainable and equitable health outcomes following a transition. This includes, in particular, technical assistance to help countries strengthen the availability and efficiency of domestic financing for health and support to establish mechanisms for the public funding of civil society organizations, or social contracting, most notably for community-based HIV service delivery to key populations.

Transition planning should ideally be conducted at the beginning of a grant with the identification of a future national organization to assume management of the grant, at the same time as capacity development planning. In this way, selected capacity development planning milestones become transition “triggers” for certain functions. When planning a programme transition process, the first step is to consider what the transition options are and what criteria will be used to evaluate the options. Based on this information, a programme transition strategy can be developed to guide the process. A detailed programme transition plan outlines all activities that are required to transition the grant management role from UNDP to one or more national entities, with a clear timeline for implementation.

UNDP’s approach

When serving as interim Principal Recipient of a Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) programme, UNDP works in partnership with country stakeholders from the start of the grant to establish the necessary capacities, systems and processes to enable the sustainable transition of programmes to national entities. It leverages existing tools and frameworks to help governments establish transition plans, with measurable milestones and concrete timelines, to ensure a tailored and gradual approach to the transition.

UNDP provides ongoing technical assistance beyond any handover to continue to develop the capacity of national entities. In many countries, UNDP does this through an advisory role, including through health coordinating mechanisms such as the Global Fund Country Coordinating Mechanisms or directly to implementing partners. UNDP also provides substantial health procurement support to national governments, including strengthening supply chains to ensure uninterrupted access to quality-assured medicines, continuing to procure health products after the transition to other functions.

UNDP places particular emphasis on supporting national entities to sustain HIV and other essential services for key and vulnerable populations and promote gender equity in disease responses. To this end, it helps to conduct transition readiness assessments that examine the legal and policy environments influencing access to health services, including structures that empower civil society organizations (CSO), which are often crucial to the success of health programmes in countries where key populations are disproportionately affected by the three diseases and are criminalized or marginalized. Strengthening the capacity of civil society implementing partners while donors are still present can help to ensure that CSOs are prepared to deliver services adequately and to advocate for their sustained financing after the exit of external financing. Visit the “Social contracting” page for more details on strengthening public funding for CSO service delivery. The “Human rights and legal environment” page offers guidance on UNDP’s work to strengthen legal and policy environments for key populations and other vulnerable groups, whether in the context of a programme transition or through technical assistance to national partners.

In addition, UNDP supports countries in planning and transitioning from donor support to domestically funded health programmes by analysing domestic funding options and revenue generation strategies and supporting investment cases to strengthen advocacy for health financing. See the “Sustainable financing” page for more information.

Tools and guidance

UNDP has designed a range of tools, guidance and templates to support transition processes for the Global Fund grants, which have been tested in a number of countries and can be adapted for the country context. This includes a comprehensive framework and tools for the development of a programme transition plan or strategy, as available in the key resources below. The objective of a transition plan is to design a staggered process to allow for grant management responsibilities to move from UNDP to the national entities, developing capacity where required during this time.

As part of its transition planning approach, UNDP helps partners to 1) establish management arrangements, including, where relevant, by setting up programme management units within ministries of health; 2) identify milestone indicators, transition schedules and risk mitigation measures; 3) develop budget estimates; and 4) generate consensus and approval among key stakeholders.

Further detail on the steps and considerations for carrying out a programme transition process can be found in the UNDP guidance on planning and implementing a programme transition strategy for Global Fund grants.

Some key points to consider in designing and implementing a transition plan include the following:

• Where possible, planning for transition should be done at the same time as capacity development planning, to define the desired capacity in each area and to set measurable milestones for the transfer of responsibilities. This may not always be possible, and, if not, a schedule for developing a transition plan should be included in the capacity development plan. Implementation of the transition plan can start when the capacity is strengthened.
• While a capacity development plan is owned by the national entity, a transition plan is jointly owned and managed by both the national entity and UNDP. Both organizations have important responsibilities to ensure a successful and sustainable handover of the grant management role. There are linkages between the capacity development plan and a transition plan, in that some transition activities may not be completed until capacity is strengthened.
• The completion of a transition is sometimes dependent on capacity being developed and, following this, agreement from the donor that the national entity now has the required capacity to manage the grant. As with all capacity development, the focus should be on the development of national systems as opposed to stand-alone systems to manage a single grant.
• A programme transition or transfer plan should also include a risk assessment, identifying possible risks associated with moving responsibility for essential health services from one grant manager to another and finding strategies to deal with these risks. The management of these risks should be monitored and controlled by the group overseeing the implementation of the capacity development.

Purpose

Communities and civil society organizations (CSOs) have been instrumental in driving the global HIV response from its earliest days. Community-based organizations have spearheaded advocacy efforts to expand access to prevention, treatment, care and support services for all in need, regardless of location and socioeconomic status. Governments, multilateral organizations and donors have come to recognize the vital role of CSOs and communities, not only in advocating for HIV services, but also in providing the services themselves, reaching those who may otherwise be left behind. Drawing on lessons learned from the HIV response, CSOs also play a significant service delivery role in tuberculosis and malaria responses.

The sustainability of critical services provided by CSOs depends on CSOs accessing diversified funding sources. “Social contracting” has been shown to be an efficient and cost-effective way to formally reinforce the link between CSOs and government, and to channel funding to CSOs to provide services that can strengthen national disease responses and health systems. While there is no universally adopted definition of social contracting, it is broadly understood as CSOs (which include and serve key populations) receiving domestic funding to deliver health prevention, treatment, care and support services.

The COVID-19 pandemic has further illustrated the critical role that CSOs can play in advocacy for and delivery of health services to vulnerable communities. Allocating public finances to civil society service delivery in the COVID-19 response is instrumental in leaving no one behind and building forward better.

UNDP’s Approach

UNDP identifies non-governmental organizations (NGOs) as key players in the transition process towards domestic financing of national HIV responses. UNDP carries out analyses of legal frameworks, related to the social contracting of NGOs as providers of health-related services, particularly those related to HIV, and makes recommendations to countries on legal frameworks and the current practice of social contracting between governments and NGOs. UNDP works with national stakeholders to ensure that NGOs are explicitly recognized as partners and service providers in public health legislation and policies. UNDP also engages with partners to advance this goal through convening consultations and developing or contributing to guidance materials.

Tools and guidance

UNDP has developed an NGO guidance note, which aims to help international organizations, government, non-governmental organizations (NGOs) and other stakeholders to develop fact sheets and to use the facts and recommended actions to set up or improve NGO social contracting mechanisms. A step-by-step guide is provided, allowing not only easy use, but also a standardization .

In 2019, UNDP published a collection of case studies which features experiences from eight middle-income countries that are at various stages of developing social contracting mechanisms to support their responses to HIV. The case studies examine contextual factors such as health systems, human rights, governance systems, disease epidemiology and response, space for civil society overall and experience in social contracting.

A key message to country stakeholders, donors and technical partners from the eight case studies is that it is essential to start work on social contracting early, with meaningful community engagement, investing in enabling laws and policies, contextualizing and preparing customized solutions (testing and improving them) and, ultimately, integrating solutions into public health responses. Examples from countries with developed social contracting mechanisms convincingly demonstrate that these mechanisms can be effective and sustainable solutions for community-led service delivery.

The Sustainability, Transition and Co-financing guidance note by the Global Fund to Fight AIDS, Tuberculosis and Malaria (The Global Fund) is intended to support countries to strengthen sustainability, increase domestic financing and enhance preparations for the transition from the Global Fund support as they develop funding requests, implement the Global Fund grants and manage national HIV, tuberculosis and malaria programmes. To support country-level dialogue on the development of activities to support social contracting mechanisms, a specific annex dedicated to public financing of civil society service provision is now included in this guidance.

As part of its technical assistance to countries, UNDP supports evidence generation and advocacy to promote stakeholder buy-in, national leadership and increased investments in NGO social contracting for HIV prevention and other health services for key populations. As one approach to support advocacy for investments in social contracting, UNDP has adapted its existing social return on investment (SROI) methodology to determine the social returns of governments’ use of social contracting for health services. It piloted the SROI methodology with a focus on HIV activities funded by social contracting in three countries in Eastern Europe and Central Asia in 2020, with the results showing significant social returns. Building on this pilot, UNDP is developing a global guidance note to support stakeholders in other regions to apply the SROI methodology for HIV-related services delivered through social contracting to key and marginalized populations. SROI analyses can be used as part of lobbying activities to emphasize the benefits brought about by social contracting, increase domestic funding for it and inform decision-making to channel funds into NGO activities that yield the greatest social impact, with a focus on reaching the most marginalized groups.

Financing is a core element of health systems and a key enabling factor in the ability of countries to achieve universal health coverage. As part of its focus on promoting resilient and sustainable systems for health, UNDP works with partners to support investment strategies, national policies and regulatory frameworks to strengthen financing and public financial management for health.

Despite significant increases in domestic financing to address HIV and other health challenges in the last few years, many countries remain heavily dependent on external funding sources. As countries work to achieve the ambitious targets set by the 2030 Agenda for Sustainable Development, the sustainability of financing for health has gained increasing attention as a priority issue for sustainable development. Transforming health systems to achieve the SDG 3 targets is estimated to require an additional US$371 billion per year by 2030, for 67 low- and middle-income countries (LMICs), which make up 95 percent of the total population in LMICs.

The design and implementation of health financing policies influence the extent to which health systems can deliver quality health services, equitable utilization of resources, and financial protection for vulnerable populations. While domestic resource mobilization is one key dimension of sustainable financing, economic growth does not guarantee increased national budget allocations for health, nor do increased health budgets ensure that available resources for health reach the populations who need them most.

Strengthening financing for health calls for a holistic focus that prioritizes improvements to the efficiency and strategic use of existing resources as much as efforts to generate revenue, both domestic and international, in alignment with national development strategies. This includes the integration of health into national budgets for development, innovative financing and co-financing approaches, understanding and addressing co-morbidities, strengthened governance, and ensuring appropriate focus on key populations and synergies with other development objectives.

Context

Strong economic growth over the past two decades has resulted in more countries transitioning from low- to middle-income status. Amid broader trends of declining official development assistance (ODA) flows, external aid for health peaked in 2014 but has remained stagnant since 2015. Although government health spending grew between 2000 and 2018, with global spending on health reaching $8.3 trillion in 2018, it was slower than in recent years.

Prior to the COVID-19 pandemic, strained national budgets and reduced external support limited government capacities to expand health services towards the achievement of universal coverage, particularly in low-income countries. Global HIV/AIDS spending has remained flat for years, after peaking in 2013, compounding challenges for countries previously dependent on development assistance for their disease response (UNAIDS, Resources and financing, 2021).

The economic shocks triggered by the COVID-19 pandemic, coupled with the devastating impact on health systems, have exacerbated previous health financing vulnerabilities. The global gross domestic product loss due to the COVID-19 pandemic in 2020 was estimated to be approximately $4 trillion. Deep economic contractions in donor countries threaten the external financing flows to lower income countries, for which aid makes up nearly 30 per cent of health spending on average. The growing needs for health services amid the health crisis combined with a more fiscally constrained environment threaten to reverse progress on universal health coverage and widen existing health inequities (WHO, Global Health Expenditure Report, 2020).

What does sustainable health financing entail?

The design and implementation of health financing policies influence the extent to which health systems can deliver high-quality health services, equitable utilization of resources, and financial protection for vulnerable populations. While domestic resource mobilization is one key dimension of sustainable financing, economic growth does not guarantee increased national budget allocations for health, nor do increased health budgets ensure that available resources for health reach the populations who need them most.

Strengthening financing for health calls for a holistic focus that prioritizes improvements to the efficiency and strategic use of existing resources as much as efforts to generate revenue, both domestic and international, in alignment with national development strategies. This includes the integration of health into national budgets for development, innovative financing and co-financing approaches, understanding and addressing co-morbidities, strengthened governance, and ensuring the appropriate focus on key populations and synergies with other development objectives.

Beyond ensuring there are sufficient resources to support the full functioning of the health system, sustainable health financing also refers to the efficacy of such funding in protecting the population from financial risks in accessing the health services they require. A key role for sustainable health financing is thus to support health systems to achieve universal health coverage by reducing health inequities and minimizing financial hardship on the poor.

As defined by the World Health Organization (WHO), health financing consists of a range of functions, including revenue raising, pooling and purchasing, as well as policies relating to service benefits to which some or all of the population are entitled. The entry points to improving the sustainability and impact of health financing are numerous, necessitating a combination of approaches at both the policy and programme levels. They entail considerations for, inter alia, budgeting frameworks, the design of benefit packages for health, social protection and health insurance frameworks, including community-based health insurance and free health care policies, resource-tracking and revenue-raising, fiscal space for health and public health taxes.

Among the key cross-cutting areas for improved health financing is that of public financial management (PFM). A strong PFM system – the institutions, policies and processes that govern the use of public funds – can ensure higher and more predictable budget allocations, reduced fragmentation in revenue streams and funding flows, timely budget execution and better financial accountability and transparency.

Given that public funds are the cornerstone of sustainable health financing in most countries, WHO underscores the central role for systems as a key enabling factor to achieve universal health coverage. A strong PFM system – the institutions, policies and processes that govern the use of public funds – can ensure higher and more predictable budget allocations, reduced fragmentation in revenue streams and funding flows, timely budget execution, and better financial accountability and transparency.

UNDP’s approach

Among the action areas which UNDP focuses its policy and programme support for health and development, as outlined in its HIV and Health Annual Report 2020-2021, sustainable health financing is a priority area through which UNDP promotes effective and inclusive governance for health. This cross-cutting policy focus complements and reinforces UNDP’s support to national partners in implementing large-scale health programmes in challenging operating environments, as part of UNDP provides technical assistance and capacity building to strengthen frameworks and processes for financial management.

UNDP service offerings for sustainable health financing include policy and programme support on:

• improving efficiencies, including allocative efficiencies, for HIV and health;
• innovative approaches to sustainable HIV and health financing, including developing investment strategies and national investment cases using a rights-based approach and leveraging other activities such as social contracting of civil society organisations to increase domestic financing for health.

UNDP also engages in global and regional processes and partnerships that contribute to sustainable health financing. In the Joint United Nations Programme on HIV/AIDS (UNAIDS) Division of Labour, UNDP is co-convener with the World Bank for the “Investment and Efficiency” thematic area.

Beyond HIV and health, UNDP plays a lead role in promoting financing solutions for sustainable development, as part of its mandate to support SDG implementation. UNDP provides knowledge leadership to contribute to the evidence base on sustainable financing and help countries identify and implement catalytic approaches. The online platform ‘Finance Sector Hub’ discusses UNDP’s tools and broader support to sustainable SDG financing.

Tools and approaches

UNDP, together with partners, supports sustainable health financing through a diversity of approaches, including those to generate revenue, avoid future expenditures, deliver better, and realign expenditures. Its aim is to enhance the sustainability and impact of health financing systems. Within its focus on promoting the mobilization and effective use of domestic public resources, UNDP provides support to countries by modelling optimized investment approaches, promoting affordable access to medicines and advising on transition processes related to domestic financing of national disease programmes .