Innovative and Sustainable Financing Mechanism for Health Promotion and Tobacco Control

About Lesson

4.3 Generating evidence to support policy development for health promotion fund

Introduction

This section will help you to:

Understand the nature of the work (political process rather than research)
Understand that evidence should be practical and adhere to bounded rationality (i.e. satisfactory and sufficing)
Find and use key evidence that addresses concerned players
Understand the different concerned players (politicians, bureaucrats, general public, tobacco companies)
Integrate quantitative info with qualitative findings (testimony, opinion polls, public figures’ quotes, news articles, reports, etc.)

Sample of Policy Landscape of Concerned Players

It is an important step to understand the different concerned players.

Expand the boxes to learn more.

Bureaucrats

Concerned with budget allocation, activity effectiveness, impact on affected parties
Control of power, sensitive to rivalry
Different Ministries have additional concerns- i.e. smuggling for Ministry of Finance

Politicians

Concerned with how the policy affects their credit
Prefer quick wins with less complexity
Don’t like to go against the bureaucrats but love a bit of extra initiative
Confidence is a decisive factor

General public

Concerned with how the policy affects them and their community
Concrete service, activities
Follow common beliefs, popular judgements, positive public figures

Civil Societies

Concerned with how the policy aligns with their mission and activities
Funding eligibility
Variety of value and interests

Expand to read about Ottawa Charter for Health Promotion (WHO, 1986)

Define your “Health Promotion”

The 1986 Ottawa Charter for Health Promotion defined health as a person’s overall sense of physical, emotional, and social well-being. Health promotion is implemented in various settings based on the framework that was established in the charter.

“Health promotion is the process of enabling people to increase control over and to improve their health. It moves beyond a focus on individual behaviour towards a wide range of social and environmental interventions. It is not merely the delivery of health education messages but encompasses the building and prioritisation of healthy public policies, creating a supportive environment, strengthening community action, developing personal skills, and reorienting health services”.

To read more, visit the HPF Hub website

Evidence to Support Health Tax for Health Promotion Fund

Evidence on Problems

Expand the boxes to learn more.

Epidemiology study

Harms from the products (tobacco, alcohol, and sugar-sweetened beverages (SSBs)

Health harms: burden of diseases, DALYS, deaths
Secondary harms
Social harms
Economic harms: health care cost, social costs of consumption, productivity loss
Environmental harms

Country's performance comparison

Highlight the country's poor performance in comparison with other countries regionally, and worldwide (ranking)

Magnitudes and trends of problems

Especially among vulnerable populations (such as children, women)
Consumptions and exposure (levels, risky patterns): prevalence, total numbers

Policy gap

Inadequate actions/ investment in prevention programmes
Against the magnitude of the problems
In comparison with other health problems

Costs of inactions

What losses will be if there is no action starting NOW?

Evidence on Solutions

Click the boxes to learn more.

Values of policy proposal

Right to health, children protection, equity, fairness, consumer rights
Obligations toward FCTC/international agreements
Commitments on global /regional policy

Effectiveness of policy proposal

Reduce consumption and those related harms

Best practices worldwide

Integrate both quantitative and qualitative approaches in the learning process with partners

Public support (through polls, surveys)

Return on investment in policy proposal if implemented

Predicted economic gains (Modelling study)

Increase in revenue
Productivity gain due to reduced harms/ consumptions (e.g. premature deaths, health care costs)
In comparison with health care expenditures

Evidence for Policy Model Development

Click on the arrows to learn more.

What is the budget size for a health promotion fund?

(prepare local evidence/estimations)

Analysis of government revenue/budget (% by sources of revenue, % budget allocation by sectors
Determine (1) how much $ in total = (2) how many % of GDP = (3) how many % dedicated/ surcharged from tobacco/ alcohol/ sugar-sweetened beverages (SSB) tax(es)
Comparison pros and cons of policy model options (dedicated vs surcharged)
The fund is used for (health promotion, tobacco control, non-communicable diseases control, and prevention programmes)
Governance structure/model
(1) autonomous agency
(2) semi-autonomous agency
(3) unit within the government structure

Q: What is the difference between dedicated and surcharge tax?

A: The term “surcharge tax” refers to requiring the industry to pay a percentage of “additional tax” on top of the excise tax, while “dedicated tax” is a tax that has been collected by the Ministry of Finance and is set aside for health promotion.

Policy platform for a policy proposal

Policy landscape, taxations, and its development process (entry points, level of policy, decision-making bodies)

Proposed health promotion fund proposal

The fund should be bound by clear legislation that stipulates:

the objectives of the fund
- What the Act/law is intended to achieve. For example, the purpose of the legislation may be to discourage tobacco. smoking/alcohol use and SBB intake, promote good health, and prevent non-communicable related diseases and premature deaths
the sources of funding
- A percentage of dedicated/ surcharged from tobacco/ alcohol/ SSB tax(es) or other tax amount should be included
- It is necessary to specify the funding level and source that will not be the subject of any discretionary policy which may lead to reduced amounts during tight budgetary periods
- Current health budget and source of budget (adequacy, and sustainability)
the means of administering the fund
- Comparison of pros and cons of governance options/health promotion models (autonomous vs. semi-autonomous vs. unit within the government structure)
- Identify a proper governance/structure for the multisectoral coordination body based on the country context
the processes for transparency and accountability
- Whatever the health promotion model, it will include transparent and open financial accounting arrangements, which must be independently audited. The organization will have significant funding for health promotion/ tobacco control. The outcomes of the programmes, as well as the management of the funds, will be subject to much scrutiny, particularly by those groups that may have opposed the establishment of the fund (either via dedicated/surcharged taxes). It is therefore important to demonstrate that these funds are well managed and accounted for

Benefits of health promotion fund policy

Estimated impacts of innovative financing mechanisms in the coming years on

increased government revenues
reduced consumption due to lesser affordability
reduced harms

Existing legislative (weaknesses/barriers/opportunities)

analyse the adequacy, efficiency, and sustainability of existing law/regulations
to consider for amendment, revision, integration in existing drafts replacement with a new legislation

Evidence on Policy Advocacy

Political mapping to identify “potential policy champion(s)”
Identify movements and champions within Ministry of Health
Stakeholder mapping and analysis (like-minded NGOs, policy sectors)
Mapping of industry and their allies
Identify window of opportunities (e.g. existing drafts, recent policy changes)
Documentation and analysis industry’s positions/responses during the policy development process - prepare for counteractions
Evidence for raising public awareness

Health Tax: A Win-Win Policy

Expand the boxes to learn more.

Effective fiscal tool to secure a sustainable and adequate fund for health

In most low and middle-income countries, a health promotion budget is a very low priority and external sources of funding are limited and insufficient to address NCD prevention and control. Increasing health taxes on tobacco, alcohol, and sugar-sweetened beverages is the most cost-effective tool for (1) reducing the affordability of health-harming products; (2) reducing the non-communicable diseases (NCDs); (3) generating increased revenue offers a predictable domestic resource stream for the government. Health taxes are pro-poor, as the health benefits accrue disproportionally to those with low incomes, who become less likely to purchase them as prices rise. A dedicated/specific source of funding provides a predictable, more stable amount of budget.

A dedicated/specific source of funding provides a predictable, more stable amount of budget

Secure long-term investment for improving health promotion funding. The fund enables development of innovative long-term strategies across all levels and sectors within a society to support the desired policy, environmental and individual behavior changes. A health promotion fund is also a resource that is available for rapid response in the event of unanticipated health risks emerging in communities.

New budget mechanism – if surcharged, does not come from the general health budget, not competing with other items

A small percentage of the surcharge tax on tobacco and alcohol is paid by the industry on top of the existing excise tax it pays, the government has a net gain using an efficient and existing collection mechanism. The full amount of excise taxes is collected by a finance ministry and, at the same time, the extra surcharge tax is directed to the health promotion fund.
In other words, the source of funding derived from a surcharge tax on tobacco and alcohol products and collected directly from tobacco and alcohol producers, and its dedication to health promotion fund as a new budget mechanism for health.

Tobacco/alcohol industry should pay for this via tax (polluter pay principle)

Adopting the “polluter pays” principle means holding the manufacturers of harmful products – like tobacco companies – responsible for the harm they inflict. The social, economic, and health costs of the consumption of harmful products is shifted to the entity producing and marketing the products. A portion of the funds collected from the polluter can then be allocated to programmes that support individuals to quit these harmful products (e.g. smoking cessation programmes).
Governments would suffer no fiscal losses or reduction in revenue (assuming implementation of a surcharge tax). But over time, the gains from health care cost savings would be significant.

Fund used to strengthen and support various health programmes

Stable funding generated from dedicated tax revenues enable implementation of both short-and long- term health promotion projects. These include promoting good and healthy lifestyles through health education and media campaigns to reduce tobacco and alcohol use and other NCD risk factors. It can also be used to fund researches pertaining to the health, social, and economic impacts on society, provide sponsorship of sports, recreation, arts and cultural activities, and a variety of other health- related initiatives.
It is essential to emphasize that “Prevention is better than cure”, “Prevention is cheaper than treatment”, and “Promoting or building health is better than repairing health”.

Important preparation when developing or advocating for this policy

Click on the boxes to learn more.

What you need to understand

What is your goals and the political processes in your country?

What you need to identify

What are the key concerns and interests of players on this issue?

Which approach to use

Integrate both quantitative and qualitative approaches in the learning process with partners

Expand your knowledge

Expand your horizons by studying case studies and models from international sources (it's all in this course!)

What should you do

Relate to case studies and successful models to the policy entry in your country’s political context
Make the policymakers look like the winner by supporting your proposal

Four principles for effective communication for policy changes

The Right Information
In the Right Format
To the Right Actors
At the Right Time