Health Aid Is Allocated Efficiently, But Not Optimally: Insights From A Review Of Cost-Effectiveness Studies

Development assistance from high-income countries to the health sectors of low- and middle-income countries (health aid) is an important source of funding for health in low- and middle-income countries. However, the relationship between health aid and the expected health improvements from those expenditures--the cost-effectiveness of targeted interventions--remains unknown. We reviewed the literature for cost-effectiveness of interventions targeting five disease categories: HIV; malaria; tuberculosis; noncommunicable diseases; and maternal, newborn, and child health. We measured the alignment between health aid and cost-effectiveness, and we examined the possibility of better alignment by simulating health aid reallocation. The relationship between health aid and incremental cost-effectiveness ratios is negative and significant: More health aid is going to disease categories with more cost-effective interventions. Changing the allocation of health aid earmarked funding could lead to greater health gains even without expanding overall disbursements. The greatest improvements in the alignment would be achieved by reallocating some aid from HIV or maternal, newborn, and child health to malaria or TB. We conclude that health aid is generally aligned with cost-effectiveness considerations, but in some countries this alignment could be improved.