1. Identified Challenges

A. Crisis and Contraction of External Financing

The region is experiencing a substantial reduction in non-reimbursable cooperation flows, as it is increasingly perceived as less attractive to global donors who prioritize Africa and Asia.

• Reduction of traditional sources: Agencies and programs that previously provided significant resources have reduced or suspended their operations in some countries
• Volatile dependency: The funding that does arrive is highly dependent on fluctuations in the political landscape of donor countries. Cooperation now comes mainly in the form of loans with conditionalities, often earmarked for specific projects such as hospital construction, which limits flexibility and increases debt.
• Graduation and middle-income dilemma: There is great uncertainty due to some organizations’ willingness to “graduate” countries from aid eligibility. The region is “not poor enough to receive cooperation, nor rich enough to sit at the decision-making table.” This results in the loss of non-reimbursable aid and favorable financial conditions.
• Overlooked vulnerabilities: Small Island Developing States (SIDS) are classified as “high-income” despite having to invest significant resources annually to recover from climate emergencies and natural disasters.
• Nonexistent South-South financing: A major challenge lies in financing international and South-South cooperation, as no sustainable mechanisms currently exist for regional cooperation.
• Shifting priorities: At present, non-reimbursable cooperation tends to prioritize climate change, the environment, and food security, relegating health issues to a secondary level.

 

B. Structural Limitations of National Financing

• Structural resource gap: Health budgets in many countries fall short of the recommended 5% of GDP. Countries investing only 2–4% of GDP will not be able to meet their needs.
• Lack of sustainability: Projects financed by external donors lack long-term sustainability; once the cooperating organization withdraws, “everything is lost.”
• Political resistance to new taxes: The introduction of taxes to finance health programs faces high social and political sensitivity. For such measures to gain acceptance, their health benefits must be clearly demonstrated and communicated; otherwise, they may trigger opposition or protests.
• Weak local philanthropic culture: Unlike other regions, there is little tradition of private or philanthropic donations to public health or social development causes, reducing alternative sources of funding.
• Trust issues: There is a historical record of mistrust and corruption, including the misappropriation of monetary donations.

1. C. Inefficiency and Governance Issues

• Fragmentation and duplication: Multiple donors operate in the same geographic areas without coordination, resulting in inefficient use of scarce resources.
• Misalignment of priorities: The bulk of assistance is concentrated on two or three diseases, while the actual burden of disease has shifted toward major issues such as chronic malnutrition, noncommunicable diseases, and mental health—areas where the response remains insufficient.
• Misalignment of priorities: The bulk of assistance is concentrated on two or three diseases, while the actual burden of disease has shifted toward major issues such as chronic malnutrition, noncommunicable diseases, and mental health—areas where the response remains insufficient.
• Lack of high-level mandate: The core problem lies in governance rather than financing. Existing platforms are limited in their ability to bring together presidents, prime ministers, and finance ministers to make binding regional decisions.
• Absence of binding mechanisms: The international health cooperation system lacks binding mechanisms and effective sanctions, functioning chaotically compared to systems such as banking or aviation.
• Bureaucracy: Funds often end up sustaining bureaucracies rather than generating tangible impact on the ground.

 

2. Identified Proposals

1. A. Innovative Financing Mechanisms

• Taxes on harmful products: There is openness and broad consensus regarding the imposition of taxes on products harmful to health (tobacco, alcohol, sugary drinks, ultra-processed foods). Regional harmonization of such taxes is required.
• Regional and contingency funds: Establish regional emergency funds to enable rapid response to health crises. It is proposed to expand and strengthen the Revolving Fund model to other areas, providing it with financial reengineering so it can offer guarantees and become operational from day one.
• Private investment and venture capital: Explore venture capital mechanisms for health innovations that can generate returns and promote reinvestment. The proposal calls for the integration of all sectors, including chambers of commerce, industry, and tourism.
• Catalytic, results-based financing: Link financing to specific and measurable achievements in areas with high return on investment, associated with quality goals (e.g., surgical waiting times for breast cancer).
• New sources of regional revenue: Suggestions include increasing tourism-related taxes and exploring a multilateral investment model applied to the health sector that generates dividends for participating countries.
• Local and regional philanthropy: Coordinate local philanthropic foundations (which currently invest only domestically) to support regional programs.
• Financial instruments for emergencies: Design pre-approved “peace-time” instruments for pandemic response that can be activated immediately without negotiation during a crisis.

B. Reform of Financial and Governance Architecture

• Reform of multilateral banks: The concept of Fair International Financing is proposed, emphasizing that institutions such as the World Bank, the IADB, and CAF should focus on long-term financing for structural reforms, rather than on isolated or short-term programs.
• Revision of graduation criteria: It is essential to review the criteria that label countries (such as SIDS) as high-income, to account for their particular vulnerabilities and ensure continued access to concessional financing.
• Enhanced national ownership: Restore and strengthen the mandate of national governments, making them primarily responsible for financing their own health systems.

C. Efficiency and Coordination of Expenditures

• Harmonization among donors and processes: Donors should establish standardized and mandatory requirements for governments to prevent duplication. Major actors must coordinate and align their procedures to ensure a more country-driven approach.
• Regional joint procurement: Expand pooled procurement mechanisms beyond vaccines and medicines to achieve greater economies of scale.
• Outsourcing procurement: Engage private companies to manage revolving funds, continuously seeking better prices and a broader pool of suppliers.
• Reduction of bureaucracy: Cut administrative costs and consolidate overlapping offices to free up resources, aiming for an “extraordinarily lean” structure.
• South-South cooperation: View South-South cooperation as a significant and strategic tool for development and capacity building.
• Regional supply hub: Establish regional warehouses for the distribution of personal protective equipment (PPE) and vaccines.

3. Areas of Convergence and Tension

A. Areas of Convergence

1. Urgency and sustainability: There is universal consensus regarding the financing crisis and the need to identify stable and sustainable sources, as the current model is not viable.
2. Governance over financing: Broad agreement exists that the core issue lies in governance—how decisions are made and how resources are allocated—rather than in the sheer volume of funds. Decision-making must involve presidents and ministers of finance.
3. Innovative mechanisms and diversification: There is strong support for exploring public–private partnerships and other creative mechanisms to diversify funding sources beyond traditional donors.
4. Regional coordination and procurement: Current fragmentation is inefficient and must be reduced. Strengthening regional procurement and supply systems is essential to achieve economies of scale.
5. Role of the private sector: There is consensus that the private sector should play a role in financing, provided that transparency is ensured and conflicts of interest are considered.

B. Identified Tensions

1. Sovereignty vs. conditionality and efficiency: A tension persists between accepting funds that come with conditions (which may improve outcomes) and maintaining national autonomy and sovereignty in health decision-making. This dilemma is reflected in debates such as the harmonization of regional taxes (e.g., tobacco) versus the defense of fiscal sovereignty.
2. Role and ethics of the private sector: While its involvement is acknowledged as necessary, concerns remain about the risks of capture and conflicts of interest. It is noted that the objective of the private sector “is not to improve health, but to improve the bottom line.”
3. Investment vs. donation/expenditure: Debate continues over whether financing should primarily take the form of grants, concessional loans, or investments with expected returns. There is tension between those who view health as an investment and those who regard it as an expenditure.
4. Vertical vs. horizontal approaches: The long-standing debate persists over whether financing should remain focused on specific diseases or transition toward the comprehensive and horizontal strengthening of health systems.
5. Equity vs. ability to pay: There is tension around designing a regional contribution model, as fixed quotas are not feasible given the wide disparities in national fiscal capacities.

1. C. Identified Contradictions

• National prioritization: All actors acknowledge the financing crisis, yet few countries significantly prioritize increasing public health expenditure within the current fiscal context.
• Bureaucracy: While the bureaucracy of international organizations is criticized, there are simultaneous proposals to create new mechanisms that could themselves increase bureaucratic complexity.
• Philanthropy: There is interest in attracting international philanthropy without adequately developing local philanthropic ecosystems.

4. Proposed Questions for Working Groups

(select the questions that better allies to the group objectives)

Working Group 1: Governance, Political Mandate, and Architecture

1. How can a high-level political mandate for health financing be established, involving presidents and ministers of finance?
2. What regional platform could be empowered to make binding decisions on financing for regional public goods?
3. How can legally binding financing mechanisms with effective enforcement and sanctions be designed, similar to international banking or aviation systems?
4. How can multilateral banks be reformed to become more responsive to regional health needs?
5. How can conditionalities that improve effectiveness be balanced with respect for national sovereignty in health decision-making?
6. What coordination mechanisms among funders have proven effective, and how can they be scaled up?

Working Group 2: Innovative Sources and Sustainability

1. What role should sin taxes and other innovative taxes play in regional health financing?
2. How can taxes on harmful products (tobacco, alcohol, ultra-processed foods) be harmonized without infringing on each country’s fiscal sovereignty?
3. What should be the appropriate balance between domestic, regional, and international financing in the new architecture?
4. Is it feasible to replicate a multilateral investment model (such as Itaipú) within the health sector? In which specific areas?
5. How can local philanthropy (e.g., foundations that operate only within their own countries) be encouraged to invest regionally?
6. What model of national contributions to regional health funds would be equitable, considering the significant differences in economic capacity among countries?

Working Group 3: Efficiency, Procurement, and Emergencies

1. How can pre-approved financial instruments for emergencies be designed so they are ready for activation without negotiation?
2. How can the PAHO Revolving Fund be optimized to achieve real economies of scale without concentration among a few suppliers?
3. How can the transition be made from disease-specific financing to comprehensive health system strengthening?
4. What institutional mechanisms are needed to ensure that emergency funds are available and effectively coordinated during crises?
5. How can transaction costs and bureaucracy in accessing international financing be reduced?
6. What role could health bonds, portable regional insurance schemes, or other innovative financial instruments play?
7. What role should South–South cooperation play in financing, and how can it be formalized without replicating North–South structures?

Working Group 4: Private Sector, Equity, and Accountability

1. What regulatory frameworks are required to ensure effective and ethical participation of the private sector?
2. What specific incentives does the private sector need to invest in public health without creating conflicts of interest?
3. How can private capital be mobilized without compromising principles of equity and the right to health?
4. What accountability and transparency mechanisms should accompany new sources of financing to rebuild trust among donors and recipient countries?
5. How can graduation criteria be revised to account for the special vulnerabilities of SIDS, beyond GDP per capita?
6. How can financing be structured to prioritize equity without sacrificing efficiency?