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Hypercompetition in the Global Health Arena: Manage or Die

26.1.2017

Enric Grau, a non-profit management consultant with extensive experience in the global health sector, is the coordinator of the upcoming ISGlobal-UB course on Global Health Management (1-14 February)

Between 2000 and 2010, global health funding —through development assistance funding mechanisms— lived its “golden age”, increasing from USD 11 billion to USD 34 billion -an annual average increase of 11.4%. In 2015, global health funding reached USD 36.4 billion, showing a decrease of USD 1.4 billion from the historic peak in 2013 (USD 38 billion).

Between 2000 and 2010, global health funding —through development assistance funding mechanisms— lived its “golden age”

Although predictions are always hard to make, current priorities in the development assistance agenda, at least at the European level, suggest that constant and significant increases in global health financing are unlikely to occur again in the medium term. In fact, the increases in bilateral development assistance from many European countries in recent years have been strongly driven by the refugee crisis and the Syrian war and, moreover, many European governments are responding to the refugee crisis by using investments intended for overseas to cover ‘in-donor costs’ at home. In-donor refugee costs reached USD 13.9 billion in 2015, nearly doubling the amount that donors spent on health in Africa.

During the golden decade, international and local NGOs, foundations, international programmes or global initiatives flourished in Europe, spurred by easily and regularly available funds, coming from public, but also private donors. Organisations were used to receive stable funds and succeed in expanding operations to new regions or in addressing new challenges. Funds also helped many organisations mature and professionalize their governance and management structures. Sustained and high increases in global health funding also created confidence; to some extent, funding models for organisational business models were easy to implement due to the large variety of accessible sources of funding. At that time, although competition for funds among organisations always existed, fundraising was rewarding.

The picture today has changed significantly: the financial crisis severely impacted national budgets

The picture today has changed significantly: the financial crisis severely impacted national budgets, in many European countries grants and private donations have dropped, citizens stopped supporting social causes in developing countries, political and social priorities shifted and, as a result, funds for global health stagnated. For the last few years, Europe has been dealing with an unprecedented refugee and migrant crisis and the instability and political unrest in Northern Africa and the Middle East region are among the factors clearly conditioning the volume and the aims of development assistance funds.

Many global health organisations were not prepared to confront such sudden and intense changes. As funds have become more difficult to access, management teams have had to deal with downsizing structural costs ­–which easily escalate in boom times, but are extremely hard to reduce in times of scarcity– and the scope of programmes, or with strategically repositioning the organisation to better identify mission, added value or programme niches. In many cases, this has led to job losses in nonprofits, which are difficult to communicate to the public, to mergers of organizations or to rethinking organisational processes and tools.

Organisations need to be increasingly legitimate, accountable, transparent, sustainable and capable of showing the measurable impact of their actions

Above all, many global health organisations have been (and still are) on a quest for better efficacy and efficiency in order to secure their survival in a landscape that has evolved from fair competition to hypercompetition. In this context, organisations need to be increasingly legitimate, accountable (not only for money but also for results), transparent, sustainable and capable of showing the measurable impact of their actions. In short, the critical challenge for organisations and management teams nowadays is providing clear value for money in a crowded global health arena.