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We Need to Invest $2.5 Billion Per Year in Digital Health for LMICs

By Guest Writer on December 6, 2022

digital health funding

The world’s health systems are changing rapidly, driven by the introduction of digital technologies, artificial intelligence, and the use of large data sets. The digital transformation has the potential to expand access to health care and accelerate progress towards the Sustainable Development Goal target of reaching universal health coverage by 2030.

We have reached a stage in the digital health journey where we need to think beyond enhancing health systems through the introduction of individual digital technologies and to instead consider the digital transformation of health systems in its broader sense. We need to remove the underlying obstacles and challenges to sustainability and scale. We need to focus on the actions and the investments that are necessary to drive a more equitable, inclusive, and sustainable transformation of health systems in low- and lower-middle-income countries.

The new report, More and Better Funding for the Digital Transformation of Health provides an evidence-based approach to prioritise investment areas and define the level of investment necessary to support the financing of digital health transformation.

$2.5 Billion Annual Digital Health Investment

Countries must develop costed strategies to guide the digital transformation of their health system and governments must be in the driver’s seat of this complex, fast-moving and challenging process, with other stakeholders aligning with and supporting their plans. This also includes promoting and expanding digital connectivity and digital literacy across societies; for health workers across all cadres, including community health workers; and also, for patients, policy-makers and all people who will interact with a digitalised health system.

Little information exists about the financial resource requirements or how funding should be invested and in what sequence to achieve a successful digital transformation of health systems. In this Conceptual Framework, we have identified and costed nine priority digital health investment areas, selected on the basis of input from more than 350 global stakeholders.

  1. Digital connectivity infrastructure to connect every health worker and health facility
  2. Financing and financial management
  3. Health worker management and decision support
  4. Information systems and data exchange and interoperability
  5. Data and digital governance policy, governance and research
  6. Enterprise architecture, including governance, guidelines and standards for interoperability
  7. Supply chain logistics and management
  8. Telemedicine service delivery
  9. Client identification and registration

We have also identified other areas that will require greater investment to ensure that the enabling environment will facilitate the digital transformation in an equitable, inclusive and sustainable manner.

By modelling the estimated cost of these nine investment priorities in low- and lower-middle-income countries, we have come up with an indicative figure for resource needs for a digital transformation of health systems in those countries, including five-year cost projections for each area. Based on this modelling, we estimate that an investment of US$ 12.5 billion is needed for the nine priority investment areas in 78 low- and lower-middle-income countries over the next five years, or approximately US$ 2.5 billion per year on average.

Additional Digital Investments

Health infrastructure accounts for approximately 75% of the total projected investment. But this only includes health sector costs (health record digitisation, wide and local area networks within facilities and information and communication technology equipment needed at facilities) and not the general investment required to increase digital connectivity or usage among the population, which must also be prioritised.

Operational costs, which include ongoing expenses for maintenance, equipment replacement, refresher training, software licensing, project management and help-desk support and make up half of the total projected costs, are often not fully accounted for in current costing analyses and are absent from most data sources. They are included in this investment estimate.

The total projected cost represents approximately 1% of the annual government health spending of the group of low- and lower-middle-income countries. It is not unreasonable to assume that, on average, 60–70% of this amount can be met from national resources, with the remainder to be externally supported. While countries must take the lead in funding their health system, in many resource-constrained contexts, donor agencies, philanthropic organisations and the private sector are also critical.

The relatively modest scale of the needed funding should encourage more donors to reassess the potential of catalytic investments in the opportunities presented. To ensure that the digital transformation of health systems is funded and supported in the most effective manner, coordination and alignment of international investments are necessary.

The digitalisation of all aspects of life, including health, will progress relentlessly. But this progress must be led and guided by a clear and inclusive process if it is to lead to better health, greater inclusion, reduction of inequalities and closing the growing digital divide. Even modest additional investments during this period, if well directed, have the potential to build stronger and more resilient health systems.

A lightly edited executive summary of More and Better Funding for the Digital Transformation of Health

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