Topic 07
Financing PHC Services for Nurturing Care
Strengthening Primary Health Care
to Promote Optimal Child Development
Ensuring adequate financing for PHC is crucial for achieving equitable advancements in health outcomes. Resources for interventions that promote nurturing care come from three main sources: domestic public revenue, private households and firms, and donor financing.
In most LMICs, domestic financing has been inadequate to cover PHC services for young children and their families. Government spending has fallen significantly below the minimum requirement for providing a basic package of health services, leaving households to play a substantial role in financing PHC through out-of-pocket payments, which are highly regressive and can result in inequitable access to care.
LMICs also rely heavily on donor financing for PHC. While external funds can complement domestic resources, donor financing presents challenges related to unpredictability, unsustainability, and increased burdens of reporting and accountability. Donor funding also tends to prioritize individual diseases, leading to fragmentation in financing arrangements and PHC service delivery — particularly when externally funded programs operate independently of government planning and budgeting processes. Furthermore, the current PHC financing landscape has been characterized by significant reductions in development assistance, increasing fiscal pressure on governments to fill the gap.
The transition toward more integrated and sustainable financing for PHC services that promote nurturing care will vary significantly based on country context, fiscal constraints, competing budget priorities, public financing capabilities, feasibility considerations, and levels of decentralization. PHC decision-makers may consider leveraging scarce resources to support interventions that nurture children’s optimal development, which can potentially improve PHC service quality and utilization and reduce the costs of care in the future.
Enabling factors to strengthen financing for health services that promote nurturing care.
1. Decision-makers have access to robust data on costs and cost effectiveness.
Data on the costs and cost-effectiveness of interventions that promote nurturing care is essential for increasing funding. While many countries have developed national early childhood development policies and implementation plans, many of these plans still need to be costed to determine the resources necessary and feasibility.
To support this, most countries still need country-level evidence on the cost-effectiveness of interventions that promote nurturing care, particularly in terms of long-term economic impact. Without such evidence, making a compelling investment case to decision-makers at the national and sub-national levels is difficult.
Strong monitoring systems are essential for tracking investments in nurturing care. This is particularly important because the PHC financing landscape is fragmented and government budgets are often not structured to clearly identify, track, and manage resources for interventions that promote nurturing care. By generating timely and reliable data on spending, service delivery, and child development outcomes, monitoring systems can inform policy decisions, support accountability, identify gaps, and guide resources toward underserved populations and areas.
2. Decision-makers explore varied resource mobilization strategies.
Given that PHC services are under-resourced, domestic stakeholders, private actors, and external donors are increasingly exploring new sources of financing for interventions that promote nurturing care. One potential avenue is to include nurturing care health services as reimbursable services within health insurance benefit packages (see the case study on Kenya’s experience below).
In addition to government budgets and external assistance, strategies may include innovative sources of finance (such as lottery, payroll tax, and corporate social responsibility) and innovative financing mechanisms (such as development impact bonds, results-based financing, block grants, and public-private partnerships).
While innovative funding can jump-start investments, address immediate funding gaps, and enhance service delivery, governments should complement them with other resource mobilization efforts to ensure sustainability.
3. Donors increase funding for nurturing care and better coordinate with one another.
A growing number of countries have introduced national policies and plans to support young children’s health and development, but implementation has been hindered, in part, due to chronically insufficient domestic financing. Donor funds can help introduce programming that supports nurturing care within PHC in the short-term, but health care decision-makers should seek to fully incorporate PHC services that promote nurturing care into existing health financing plans in the medium and long-term.
There is also a need for greater coordination around financing between donors, national governments, and key ministries. In many LMICs, the financing landscape for services that promote nurturing care is fragmented, with several donors and financing approaches existing within a single country. While donor funding is crucial, the fragmented and often uncoordinated nature of financing arrangements makes it difficult to effectively oversee, coordinate, and track resources for nurturing care. The situation is further exacerbated when donor financing is off-budget, as governments lack a comprehensive view of resources committed and disbursed, which can result in duplication of efforts, fragmentation in service delivery, and inefficiencies in resource allocation.
Examples of specific actions that PHC decision-makers can take to realize these conditions include:
- Partnering with research institutions to collect and analyze data on costs and cost-effectiveness of strengthening PHC services to promote optimal child development.
- Implementing budget tagging to track and monitor spending on services that promote optimal child development.
- Mobilizing additional financing via innovative finance mechanisms such as impact bonds.
- Transitioning from disjointed, off-budget donor funding to funding that is coordinated and aligned with health policies and domestic public expenditure.
Case Study: Building sustainable financing for promoting optimal child development in PHC — Lessons from Kenya
Read the case study
Kenya’s health system offers a compelling model for sustainable PHC financing. Recent reforms — including the Social Health Insurance Act and the Facility Improvement Fund — have expanded financing mechanisms available at both national and county levels. Notably, community health services that promote optimal child development, such as developmental milestone screening, ANC and PNC visits, and growth monitoring, are now included in the public insurance benefits package, . By including these services in the package, the government creates a direct financial incentive for their delivery at the community level . At the county level, the Facility Improvement Fund gives health facilities direct financing autonomy, allowing them to allocate resources according to local priorities, including child development interventions.
Despite these advances, a significant financing gap remains: while the government has pledged KES 400 million toward the benefits package, the estimated annual resource requirement is KES 4.85 billion, underscoring the continued need for domestic resource mobilization and development partner engagement.
Kenya’s experience points to a few key lessons: health financing reforms are most effective for promoting nurturing care when they explicitly include child development services; facility-level financing autonomy can unlock locally driven solutions; and closing financing gaps requires coordinated action across government and development partners.
To learn more about Kenya’s experience and lessons for other countries, visit the full toolkit PDF.
The following additional resources can be found via the links below, or by downloading the full toolkit PDF:
- Resource 6 includes a table with the full list of enabling factors and corresponding actions for Sustainable Financing.
- Resource 7 includes reflection questions to support discussion and planning related to Sustainable Financing.
- Resource 8 features tools to support the costing of interventions that promote nurturing care.
