Watch the discussion here.

On February 25, Neha Agarwal, senior director of strategy at PATH and Alliance board vice chair, led a session for Stanford Mussallem Center for Biodesign’s Innovation and Health Equity Series. She discussed how outcomes-based financing (OBF) can be leveraged to tackle antimicrobial resistance (AMR), a commitment to action announced at the Clinton Global Initiative 2024 Annual Meeting by PATH in partnership with Pfizer, the Alliance, and the governments of Tanzania and Senegal. Her talk, which provided a first look at data from a year-long study, emphasized how innovative financing mechanisms could reshape global health strategies.

The Growing Threat of AMR

Agarwal highlighted the pressing challenge of AMR, which she called a “silent pandemic” responsible for 1.3 million deaths annually. She cited recent research predicting that this number could surge to 10 million per year by 2050 without intervention. “Unfortunately, we are not meeting any of our targets, and resistance patterns are actually increasing,” she said, referencing a Lancet Commission report released last year.

Current investments in AMR primarily focus broadly on stewardship and new research and development (R&D) of antibiotics. However, Agarwal warned that without addressing market dynamics that are governing the way antibiotics are used, “all of those billions of dollars going into new R&D efforts will also be rendered useless because they’ll be exposed to the same resistance pattern, the same human behavior, and the same market dynamics.”

 

A New Approach: Outcomes-Based Financing

Agarwal introduced OBF as a potential game-changer, shifting the focus to rewarding measurable outcomes, such as increased referrals, improved testing rates, and reduced overuse of antibiotics. 

“In the health space, we really have not done a good job of leveraging outcomes based financing as a tool,” she noted. “If we can augment—not replace—current stewardship efforts by addressing market and social pressures at key points along the patient cascade, we have an opportunity to improve referrals, enhance testing, and ultimately strengthen antibiotic dispensing practices. That’s our theory of change.”

Traditional funding models generally allocate money based on proposed activities and reported outputs, often without linking payment directly to the achievement of desired health outcomes. PATH’s model turns this on its head by using OBF, where funds are disbursed only after predetermined results are achieved, such as improved antibiotic prescribing practices. This OBF financial model not only ensures that money is spent effectively but also motivates healthcare providers to meet specific health outcomes. 

She outlined four key benefits of OBF:

• Encourages measurable results over process-driven funding.
• Aligns incentives with patient welfare.
• Provides flexibility, allowing clinicians to adapt interventions based on their local context.
• Enhances accountability to beneficiaries, ensuring that funding translates to tangible health improvements.

Furthermore, the initiative aligns with recent shifts in US foreign assistance, which increasingly favors outcomes-based approaches over traditional grant aid. This shift reflects a broader trend towards accountability and efficiency in global health funding—a crucial development as traditional funding sources become more constrained.

 

Key Findings from Research in Tanzania and Senegal

The research — conducted in Tanzania and Senegal by PATH in partnership with Healthy Brains Global Initiative (HBGI) — sought to identify the behavioral and market factors contributing to antibiotic misuse. Among the findings:

• 41% of pharmacists overall believed dispensing antibiotics without a prescription is acceptable, with higher rates in Senegal (67%) than in Tanzania (27%).
• 40% of clinicians in Tanzania reported patients asking for antibiotics when they did not meet the criteria.
• Patient demand is significant: 30% of patients visited a clinician expecting medication, but most were unfamiliar with antibiotic risks.
• Cost and wait times are significant deterrents to referrals: Over 75% of patients cited these factors as barriers to seeing a clinician.
• Clinician pressure varies: In Tanzania, one-third of clinicians felt pressured to prescribe antibiotics, while in Senegal, adherence to guidelines was stronger.

Three key intervention points for OBF in Tanzania and Senegal:

• At pharmacies – Incentivizing referrals instead of direct dispensing.
• At the clinician level – Encouraging adherence to proper prescribing guidelines.
• At the patient level – Addressing cost and wait-time barriers to encourage proper clinical pathways.

Looking Ahead: Designing and Implementing an OBF Mechanism

In Tanzania and Senegal, PATH, the ministries of health, and initial partners are beginning to explore how to best implement this model in urban centers where AMR rates are notably high. 

“We are hosting in-country workshops to ensure that those on the ground shape the solutions,” she said, emphasizing the importance of co-designing interventions with local stakeholders. “They’ll go through an exercise where they will map all the interventions that they’ve brainstormed together as a group. The project team will then work with our consultants to take those as our starting point for the things that we can design around.”

The team then aims to continue with the subsequent design and pilot implementation phases. The plan is to have a finalized OBF model by mid-2025, followed by seeking approval and buy-off by Tanzania and Senegal’s ministries of health.

Agarwal highlighted long-term sustainability as a key focus, with funding models for the interventions remaining a critical discussion amongst the team. One option being considered is a phased approach with different funding tiers, where donor funding initially covers OBF initiatives, transitioning to increasing government ownership over time. “We’re looking to figure out what variables are important for us to test and what we can lock down, particularly on the funding side,” Agarwal shared.

Success in Dar es Salaam and Dakar could lead to wider adoption in similar urban settings across LMICs, where the misuse of antibiotics is prevalent and the standard regulatory and educational interventions have struggled to make an impact.

She also called for greater collaboration between the public and private sectors. “There is a lack of integration between the public and private sectors, especially in low- and middle-income countries, and they really operate in their own silos,” she said. “We need to create systems that are patient-centric and address cultural access issues and the market incentives that govern our behavior.” 

PATH is currently seeking investments to continue the initiative and demonstrate how OBF can dramatically help improve AMR stewardship and offer a potentially sustainable solution to one of our most persistent public health challenges.