THREE DISEASES FUND OMITS PRIVATE SECTOR TREATMENT

UNCLAS SECTION 01 OF 02 RANGOON 000588

SIPDIS

SENSITIVE
SIPDIS

STATE FOR EAP/MLS;
PACOM FOR FPA

E.O. 12958: N/A
TAGS: ECON EAID TBIO PGOV BM
SUBJECT: THREE DISEASES FUND OMITS PRIVATE SECTOR TREATMENT
OF TB

REF: RANGOON 0419

RANGOON 00000588 001.2 OF 002



1. (SBU) Summary: Population Services International (PSI) did
not receive funding from the Three Diseases Fund (3DF) to
continue its effective TB treatment program in Burma. The
3DF instead chose to support the TB programs of the World
Health Organization and the Myanmar Medical Association
(MMA). The MMA, a local professional association, will use
the funds to refer patients to the public health sector,
while PSI's program would have treated 33,000 patients
through its chain of already successful private clinics over
a three year period. PSI representatives attribute the
decision primarily to a preference by Fund consultants to
build the capacity of the public sector. We should consider
adding funding for TB in Burma to show the viability of
private delivery. End summary.

PSI LOSES FUNDING
--------------


2. (U) On June 15, 2007, PSI Country Director John
Hetherington and Communications Manager Sam Conner briefed
Charge on the results of the 3DF's first round of funding for
TB. The 3DF was established by Australia, the EC, the
Netherlands, Norway, Sweden, and the UK to support activities
in Burma's national programs for malaria, TB and HIV/AIDS. A
board, made up of donor representatives and regional health
experts approved the first round of grants for projects to
begin in 2007 (reftel). The 3DF Board did not approve PSI's
$2 million, three-year TB proposal, which would have
continued treatment of TB patients through its network of
private health clinics. PSI estimated that 85% of the 33,000
low income patients it would treat if funded could die, and
each patient could infect up to ten additional people with
TB.


3. (SBU) Hetherington attributed the 3DF Board's decision
to a number of factors, including the incorrect perception
that PSI's clinics compete with government clinics, time
constraints that prevented the Board from a thorough analysis
of proposals, and the Board's assumption that PSI could
easily find other sources of funding. He also said that the
Board may have wanted to show support for at least one
government body, and therefore decided to award the money to
the MMA, to build its capacity in setting up a referral
service. Hetherington predicted that the 3DF would not meet
its goals of reducing TB morbidity, mortality and
transmission. The 3DF had originally committed to support
existing programs and has agreed to fund all of the other
existing TB programs, just not PSI.

RUSHED PROCESS LED TO UNINTENDED RESULTS
--------------


4. (SBU) Hetherington said he believed the rushed process was
the source for a number of unintended actions. One Board
member told him that they had only 24 hours to review and
approve all the proposals recommended by a panel. He told us
that a Board member privately admitted to him that the Board
mistakenly approved $450,000 less than it intended for PSI's
HIV/AIDS program, but could not take corrective action.
Hetherington acknowledged that PSI might receive funding in
March from the 3DF's 2008 round.


5. (SBU) The 2002-2003 Nationwide Drug Resistance Survey
showed 4% multi-drug resistant TB among new patients and
15.5% among previously-treated patients. More recent
information indicates that number has grown. The clinics

RANGOON 00000588 002 OF 002


supported by PSI in seven states and divisions handled 11% of
the 2005 TB caseload. Excluding drugs, PSI's cost is $40 per
patient treated, compared with the public health sector's
$117. PSI's TB funding will end in March 2008. Hetherington
predicted that existing donors will put all their funding
into the 3DF, and cease all direct bilateral support of INGOs
for malaria, TB and HIV/AIDS projects. The U.S. is currently
the only donor that funds a PSI health project - in HIV/AIDS
- outside of the 3DF.


6. (SBU) Comment: 3DF's start-up delays and decision making
process have been, as one UN rep admitted, "messy." The
donors wanted to get projects going on the ground as quickly
as possible and planned to iron out difficulties as they
arose. The Board's decision not to fund PSI may have been a
conscious effort to build capacity in the public health
sector, which is the preferred practice of 3DF donors. PSI
has proven its network of private clinics can effectively
deliver quality health care to those most in need. The
United States already supports PSI's HIV/AIDS projects. Post
has repeatedly requested additional funding for TB and
malaria. Our funds could support already proven projects
that demonstrate the effectiveness of humanitarian assistance
delivered by private providers, as opposed to Burmese
government entities being supported by other donors. End
comment.
VILLAROSA