Ahmed, Jamil

Shaikh, Babar T

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eCommons@AKUCommunity Health Sciences Department of Community Health SciencesJune 2008An all time low budget for healthcare in PakistanJamil AhmedAga Khan UniversityBabar T ShaikhAga Khan UniversityFollow this and additional works at: http://ecommons.aku.edu/pakistan_fhs_mc_chs_chsPart of the Health and Medical Administration CommonsRecommended CitationAhmed, J., Shaikh, B. (2008). An all time low budget for healthcare in Pakistan. Journal of the College of Physicians and SurgeonsPakistan, 18(6), 388-91.Available at: http://ecommons.aku.edu/pakistan_fhs_mc_chs_chs/6388 Journal of the College of Physicians and Surgeons Pakistan  2008, Vol. 18 (6): 388-391INTRODUCTIONThe healthcare systems in most of the world employscientific mechanisms for financing and funding theexpenses incurred on the health of the people. Adepartment for health in the government formallymanages this system. In Pakistan, the budget allocationis federally administered and more than half is drawnfrom the broad indirect taxes. It is distributed to theprovinces according to the need but usually it is on anincremental pattern. There is complete lack of propermapping mechanism of healthcare financing schemes.The health budget is devised at the federal level basedon collection and generation for hierarchal distribution ofthe money to the provinces. The national, provincialsand local governments are engaged in planning andfinal implementation of the budget.Health budgeting: a global scenarioThe World Health Organization (WHO) recommendsand encourages the member states that all countriesshould spend at least 5% of their GDP on health in orderto meet the targets set by the nations.1 This is achievedby most of the developed countries, for example morethan 8% of the GDP spent by the OECD countries onhealth is a remarkable milestone that these countrieshave surpassed.However, this remains to be a dream far from comingtrue for most of the developing nations of the world.More importantly, the African and south Asian countries,which contribute a major share of global burden ofdisease and disability, are lagging behind in this areabecause they spend less than 5% of their GDP onhealth.2The many success stories of the health systems in manycountries lie in the commitment of the governments ofthese countries towards achievement of targets inhealth. The reforms brought are the results of the prioritygiven to health by these nations. For instance, it was thebasic governmental priority that the health of the nationsshould not suffer at the time of serious financial crisis.Cuba is one such example which suffered in the 90’sdue to downfall of the socialist bloc following theimpositions of American embargoes. Cuban govern-ment sustained the health reforms and reduced themilitary budget, spending around 7% of its GDP onhealth during that time. As a result their maternal andchild health is as good as of any OECD countries.3Another excellent example for tax and spendphenomenon in National Health Services is that of theUnited Kingdom. The money collected through taxationis spent on health on the basis of need with great checksand balances. A significant feature of this system is asmall expenditure of about 4% on medical technologycompared to the 6% average expenditure of Europe in2002.4Egypt, one of the lower middle-income Muslim countriesthat give priority to health of its population has beensomehow consolidated during the later regimes. Egyptspends 5% of its GDP on health, which is still lower thanthat spent by OECD countries. The major source offinancing in Egyptian healthcare is private sector withabout 70% expenses borne through corporate healthsector with government sector contributing only 29%.However, their efforts are towards the universal healthcoverage. In the year 2000, the African countriesincluding Egypt, through Abuja Declaration, committedthemselves to increasing health expenditure to 15% ofDepartment of Community Health Sciences, The Aga KhanUniversity Hospital, Karachi.Correspondence: Dr. Jamil Ahmed, R-40, Shanti Nagar,Gulshan-e-Iqbal, Block-19, Karachi.E-mail: jamil.ahmed@aku.eduReceived  March 15, 2008; accepted  April 23, 2008.An All Time Low Budget for Healthcare in Pakistan  Jamil Ahmed and Babar T. Shaikh   COMMENTARYFigure 1:  Comparison of health expenditure trend of some OECD countries.Organization for Economic Cooperation and Development Data 2002.14121086420BelgiumFranceNew ZealandSwitzerlandUSANetherlands% of GDPGDP by 2015.5 Finally, the neighbouring countries likeSri Lanka and Bangladesh have great achievements totheir name. Sri Lanka has some of the best healthindicators in South Asia. These are due to theircommitment and priority towards health. They also spendaround 4.3% (2004) of their GDP on their health.6,7Issues beyond budgetary allocationsBesides a low budget health sector suffer many otherwoes in many developing countries such as corruption,inefficiency, lack of regularization and inequitabledistribution and collection of scarce resources. Morethan 80% of world population suffers from over 90% oftotal burden of diseases. This huge population dependson just 11% of total health expenditure, a disparity andinequity mentioned in the world development report bythe World Bank last year.8 Apart from fairness infinancing the institutions lack considerably. The expenditure outweigh the originally allocatedleading to implications on these programs. As a resultthe health budgeting becomes segmented and partiallyfunded.9History and trend of health budget in PakistanIn case of Pakistan, traditionally, we spent lowest ondevelopment in general and health and education inparticular.10 A large sum of the budget is being spent onthe curative care and hospital cost in a scenario whereone-third of the population in Pakistan lives below thepoverty line (US$1) and the health facilities remainwidely inaccessible to the masses. Also, Pakistan hasover 98% of the out-of-pocket health expenditure, whenover 75% visit private sector for healthcare.11,12 Nationalpublic expenditure on health is $4 per capita, while totalexpenditure on health is $18 per capita. This reflects thehigh share of private healthcare spending (75.6%).Social health insurance covers only 5% of thepopulation but represents about 40% of federal andprovincial governments spending on health.13Pakistan spends 80% of its meager health budget ontertiary care services, utilized by only 15% of thepopulation and 15% on primary healthcare services,used by 80% of the population.14 An increase in thehealth sector budget by 10.8% was announced incurrent fiscal year (2007-08) (4.728 - 5.240 billionrupees). Again more than 90% of this will be spent onthe hospitals and personnel expenditure whereby onlyRs 318 million was earmarked for public health services,as against the current increase of 10.8% Rs 3.984 -4.759 billion.15 The health sector had received a 14.5%increase in allocations for the year 2006-2007.  With agovernmental expenditure of around 0.5% of the GDPon health, this is considerably complemented by theprivate sector contributions, which boosts it to a total of3.5%.  So the country relies heavily on the private sectorwithout the pocket mode of payments for services.Moreover, the donor agencies have been contributing,at times considerable and at times negligible thuscompromising the sustainability of the programs.16 Mostof their programs have been focused on a specificdisease, natural disaster and hunger.17The health budget has always been low and stagnant. Ithas remained around less than 0.6% during the pastfiscal years.18 Reliance of the country’s healthcare onforeign funding and a stagnant internal health budgetshows a gloomy picture of the healthcare expenditure.The overall deficiency in the health budget over theseyears has been tried to overcome through externalfunding. The increment in health budget and the properutilization of the money is required.Successive governments regardless of the increase inthe inflation as well as the rising population growth rate,always claim increase in the health budget. Corruptmanagement and inefficiency in the utilization of moneyare the two major reasons that have always beenignored at the level of policy-making. The differentdimensions and modes of corruption that have engulfedthe health sector remain a great challenge to thetransparent and efficient delivery of healthcare to thegrassroot level. It is observed that the trickle downconcept of funds does not hold truth due tooverwhelming corruption in healthcare.19 Pakistan,presents an overall gloomy picture of the health sectorbudgeting where no priority to health is demonstrated orreflected in the policies and where no additional fundshave been diverted to give a boost to health sector. Lateand insufficient release of funds to the provinces resultin delayed release of funds to the districts andeventually late to the hospitals and healthcarefacilities.20 We face the challenge of a double burdenof diseases; constituting infections and nutritionaldisorders and huge challenge of chronic diseasesassociated with poverty and ageing.21Health system consequences of the currentbudgeting policiesThe inadequacy in health sector budgeting reflects itselfin the health and well-being of the populations. Majorityof our population does not utilize the public sector healthfacilities, which is though free, but unfortunately of poorquality and unreliable. As a result of the insufficiency ofthe public sector to give adequate, timely as well asappropriate health relief to the poor, people tend toutilize private health sector far more. The vicious cycleof ill health and poverty becomes further aggravated dueto poor budgeting and financing of health sector. As aresult, 73.6% people living below poverty line (US$2)are deprived of their fundamental rights of quality andaccessible healthcare.22 The impact on the overallindicators is huge as a result of this low investment inhealth. According to the current demographic and healthstatistics in Pakistan, most of the indicators have notJournal of the College of Physicians and Surgeons Pakistan  2008, Vol. 18 (6): 388-391 389An all time low budget for healthcare in Pakistanimproved significantly over the past few years. Totalfertility rate increased from 3.9 to 4.1% in 3 years period,whereas the contraceptive prevalence rate hasremained remarkably stagnant (32% in 2003 and 30% in2006). Infant mortality rate in Pakistan is one of thehighest in south Asia (77 per 1000 live births indemographic and health survey of 2005 and 78 per1000 live births in 2006.23Conclusion and recommendationsFor the provision of efficient and timely healthcare toeveryone, the policy makers will need to understand theneeds of the people and their ability to pay for thehealthcare. Various methods of financing can beused for our population. Social health insurance andcommunity health insurance are some of the optionswhich can be applied to the segments of the populationwho are able to pay for their health. For those who areunable to access the healthcare, due to their meagerincomes, safety needs be provided so that they can alsoavail healthcare without losing their sources oflivelihoods. The universal coverage can be achieved ina manner that all of the users pay according to theirability to pay. The reforms in the health system require sincereinvolvement of policy-makers, who need to decide onthe basis of scientific evidence. We can learn fromregional success stories. For instance, the introductionof 30 Baht scheme (every one contributes just 30 ThaiBaths @ 0.94 US$ for a hospital visit) of Thailand’shealth system is a great success and has claimed manybenefits with regard to universal coverage.24 Public-private partnership as well as contracting out, in someinstances, has also helped many countries to reformtheir health systems in the right direction.25 However,the basic basket of services must remain theresponsibility of the state. In view of the developeddistrict health system in Pakistan, the decentralizedprograms can be designed with better technical andallocating efficiency ensuring local institutional capacitybuilding.26 Thus       this district health system representsyet another    opportunity for attaining three basic goals,which              are indispensable for any health system:health improvement, responsiveness to expectationsand fairness in financial distribution.29Priority areas need to be identified first at the time ofbudgeting. Transparency and rationality behindinvestments in health sector is altogether missing.Capital investment in buildings and equipment ispolitically driven and there is too little priority to ensuresupplies and other inputs at provincial and district level.Weak accountability and poor governance compoundthe problem even more.  The promises that the politicalleadership makes with the people for gaining powermust be kept and commitments in this regard fulfilled soas to create confidence among people. Finally, it isimperative that the all quarters concerned with thefinancing mechanism sitting at the higher echelons ofpower develop into transparent as well self-regulatingauthorities to overcome the flaws in the system. Thoughit is critical to look for increased resources for healthsystems in order to improve the health of the nation butwe must also strive to make efficient and intelligentutilization of the available scarce funds. REFERENCES1. World Health Organization. World health report 2000. Healthsystems: improving performance. Geneva: WHO; 2000.p.73-90.2. Cassels A, Janovsky K. Better health in developing countries:are sector-wise approaches the way of the future? Lancet 1998;352:1777-9.3. Aitsiselmi A. An analysis of the Cuban health system. PublicHealth 2004; 118: 599-601.4. Ashraf H. UK’s budget commits to rebuild national healthService. Lancet 2002; 359:1496-7.5. Parkhurst JO, Penn-Kekana L, Blaauw D, Balabanova D,Danishevski K, Rahman SA, et al. Health systems factorsinfluencing maternal health services: a four-country comparison.Health Policy 2005; 73:127-38.6. Garg C. Health basket for developing countries: issues andchallenges. In: Health Systems Financing (WHO/HSS/HSF)‘Better Financing for Better Health’, Paris: 2007.390 Journal of the College of Physicians and Surgeons Pakistan  2008, Vol. 18 (6): 388-391Jamil Ahmed and Babar T. ShaikhFigure 2:  Trend of health budget for the past eight fiscal years. EconomicSurvey of Pakistan 2006-2007.Table I: Health expenditure in Pakistan (Rs. million).Year Total (millions) % of External resources for health(Rs.) GDP (% of total expenditureon health)2000-01 24,281 0.58 0.902001-02 25,405 0.57 1.402002-03 28,814 0.59 1.802003-04 32,805 0.58 2.202004-05 38,000 0.57 2.502005-06 40,000 0.51 1.12006-07 50,000 0.57 3.0(Source: World Development Indicators, World Bank 2006-07, Economic Survey of Pakistan2006-7, Public Sector Development Programme 2006-2008).0.60.580.560.540.520.50.480.461999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07PercentageFiscal YearJournal of the College of Physicians and Surgeons Pakistan  2008, Vol. 18 (6): 388-391 391An all time low budget for healthcare in Pakistan7. World Health Organization. Sri Lanka. [cited 2008 Mar 6].Available from: http://www.who.int/countries/lka/en/ 8. World Bank. World development report 2007.  Development andthe next generation. Washington DC: World Bank; C 2006.p.292-3.9. Holst J, Brand up-Lukanow A, (edi). Extending social protectionin health: developing countries’ experiences, lessons learnt andrecommendations. International conference on Social HealthInsurance in Developing countries, Berlin, 05-07 December2005; World Health Organization, Deutsche Gesellschaft fürTechnische Zusammenarbeit (GTZ), International LabourOrganization. Eschborn, Germany: GTZ; C 2007.p.22.10. Mohammad KB, Hafeez A, Nishter S. Public sector healthfinancing in Pakistan: a retrospective study. J Pak Med Assoc 2007;57: 311-6.11. World Health Organization. World Health Report 2006. Workingtogether for health. Geneva: WHO; 2006.p.182.12. Nishtar S. The gateway paper - financing health in Pakistan andits linkage with health reforms. J Pak Med Assoc 2006; 56(12 Suppl 4):S25-42.13. Asian Development Bank. Technical assistance to the IslamicRepublic of Pakistan for the developing social health insuranceproject. Islamabad: Asian Development Bank; 2005.p.2.(Report No. TAR: PAK 37359).14. World Bank. Pakistan-towards a health sector strategy.Washington: Health, Nutrition and Population Unit, South AsiaRegion; 1998. (Report No. 16695-PAK).15. Government of Pakistan, Ministry of Planning at Development.Public sector development program 2007-08. Islamabad: Ministryof Planning and Development; 2007.16. Shaikh BT, Kadir MM, Hatcher J. Health care and public healthin South Asia. Public Health 2006; 120:142-4.17. Evans DB, Tandon A, Murray CJ, Lauer JA. Comparativeefficiency of national health systems: cross national econometricanalysis. BMJ 2001; 323:307-10.18. Government of Pakistan, Ministry of Finance. Economic Surveyof Pakistan 2006-07. Islamabad: Ministry of Finance; 2007.p.178.19. Glenngard AH, Maina TM. Reversing the trend of weak policyimplementation in the Kenyan health sector? - A study of budgetallocation and spending of health resources versus set priorities.Health Res Policy Syst 2007; 5: 3.20. Pappas G, Akhtar T, Gregen PJ, Hadden WC, Khan AQ. Healthstatus of the Pakistani population: a health profile and comparisonwith the United States. Am J Public Health 2001; 91: 93-8.21. Pakistan Medical Research Council. National Health Survey ofPakistan. Health profile of people of Pakistan 1990-94.Islamabad; Network Publication Service; 1998.p.181.22. United Nations Development Program. Human developmentreport 2007/2008. Fighting climate change: human solidarity ina divided world. New York: UNDP; 2007.p. 239.23. National Institute of Population Studies. Pakistan demographicand health survey 2006-07. Islamabad: NIPS; 2007.p.25.24. Towse A, Mills A, Tangcharoensathien V. Learning fromThailand's health reforms. BMJ 2004; 328:103-5.25. England R. Contracting and performance management in thehealth sector: some pointers on how-to-do-it. London:Department for International Development (DFID), DFID HealthSystems Resource Centre; 2000.p.18.26. Shaikh BT, Rabbani F. The district health system: a challengethat remains. East Mediterr Health J 2004; 10:208-14.27. Shaikh BT, Kadir MM, Pappas G. Thirty years of Alma Atapledges: is devolution in Pakistan an opportunity for rekindlingprimary health care? J Pak Med Assoc 2007; 57:259-61.l l l l lOl l l l l

An all time low budget for healthcare in Pakistan

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An all time low budget for healthcare in Pakistan

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