Financing of health services: A district perspective

1. Financing of health services:A district perspective Annual Health Forum BMICH 9-10th February 2007 Dr. Ravi P. Rannan-Eliya Institute for Health Policy http://www.ihp.lk/

2. Outline • Study TOR & Mandate • Approach & Scope • Challenges • Methods • Results • Implications • Policy • Future monitoring

3. Mandate and HPRA TOR • To record recurrent and capital investments for health by district • Measure relative donor contributions by district • Measure categories of recurrent spending by district • Selected districts: Colombo, Badulla, Matale Implicit goals • To assess feasibility and relevance, and to pilot monitoring of spending at district level

4. General Approach & Scope • Health accounts approach used to develop district estimates of financing flows and investments • Sri Lanka Health Accounts • Standardised profile of all national health expenditures • Provincial expenditure estimates already available • For AHF, methods developed to disaggregate further to district level, identifying new data sources where practical • Scope • Study scope extended to all districts • Data source • IHP SLHA Estimates - available for 1990-2005 • Meets latest international and national standards • Other extensions include costing by disease

5. Advantages of approach • IHP SLHA system already tracks expenditures on annual basis at provincial level (81% of total) • Existing system already maintained on annual basis • Needed only modifications to incorporate district tracking and reporting • Approach supports tracking in all districts with minimal additional effort • Provides systematic and standardised framework for profiling and categorising sources of financing, uses and providers of cares • Provides consistent link to national spending estimates

6. Challenges in monitoring expenditures at district level • Provinces - not districts - are the budget holding entities in public sector & under Constitution • Accountability for budgets is at provincial level • Financial reporting systems not designed to track expenditures at district level, and district level FIS weak • Provincial accounting systems lack detail to enable tracking of functional categories • Donors • Most donors cannot easily report expenditures either at provincial or district level (exceptions - GFATM, WB, JICA) • Difficult to obtain cooperation/data from most donors • Private sector • Most survey data sources not reliable at district level • Generally not available on annual basis

7. Methods: Public sector • MoH • Recurrent and capital • Source: Treasury reports and data on expenditures - actual (to 2005) • Allocated to district/province by project • Medical supplies tracked to district using MSD records • Allocable: • By district - 59%

8. Methods: Public sector • Provincial Departments of Health (PDOHs) • Recurrent and capital • Sources: Provincial financial statements • Actuals only available to 2004 • Allocated to districts using PDOH reports • 5 out 9 provinces responded (WP, Uva, Sab, NCP, CP) • . . . otherwise based on analysis of levels of hospital infrastructure and population size • Not possible to analyze categories of spending at district level owing to lack of adequate data • Allocable: • By district - 89%

9. Methods: Donors • Recurrent and capital • Source: Survey of donors and analysis of project documents • Allocable: • By province/district - < 30%

10. Methods: Private sector • Private hospital investment • MOH-IHP Census of Private Hospitals 2006 • 80% response rate • Plantation companies • IHP Survey of Estate Hospitals 2006 • Other private spending • Central Bank and Census & Statistics Department Household Expenditure Surveys • IHP surveys of laboratories, ambulance companies, etc • Allocable: • By district - 97%

11. National context District focus Findings

12. National health spending trends IHP Sri Lanka Health Accounts 2006

13. How was health financed? IHP Sri Lanka Health Accounts 2006

14. What is being financed? IHP Sri Lanka Health Accounts 2006

15. Total health spending by district (2004)

16. Total health spending by source by district (2004)

17. MoH spending by district (2004)

18. Provincial DoH spending by district (2004)

19. Donor spending by district (2005)

20. Capital investment trends, 1990-2005 (Rs billion) IHP Sri Lanka Health Accounts 2006

21. Capital investment by district and source (2005) IHP Sri Lanka Health Accounts 2006

22. Issues • Current regional patterns • Must take into account all sources (MoH, Provinces, Private sector) • Large variations exist • Mostly due to capacity for private spending • Most significant is between Colombo and other districts • Likely lower overall spending in East and North due to lower private spending • Imbalances in MoH spending partially compensate for imbalances in PDoH budgets • Implications • MoH budget is most important tool for achieving equity in district spending • Private spending largest contributor to district inequality

23. Issues • Capital investment • Private sector investment mostly in Colombo, and significantly outweighing public investment • Should government policies continue to provide favoured tax status to BOI investments given its contribution to district inequalities?

24. Issues • Monitoring district spending in future • Are districts the best level to focus monitoring on? • Budget and expenditure data complete at provincial level, but mostly missing at district level • Accountability is at provinces and not districts • District financial reporting systems • Should provincial financial systems be improved? • Possible model to emulate • Malaysia’s MoH treasury reporting system, which tracks all MoH spending down to individual facility • Who should be responsible for action? • Malaysia is a federal state, but health is a central responsibility