To achieve Universal Health Coverage and the Sustainable Development Goals, at least 15% of total budget and 4-5% of gross domestic product (GDP) should be invested in healthcare in Bangladesh. However, the allocation for health sector has remained less than 1% of GDP for last couple of years. A significant amount of allocated budget remains unspent each year and returns to the Ministry of Finance (MOF). The health budget in Bangladesh has been riddled with the double-edged challenge of lower allocation and underutilization of the allocated budget over the years. This trend is heightening the precarity of people inducing higher out-of-pocket expenditure (OOP). According to the sixth Bangladesh National Health Accounts, people are paying over twothirds of their treatment costs from their pocket. The share of OOP in the country stands above 68%, which is higher than neighboring countries. Higher OOP on health is exacerbating the greater risk of incurring catastrophic health expenditure (CHE) and plunging people into poverty. This write-up briefly explores the key challenges of health budget in Bangladesh and proposes few ways out.
One of the main reasons of low health budget utilization rate is related to procurement related complications in health sector, which involves number of processes including timely preparation of annual work plan and annual procurement plan, as well as fast approval of the plans from higher authority. Health managers at different layers of the health sector lack adequate skills on procurement, audit, and public financial management since they are not primarily trained on these technical issues, which make them comparatively less efficient for proper planning and utilization of health budget. Besides, health managers often fear to spend the maximum budget due to procurement related complexities, and absence of risk protection system from the audit. The planning and budget from health facilities is an incremental one, where they increase 5-10% in all line items from their previous years’ budget. The centralized health financing system allows limited scope to local level health managers to adjust the budget if required.
The failure of prompt disbursement of allocated money from the MOF exacerbates the problem. Additionally, high health budget utilization rate does not necessarily indicate better access to and provision of high-quality health services. A reasonable and pragmatic approach on health budget does not merely focuses on optimum execution, but on areas of priorities, timely disbursement, and flexible financial management maintaining public procurement and finance rules.
To overcome the above challenges, first, adequate training of health managers on public procurement system, public financial management, audit, planning and budgeting is a must. Keeping record of trained health managers and ensuring their placement in befitting places is also required. Second, the issue of timely disbursement of allocated money should be addressed by moving away from the centralized system and giving sufficient flexibility to the MOHFW and local level health managers in the Delegation of Financial Power so that they can adjust budgets as needed. However, such flexibility requires a comprehensive mechanism that ensures accountability as well as provides risk protection provision in procurement. Third, strengthening governance to address political interference and irregularities in procurement should be prioritized.
