The Word Bank Study "Financing Health Services in Developing Countries: An Agenda for Reform" is centered on a thesis of decreased government responsibility for financing health services. The study points out that more basic medical services are needed for the poor, but the aged and increased urbanization are forcing the application of more finances into hospitalization services. The World Bank study incorrectly assumes that the above problem is due to an epidemiologic polarization of rich vs. poor and that the only benefits from curative medicine are private, not societal, benefits. The proposal stemming from these assumptions financially separates curative from preventative services, regardless of its proven costliness and inefficiency. The 4 suggested specific World Bank reforms are: 1) charging fees for the use of health services; 2) provision of insurance or other risk coverage; 3) effective use of nongovernment resources, i.e. private practices, midwives; and 4) decentralization of government health services. These are interesting, although imperfect, solutions to the pressing problem of health care finance. The largest issues may be problems from the fragmentation of health services, cost inflation, and lack of effective controls--issues that are not dealt with in the World Bank study.
A Health Sector Financing and Expenditure (HSFE) survey was conducted in Swaziland against a background of growing concern about resource constraints on policy implementation. It sought to provide basic financial information which could be used when discussing policy options for addressing these constraints. Under a wide definition of the health sector, expenditure in 1984/85 was found to be equivalent to 9.8% of GDP and E73 ($US35) per capita. Recurrent expenditure dominated sectoral expenditure, at 86.7% of the total; 57% of recurrent expenditure was for primary health care (PHC) activities, but only 17.9% for the core preventive programmes which the policy emphasizes. Moreover, the Ministry of Health's own expenditure was biased in favour of curative care. Out-of-pocket payments largely supported general PHC activities and the core programmes were predominantly funded by foreign aid. Policy calls for increased PHC funding, therefore, are justified on the grounds of existing inappropriate allocations. If this is to be achieved there must be improved efficiency of resource use within services and improved coordination with other sources of finance in the sector. It is especially important to address efficiency issues within the Ministry. Particular attention should be paid to strengthening the role and effectiveness of decentralized management structures in resource allocation. The Ministry should also address concerns about the quality of care provided by its services, especially the poor availability of drugs. Increased PHC funding may, further, be made possible through the recruitment of additional finance. More discussion of alternative financing arrangements is necessary, but their efficacy may be dependent on improving the quality of care provided within public facilities.
Abstract Rural development activities are frequently more important than isolated health care interventions in maximizing improvements in rural health status. In addition, integrated socio-economic development of rural areas ensures availability of local resources to finance health schemes, encourages community involvement in development and reforms and strengthens management capacity for health programme implementation and development. Public health services provide in turn an entry point for directly productive development activities. In designing, implementing and operating health components of rural development projects in developing countries, the most serious obstacles are almost invariably the following: (i) how to strengthen the managerial capacity of the health administration from the national to the local level and how to execute integrated programmes through decentralized and uncoordinated agencies; (ii) how to ensure adequate recurrent cost financing and contribution of beneficiaries to operating cost; and (iii) how to achieve active involvement of rural communities in decision-making and services delivery when projects are large and planned and executed by government authorities. In discussing these issues the paper will cite the World Bank’s experiences in a number of African, Asian and Latin American countries.