STATUS REPORT ON MACROECONOMICS AND HEALTH NEPAL

STATUS REPORT ON MACROECONOMICS AND HEALTH NEPAL

1. Introduction: Nepal has made a significant progress in health sector in terms of its geographical coverage by establishing at least one health care facility in each Village Development Committee (VDC) in the country. The training institutions from the lowest level of health care worker (Auxiliary Health Worker and Assistant Nurse Midwife) to medical graduates have grown tremendously in the last about 10 years. This has gradually increased the availability of health workers also in rural health facilities. However there is still an urgent need for improving the overall health care coverage as well as the quality of health care provision. Wide gaps exist in different areas of the country with very different morbidity and mortality trends. The public expenditure on health as percent of GDP has been increased from 1.2 in 1996 to 2.2 in 2003 and as percent of national budget public health expenditure has slightly decreased from 6.5% in 1999 to 6.0% and 6.2% respectively in 2000/01 and 2001/02. Such expenditure included nearly 41% in salary during 2001/02. Table 1. Major areas of expenditure in health. Expenditure type 1999/2000 2000/2001 2001/2002 Rupees % Rupees % Rupees % million million million 1,364 31.7 1,757 36.5 2,064 40.6 Salary (Wage) Non-wage 1,496 34.7 1,695 35.2 1,695 33.3 Recurrent 2,860 66.4 3,451 71.7 3,759 73.9 Capital cost 1,446 33.6 1,364 28.3 1,328 26.1 Total 4,306 100 4,815 100 5,087 100 Source: Public Expenditure Review of Health Sector, Ministry of Health, July 2003 The trend in fund allocation in the health sector has slightly decreased as compared to that in other sectors. The allocation has particularly increased in education and drinking water. Other health-related Ministries, like Education, Finance, Home Affairs, as well as the Ministry of Defense also spend money on health. There has been a clear increase in investment on health by the Ministry of Defense in the last three years (1.8%, 1.8% and 2.3 %). It is also noticeable that the External Development Partners have significantly changed their support mechanism from indirect provision of funds (through the Ministry of Finance Red Book mechanism) to direct provision for program implementation, including to programs by NGOs or private organizations. The percentage of this mode of funding rose from 56% in 1999 to 90% in 2001-2002. The investment in health has tremendously increased in the last about ten years, from 2.1 to 5.2% of the over all budget of the Government. The only problem in this trend is that it has been disturbed much in the last few years due to the insurgency movement in the country. However there has always been an effort to invest more in rural areas of the country, compared to urban areas.

Table 2. Public expenditure in health by rural and urban areas Areas Year 1999/2000 2000/2001 2001/2002 Rupees % Rupees % Rupees % Rural 2,576 59.8 2,522 52.4 2,577 50.7 Rural/Urban 737 17.1 1,051 21.8 929 18.3 Urban 993 59.8 1,242 25.8 1,581 31.1 Total 4,306 100 4,815 100 5,087 100 Source: Public Expenditure Review of Health Sector, Ministry of Health, July 2003 Table 3. Gender and age-wise use of Health Services in Public Hospitals (2001/2002) Sex / Age <1 year 1-4 year 5-14 15-19 20-49 50-69 70+ * Male 22.11 5.19 2.25 2.69 3.79 7.67 8.11 * Female 12.27 3.24 1.62 10.92 14.34 8.25 5.54 @ Male 22.11 5.19 2.25 2.69 3.79 7.67 8.11 @ Female 12.27 3.24 1.62 3.20 4.60 7.17 5.54 * Use per 1000 population @ Use per 1000 population without maternal conditions Source: Ministry of Health Yearbook 2001/2002 The essential health care coverage reaches about 70% of the population. There has been much reduction in important ill-health indicators like the infant mortality rate, the maternal mortality ratio and the underfive mortality rate in the last few years. Contraceptive coverage is 39.3%, and 16% of women attend the antenatal clinic at least four times during their pregnancy. The maternal, perinatal and nutritional conditions as well as infectious diseases cause almost 69% of the overall morbidity and 50% of the mortality. At the same time, the mortality due to non-communicable diseases is also increasing (42.1%). Though every effort is made to bridge the gap in providing services to the poor and the rich, to rural and urban areas and to the population living near and in remote areas of the country, in practice the mortality trend differs widely in different areas of the country. Table 4. Mortality by Area of Residence Areas of Residence Infant Mortality Rate Under 5 Mortality Rate Urban 60.4 93.6 Rural 100.2 147.0 Mountains 132.3 201.0 Hills 85.5 131.3 Terai (Plains) 104.3 147.3 Source: NDHS, 2001 Nepal is in a process of initiating a Social Health Insurance for employees under regular salary and a Community Health Insurance for all community people in the non-formal sector. This will be introduced in a step-wise manner, first on a trial basis. Results will be compared with the experiences of the Community Drug Programme, which has been tested in a number of districts for several years. These insurance schemes are expected to be a good alternative source of financing in health care services. The 2

Government will provide funds to include the poor into the schemes. As part of the National Health Account exercise, the Health Economics and Finance Unit under the Policy, Planning and International Cooperation Division in the Ministry of Health has already carried out number of studies. Some of these studies include: INGO/NGO survey; private company expenditure survey; private health providers survey; private health insurance survey; public health facility survey; and drug expenditure survey. The unit has been contributing technical assistance to the Planning Division in priority setting and allocating resources. Nepal is undertaking efforts to implement the recommendations made by the Commission on Macroeconomics and Health. But it is understood that the success will depend not only on the availability of funding, but to a high degree on the overall socio-economic and the political situation in the country. The Government of Nepal and its partners have recognized the need for political stability as well as for mobilizing domestic and external funds. It has opted for working through partnerships with External Development Partners and other stakeholders to achieve its health and development goals. The new Nepal Health Sector Strategy, an Agenda for Reform, has been developed to facilitate necessary processes under a coherent strategic framework in order to achieve the Millennium Development Goals (MDGs), and the health targets as outlined in the 10 th Plan of the Government. 2. Progress in MDGs: a. Recently, the National Planning Commission has published a Progress Report 2002 on MDGs, and it mentions a significant progress in the last ten years. However, while going through a long list of health indicators and the achievement in them, it may be little early to say that the progress in MDGs is smooth and well advanced. 3

Table 5. Achievement in Health Status and targets for different plan periods, As mentioned in Medium-Term Expenditure Framework (MTEF) document. Health Indicators Target for the period 9 th Plan 2002 MTEF 10 th Plan 2017 1 Availability of essential health care 70 70* 82 90 100 services 2 Percentage of health care facilities - 80 86 90 100 (HCFs) with selected essential drugs available 3 Percentage of HCFs with full staff - 60* 72 80 100 providing essential health services 4 Percentage of women attending ante-natal clinics four times during pregnancy 50 16 20 25 90 5 Percentage of women 15-44 years - 15 36 50 80 who received 2 doses of tetanus toxoid vaccine 6 Percentage of women who were 50 13 16 18 80 assisted by trained health workers in their deliveries 7 Percentage of family planning 36.6 39.3 45 47 70 contraception users 8 People 14-35 years using condom - - 25 35 80 for safe sex 9 Total fertility rate per couple 4.2 4.1 3.8 3.5 2.5 10 Crude birth rate per 1000 live 33.1 33.58-30.1 26.6 births 11 Neonatal death rate - 39 35 32 15 12 Infant mortality rate 61.5 64 50 45 34.4 13 Under-five mortality rate 102.3 91 85 72 62 14 Maternal mortality rate per 1000 539@ 415 340 300 250 live births 15 Crude death rate 9.6 9.96-7 6 16 Life expectancy at birth 59 59 65 68 69 17 Expenditure in health as % of total expenditure of the Government 6.1-6.5 6.5 8.0 * Annual Report of DHS, 2002 @ 1996 Nepal Demographic Health Survey 3. Resource gap to fulfill the MDGs: Nepal is committed to meet the MDG targets as set for 2015. However, the whole achievement depends not just on how much money is available, but also on the over all socio-economic and the political situation of the country, and at present not just one but all of them do not seem to be encouraging. An effort to overview some of the needs as part of meeting the MDGs is as presented below: 4

Table 6. Health Resources Gap in Million Rupees - Available and the Need to meet MDG targets Indicator/ Figure 2003-2005 2005-2007 2008-2012 2013-2015 Services in 2002 Budget* Outcome@ Budget Outcome Budget Outcome Budget Outcome Provision of effective HCS 70 8639. 8 80.8 11,762.1 88 16,240.3 95.5 14,400.1 100 Access to 3358.6 4793.2 5335.1 5028.5 health care services Increase efficiency 4800.5 6128.5 8654.3 Promotional 454.5 775 8628 560.3 Medicine kit 26.1 65.3 174.3 156.8 U5CMR 91 6845.9 80.8 11762.1 74 12666.6 64 76061 54 IMR 64 1929.2 55.5 3346.6 47 4035.1 39 2742.8 36.57 ARI 26.1 738.3 21.59 1174.4 18.59 851.9 11.08 317.7 6.57 CDD 32.2 542.3 25.72 924.8 21.39 1030 10.58 669 4.1 Nutrition 51 3217.8 47.5 5414.6 44 5576.3 25 2905 6.6 EPI Mobile ORC 15723 170.9 18835 310.4 21948 438.7 29729 329.9 35955 Expected additional support from Donors 247.2 456 734.4 641.3 MMR 415 7863.9 335 19899.2 315 38750.6 251 31320.9 213 Maternity 438.5 812.6 1348.9 1175.5 Service ANC 1 st Visit 49 252.8 53 448.4 57 593.1 67 437.8 75 ANC 4 th Visit 14.3 106.2 15.92 187.7 17 280.5 24.25 231.1 286 PNC 1 st Visit 20.6 79.4 34.31 176.4 43.45 475.1 66.29 506.5 80 Delivery 2084.2 3936.7 6453 5259.4 Service Services by 36.3 2070.3 51 3915.1 60.8 6441 85.3 5257.8 100 trained workers Service 9.1 13.9 25.46 21.5 36.37 11.9 63.64 154 80 Delivered by using SDK Maternal 5341.1 15149.9 30948.6 248859 Care Increase CPR 39 4471.4 41 13115.8 46 25813.1 57 20124.9 65 Increase PHC OR 15364 142.2 20115 257.3 28283 358.7 31203 263.8 35955 BEOC at 0.01 196.8 31 655.9 63 2295.2 141 2229.5 205 PHC CEOC at Hospital 0.01 125.4 9 417.3 18 1459.6 40 1417.7 59 TT Coverage 45.3 225.1 4752 390 49 624.4 80.88 549.7 97.1 Anemia 67.7 92.3 60.85 151.5 56.28 136.9 44.85 725 38 Additional support 87.7 161.8 260.5 227.5 expected from Donors Total 23349.8 43288.6 67657.6 53327.2 Needed Total 20694.1 38413.1 49187.7 32192.1 availability Total Gap (-) 2655.7 (-) 4875.5 (-) 18469.9 (-) 21135.1 * Budget estimated for the period @ Outcome expected at the end of the target period Source: Mr.K.D.Pant, NHEA 5

4. Progress of Macroeconomics and Health Efforts A National Commission on Sustainable Development was formed under the Chairmanship of Rt. Honorable Prime Minister with representation from most of the Ministries, National Planning Commission and representatives from the private sector. Subsequent to this, a Sub-Commission on Macroeconomics in Health was formed under the Chairmanship of the Honorable Health Minister and the Honorable Finance Minister and members are as follows: o Member of National Planning Commission responsible for health; o Member of National Planning Commission responsible for finance, commerce and industry o Secretary, Ministry of Finance; o Secretary, National Planning Commission; o Secretary, Ministry of Health (as member secretary of the sub commission); o A woman representative from NGO having significant contribution to macroeconomics and health ( Mrs. Meena Acharya); o Health economist (Dr. Badri Raj Pandey); o Chief of Policy, Planning and International Cooperation Division, Ministry of Health 5. Future Activities and Support During the first meeting of this Sub-Commission on Macroeconomics in Health (SCMH), a small working committee was formed consisting of three people, including one representative from the Ministry of Health, Ministry of Finance and Representative from the National Planning Commission. This committee was asked to suggest areas where activities or studies needed to be carried out to be helpful for the work of the SCMH. This committee, in consultation with a consultant form the Dutch Royal Tropical Institute (KIT), prepared the following list of issues to be addressed during the preparatory phase of the macroeconomics and health work: a. Support the assessment of the specific country situation to be done by KIT; b. Translation of WHO summary brochure of the CMH report into Nepali; c. A desk review of studies done relevant to Macroeconomics and Health; d. Prepare district health and poverty profiles; e. Study on poverty and health; f. Poverty-based resource allocation; g. A national advocacy meeting involving government officials, NGOs, external development partners and private organizations; h. A small scale workshop to write proposal for the planning phase. Development of a strategic framework, including an investment plan divided into appropriate phases with clear targets and milestones for scaling up essential health interventions, and for improving closeto-client services in the light of the CMH report will be undertaken during the planning phase and is likewise expected to be supported by KIT. 6. Expected Outcomes 1. To make the national mechanism for macroeconomics and health fully operational. 6

7. Summary 2. To identify critical gaps in collection and analysis of data and qualitative information, particularly those relating to the health status of the poor. 3. To assess the health system and health financing mechanisms within a macroeconomics and health framework 4. To develop synergies with other key health related sectors and also with external development partners. 5. To prepare for the planning phase. Nepal is making every effort to implement the recommendations made by the Commission on Macroeconomics and Health. But the whole achievement depends not just on how much money is available, but also on the over all socio-economic and the political situation of the country. Presently there is not much room for satisfaction. The Government is making its best by prioritizing health programmes so that they do not suffer from lack of funding. That has been helpful. But on the other hand, the country needs huge additional resources to meet the MDGs. The effort of Nepal Health Sector Reform, in close consultation with external development partners and all other stakeholders, has as one of its main aims to find such additional resources for the health programme. As soon it is completed, it will be clear where the country stands as far as achieving the MDGs and the recommendations of CMH. 7