WHO/SDE/CMH/04.10
Macroeconomics and Health Nepal
Situational analysis
Maria Paalman[1]
April 2004
World Health Organization
Table of contents
Acronyms
Executive summary
Introduction
Nepal Context
The Health Sector
Poverty and Health
External Development Partners
Macroeconomics and Health
Conclusion and recommendations
Macroeconomics and Health
Assignment
Nepal Context
Physical
Demographic
Administrative
Political
Economical
Social
Religion
Ethnic
Education
Poverty
Security
Government finance
The Health Sector
Ministry of Health
Policies, strategies and plans
National Health Policy 1991
Second Long Term Health Plan 1997-2017
Strategic Analysis to operationalise the SLTHP
WB study - Nepal: operational issues and prioritization of resources in the health sector
Medium Term Strategic Plan (MTSP)
Medium Term Expenditure Programme (MTEP)
Medium Term Expenditure Framework for Health (MTEF-H)
Objectives
Health Sector Strategy (HSS)
Tenth 5-year Development Plan
Nepal Health Sector Programme – Implementation Plan 2003-2007 (NHSP-IP)
PRSP and JSA
Conclusion on policies, strategies and plans
Provision of health services
Public health facilities
Utilisation
Human Resources
Devolution of health services
Private sector and NGOs
Implications of Maoist insurgency
Health financing
Public Expenditure Review
Budget for 2003/2004
National Health Accounts
Taxes
User fees
Insurance
Health Management Information System
Health indicators and targets
MDGs (HSS June 2002)
Tenth Plan
MDG Progress Report
Health Sector Strategy
Essential health interventions
Conclusion
Research
Capacity
Relationship poverty – ill health
External Development Partners
Multilateral and bi-lateral donors
International NGOs
National NGOs
Macroeconomics and Health
Commitment
Commitment to poverty reduction
Commitment to Macroeconomics and Health
Commitment of external development partners
Institutional arrangements
CMH calculations for Nepal
Opportunities for scaling up/reaching the poor
Non-financial constraints to scaling up/reaching the poor
Financial constraints to scaling up/reaching the poor
Sources
Expenditures
Recommendations and conclusions
Annexes
Annex 1Policies and Plans
Annex 2Tenth Plan Chapter 24 – Health
Annex 3Nepal Health Sector Programme – Implementation Plan (2003 – 2007)
Annex 4Health and Financing paragraphs in the PRSP
Annex 5People met in Nepal during mission 16/12/03 – 06/01/04
Annex 6Bibliography MEH situational analysis Nepal
Acronyms
AamaaAamaa Milan Kendra (Mother’s Club)
AIDSAcquired Immune Deficiency Syndrome
ALOSAverage Length of Stay
ARIAcute Respiratory Infections
BNMTBritainNepal Medical Trust
BoDBurden of Disease
CBRCrude Birth Rate
CDRCrude Death Rate
CHICommunity Health Insurance
CMHCommission on Macroeconomics and Health
CMRChild Mortality Rate
CPRContraceptive Prevalence Rate
CRSNepal Contraceptive Retail Sales Company
CTCClose-to-Client
DALYDisability Adjusted Life Year
DDDiarrhoeal Disease
DDCDistrict Development Committee
DFIDDepartment of International Development (British Govt)
DHODistrict Health Office
DoHSDepartment of Health Services
DOTSDirectly Observed Treatment, Short-course
EDPExternal Development Partner
EHCSEssential Health Care Services
FPFamily Planning
FPANFamily Planning Association of Nepal
FRFertility Rate
FYFiscal Year
GDPGross Domestic Product
GTZGesellschaft für Technische Zusammenarbeit (German Development Organisation)
HDIHuman Development Index
HEFUHealth Economics and Financing Unit MoH
HIVHuman Immuno-deficiency Virus
HMGHis Majesty’s Government
HMGNHis Majesty’s Government of Nepal
HMISHealth Management Information System
HPHealth Post
HRHuman Resources
HSSHealth Sector Strategy
IECInformation, Education and Communciation
ILOInternational Labour Organisation
IMCIIntegrated Management of Childhood Illness
IMFInternational Monetary Fund
IMRInfant Mortality Rate
INFInternational Nepal Fellowship
INGOInternational Non-Governmental Organisation
JICAJapan International Cooperation Agency
KITRoyal Tropical Institute Amsterdam
LELife Expectancy
LICLow-income country
MCHWMaternal and Child health Worker
MDGsMillenium Development Goals
MEHMacroeconomics and Health
MMRMaternal Mortality Rate
MoFMinistry of Finance
MoHMinistry of Health
MSIMarie Stopes International
MTEFMedium Term Expenditure Framework
MTEF-HMedium Term Expenditure Framework – Health
MTEPMedium Term Expenditure Programme/Plan
NGONon Governmental Organisation
NHANational Health Accounts
NHEICCNational Health Education, Information and Communication Centre
NHRCNational Health Research Council
NHSP-IPNepal Health Sector Programme – Implementation Plan
NLSSNepal Living Standard Survey
NPCNational Planning Commission
NRCSNepal Red Cross Society
OROccupancy Rate
P-1/2/3Priority 1/2/3
PAFPoverty Alleviation Fund
PERPublic Expenditure Review
PHCPrimary Health Care
PP&ICPolicy, Planing and International Cooperation
PPPPurchasing Power Parity
PRSPPoverty Reduction Strategy Paper
RHReproductive Health
SDCSwiss Agency for Development and Cooperation
SHISocial health Insurance
SHPSub Health Post
SLTHPSecond Long Term Health Plan 1997-2017
STDSexually Transmitted Disease
SWApSector-wide Approach
TBTuberculosis
TBATraditional Birth Attendant
UMNUnited Mission Nepal (INGO)
UNUnited Nations
UNDPUnited Nations Development Programme
USAIDUnited States Agency for International Development
VATValue Added Tax
VDCVillage Development Committee
VHWVillage Health Worker
WBWorld Bank
WDRWorld Development Report
WHOWorld Health Organization
Executive summary
Introduction
The Government of Nepal requested WHO to provide technical assistance to take forward the Macroeconomics and Health (MEH) agenda. The Royal Tropical Institute in Amsterdam (KIT) was selected to provide this support during the preparatory phase (around 6 months). The support will consist of the production of a situational analysis, facilitation of establishing the institutional mechanisms for taking the work forward, support for the organisation of a national meeting and facilitation of a workshop to produce a proposal for the planning phase.
The consultant visited Nepal from 16 December 2003 to 6 January 2004 to collect information, discuss options and further work as input for the situational analysis. This report is the situational analysis.
Nepal Context
Nepal is a relatively small (population 24 million) land-locked country, bordered by the two biggest countries in the world, India and China. Its renowned physical beauty makes it very fragmented and many parts are inaccessible by modern transport and lack of communication facilities. There are few cities and 86% of the population live in rural areas. The country is divided into 5 development regions, 14 zones and 75 districts and almost 4000 Village Development Committees and 58 municipalities.
Nepal was never colonised, is a constitutional Hindu monarchy and has a multiparty bicameral parliamentary democracy. However, since October 2002 the King has taken over power. Since 1996 an ever increasingly violent Maoist insurgency has thrown the country into civil war. Road blocks, abductions, forced protection and fighting are increasingly making the country outside the capital Kathmandu an insecure place to live and travel.
Underlying the insurgency is (among other things) a pervasive poverty. The country’s GDP per capita is only $250 and 38% of the population live below the poverty line. There are large inequalities. The poorest people live in the remote mountainous areas or belong to the lowest caste, the Dalits, in particular in the Western part of the country. This is also the part where the Maoists are strongest. While only 15% of households is connected to the electricity grid, 80% have access to safe water. Unemployment is a big problem, and many work abroad, bringing more money into the economy than toursim, foreign aid and export together. Illiteracy is very high, with around 40% of men and 75% of women not able to read or write.
Nepal is still a very traditional country, hierarchical, linked to a caste system, strong religious and family traditions and a feudal structure. Favouritism is institutionalised, corruption rife. On the positive side civil society is well developed with numerous NGOs, including human right organisations, and a diverse and free press. Two braod ethnic groups can be subdivided into some 60 different groups, with their own culture and language, but there is only one official language: Nepali.
Total government expenditure over FY 2002/2003 was $48 per capita, being 19% of GDP. Two-thirds of that is regular budget,one third development budget. 11% of government expenditure was used for debt repayment. The government budget for 2003/2004 is almost 20% higher. Around 60% of that comes from domestic revenues, 15% is expected to come in as foreign aid and 25% will be borrowed. The real percentage of foreign aid to Nepal is much higher, as a substantial percentage does not go through the MoF and is not accounted for in the so-called Red Book. In the health sector this percentage is even 90%. Maybe this is the reason why the expected government expenditure 2003/2004 for the health sector is so low, both compared to education (3x as much) and as compared to other countries: only 5.1% of total government budget, being $2,94 per capita and 1.18% of GDP is publicly spent on health.
The Health Sector
The central section of the MoH is responsible for policy making, and planning, financing, international cooperation, human resources, monitoring and evaluation, as well as for the central and zoanl hospitals. The Division for policy, planning and international cooperation is rather weak, but the health economcis and financing unit has become strong. The Department of Health Services is responsible for the provision of all health services at the district level and below and produces very informative annual reports. Regional Health Directors are responsible for technical backstopping as well as programme supervision. Their role seems to become less clear under the decentralisation process. At the district level and below, District and Village Development Committees are responsible for the delivery of health services.
Over the years many policies and plans have been produced. It seems that more or less simultaneously two sets of documents were developed, one government driven and related to the 5-year development plan cycle, the other EDP driven. It seems that the detailed work done by the MoH jointly with the EDPs has to some extent informed the development of the documents for the Tenth 5-year Plan. The problem seems to be that the most current, prevailing documents have somewhat different objectives, strategies and activities. The main government document in force is the Tenth Plan, the health chapter and budget of which are organised by priority programme and/or organisational centre, probably following present budget lines. The NHSP-IP, more donor-driven, is organised by objectives, outputs and activities in a logical framework and does not have a budget yet. The PRSP, supposed to be a summary of the Tenth Plan, contains elements of both the Tenth Plan’s Health Chapter and the NHSP-IP, but also includes new activities. It is therefore not clear at this point which document the MoH is implementing and using to monitor its activities. Officially the MoH is bound by the Tenth Development Plan and its MTEF. It would be helpful, if a detailed comparison was made between the IP, the Tenth Plan and the PRSP, after which the MoH, NPC and MoF could sit together with the EDPs and decide which activities they will implement together.
From all these plans however it is clear that Nepal is highly committed to poverty reduction and also sees health as a major driving force for economic growth. The MoH has identified essential health care services and the main objective of the health sector relates to scaling these up to reach more people. The EHCS package is very similar to the globally agreed priorities of maternal and child care, RH and infectious diseases, consistent with the MDGs and the package that the CMH advised. However, it is not clear which concrete activities are included. The NHSP-IP has outputs, broad actions, but no detailed activities for each output. The Tenth Plan includes prioritised programmes, but does not include the kind of detail, that sheds light on which parts of these programmes, or which activities, belong to the prioritisation. This obviously makes the costing very difficult.
The MoH further has objectives to partner with the private and NGO sector, to decentralise resources and responsibility to village levels and to improve quality of services. Alternative sources of financing and exemption schemes for user fees will be developed. The health information system will be changed in such a way that the impact of the health strategy on the health status of the poor can be monitored. As in so many countries the implementation is the problem, utilisation of public health services is low, staff does not want to work in rural and remote areas, supplies and drugs are inadequate etc.
The MoH website gives an astonishingly candid and comprehensive summary of the health status of the population and its determinants: “The Mortality and morbidity rates especially among women and children are alarmingly high. Acute preventable childhood diseases, complications of child birth, nutritional disorders and endemic diseases such as malaria, tuberculosis, leprosy, STDs, rabies, and vector borne diseases continue to prevail at a high rate. Determinants of such conditions are associated with pervasive poverty, low literacy rates, poor mass education, rough terrain and difficult communications, low levels of hygiene and sanitary facilities, and limited availability of safe drinking water. These problems are further exacerbated by under-utilization of resources; shortages of adequately trained personnel; underdeveloped infrastructure; poor public sector management; and weak intra- and inter-sectoral co-ordination”.
Another major problem is that money does not follow agreed policies. While the MTEF for the health sector, produced by the MoH in preparation for the Tenth Plan, set aside 57.6% of the budget for Priority-1 programmes and the Tenth Plan itself even 70%, the Public Expenditure Review of the health sector showed that actual funding going to Priority-1 programmes decreased from 58% to 50% over the last 3 years, while funding for priority-3 programmes increased. Also running counter to plans, is the fact that the share of the funding going to rural areas decreased, the expenditures for RH drastically decreased, and the share of health expenditures for children under 5 wasonly 4,7%, while they bear around 50% of the burden of disease.
Provision of public sector health services is basically financed from taxes and user fees. Both are regressive, as the taxes are mainly indirect (VAT) and the user fees are a fixed amount, meaning that the poor pay relatively more than the rich, if and when they make use of public services at all. There are virtually no insurance schemes in place. People pay around $10 per capita out-of-pocket per annum. A pilot with community health insurance is planned for this year. Public services are mostly used by the middle income groups, while the rich go to the private sector and the poor don’t go at all. The ongoing Nepal Living Standard Survey will give more information on utilisation of health services in the rural areas.
Poverty and Health
Data from different sources have been analysed to get a grasp on the relationship between poverty and health and reveal great disparities in both health outcomes and intermediate indicators. Differences between the richest and poorest income quintiles in attended delivery, antenatal care, immunization coverage, malnutrition, total fertility rate and use of modern contraceptives are 2-10 fold. Infant and child mortality rates are much higher in rural areas and in particular in the mountains, coinciding with income differentials. A relation between the educational level of the mother (often in itself income related) and major health indicators has also been clearly established, as well as a relation between health care seeking behaviour and poverty. Geographical focus of reaching the poor should be on the Mid-and Far-West Regions, where 22% of the population live, who have the worst health indicators of the country and where hence great health gains can be made. As these are also the strongholds of the Maoist groups, this is far from simple.
External Development Partners
In Nepal 6% of external aid is spent on health. Donor expenditure in the health sector has more than tripled over the last 3 years and amount to about 40% of total public expenditures, translating in $2 per capita per annum. The biggest donors at the moment in the health sector are Japan and the UK, together good for half the external aid, with UNICEF, WHO, UNFPA, Germany, the US and Switzerland making up most of the remainder. The WB recently reduced its IDA grants to Nepal, but might be coming back soon. The financial inputs by indigenous and international NGOs are less well documented.
The donors and the MoH have jointly developed the Health Sector Strategy and its Implementation Plan. Although this plan is a move towards a sector-wide approach, most donors are not in favour of fundpooling (yet), except DFID and the WB. At present all support is still organised in the form of projects or programmes and almost all funds go directly to the MoH or are self-executed by partners. The bulk of the donor funds go to essential health care or system development/strengthening.