Eliminating bottlenecks in public finance to improve the delivery of health services

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Globally, health economists and practitioners have been increasingly focusing on bottlenecks in public financial management (PFM) to improve the delivery of health services to citizens. The World Bank’s FinHealth: PFM in Health Tool offers a holistic analysis of health sector service delivery from a  Governance and a PFM perspective and helps develop a sequenced and detailed action plan to address bottlenecks and help improve service delivery.

FinHealth highlights that governance is critical to effective allocation and use of public resources, greater accountability and increasing responsiveness.  It aims to help governments identify key challenges and opportunities that can help improve service delivery results at the provider level.

Here are five key lessons based on global experiences in applying FinHealth:

  1. Avoid silos; triangulate PFM, Health Financing and Health Service Delivery to develop a causal analysis: Improvement in interactions between public financial management (PFM), health financing, and health service delivery outcomes through triangulated approach contributes to unpacking the causal chain and finding appropriate solutions. It is necessary to identify challenges, in a fishbone diagram as envisaged in FinHealth and isolate those that have their roots in PFM & Governance to find solutions. India (Andhra Pradesh), Myanmar and Armenia used this approach to tackle these challenges in the health sector and illustrate as to how  important it is for Health and Finance Ministries to be in sync with each other.
     
  2. Budget preparation alignment is required across various stages in Ministries of Health and Finance: Sound budget preparation including appropriate budget classification/chart of accounts enables linking better synchronization of budget with program delivery outcomes, and monitoring them at facility level. Involving all levels of service delivery — health facilities and regional authorities — in preparation of Sector plans and budgets does contribute to better alignment of allocations to service delivery requirements. Early communication of budget ceilings to the Ministry of Health and relevant units can lead to more realistic budget estimates.
     
  3. Predictability of funds for health service delivery needs to be strengthened: Delays or uncertainty in release of funds can have a negative impact on health services.  A centralized fund flow/expenditure tracking built with support of an integrated system could help.
     
  4. Health Assets need to be procured, maintained and provisioned through sound Public Investment Management (PIM) principles: The Global Report on Public Financial Management indicates significant weaknesses in PIM globally which can cause a risk of  premature failure of health assets, lack of value-for-money, poorly  maintained health infrastructure, scant presence of infrastructure in rural areas, and dysfunctional equipment. Having a well-thought-out PIM framework for capital investments and maintenance of assets can make a difference.
     
  5. Appropriate balance between accountability & service delivery objective of the health sector: Financial management controls (including internal controls, internal audit, and external audit) need to coexist and be appropriately balanced with the sectoral objective of improving service delivery. Often, financial management skills at health service delivery level and at coordinating units’ level are not only weak but inappropriately configured given the service delivery needs.  While it may be impractical to have dedicated financial management staff at primary health facility level, mechanisms to improve skills at various levels could be useful to reorient the staff and provide the right incentives.

The COVID-19 pandemic has been a watershed moment with the increasing focus on PFM issues in health  by governments and development partners like the World Health Organization, GAVI, Global Fund, UNICEF and World Bank. There is significantly now a greater collaboration between experts working on health, public finance, and governance issues amongst governments and development partners. We are in a better place today in terms of understanding the causal issues, having the tools and approaches needed to address bottlenecks and make efforts to accelerate progress towards achieving Universal Health Coverage.


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