Report No. 16695-PAK

PakistanTowards a Health Sector StrategyApril 22, 1998

Health, Nutrition and Population UnitSouth Asia Region

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PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY

Abbreviations

AJK Azad Jammu and KashmirBHU Basic Health UnitBOD Burden of DiseaseDALY Disability-Adjusted Life YearDG Director-General of Health ServicesDHO District Health OfficerDHQ District Headquarters HospitalDOH Department of HealthDOTS Directly Observed Treatment-Short CourseEDL Essential Drugs ListEPI Expanded Program of ImmunizationESSI Employee Social Security InstitutionFANA Federally Administered Northern AreasFATA Federally Administered Tribal AreasGDP Gross Domestic ProductGOP Government of PakistanHMIS Health Management Information SystemHMO Health Maintenance OrganizationHRD Human Resource DevelopmentICT Islamabad Capital TerritoryIDA International Development AssociationLHV Lady Health VisitorLHW Lady Health WorkerMCH Maternal and Child HealthMNA Member of the National AssemblyMOH Ministry of HealthMPA Member of the Provincial AssemblyNGO Non-Governmental OrganizationNWFP North West Frontier ProvincePHC Primary Health CarePIHS Pakistan Integrated Household SurveyRHC Rural Health CenterRWSS Rural Water Supply and SanitationSAP Social Action ProgramSAPP Social Action Program ProjectTFR Total Fertility RateTHQ Tehsil Headquarters HospitalUAE United Arab EmiratesWHO World Health OrganizationWDR World Development Report

Vice President: Mieko Nishimizu

Country Director: Sadiq Ahmed

Sector Manager: Richard L. Skolnik

Staff Member: Hugo Diaz

PAKISTAN

TOWARDS A HEALTH SECTOR STRATEGY

Preface

This report was prepared as a contribution to the ongoing debate inPakistan about the future of the health sector and desirable sector reforms.It was prepared by a team composed of Hugo Diaz (economist, Health, Nutritionand Population Unit, South Asia Region, World Bank), James Herm (healthmanagement specialist, consultant), David Dunlop (health economist, WorldBank), Ms. Logan Brenzel (health economist, World Bank), Akbar Zaidi(economist, consultant), Dr. Vincent de Wit (public health specialist, ADB),Dr. Mark Spohr (public health specialist, consultant), and Mr. Derek Reynolds(health management consultant, Department for International Development of theUnited Kingdom). Ms. Margaret Kyenkya-Isabirye (UNICEF/Pakistan), Dr.Bashiruil Haq (World Bank Islamabad Office), and Dr. Rushna Ravji (SocialAction Program Multidonor Support Unit, Islamabad) participated in the mainmission in July 1996 and contributed their ideas. The report also draws onthe many insights offered by the participants of several health sectorworkshops organized by the Ministry of Health with donor support and held inPakistan during 1995 and 1996, as well as on discussions held with numerousgovernment officials and NGO representatives in the course of preparation ofthe Second Social Action Program Project. A number of private health careproviders and representatives of associations of such providers were alsoconsulted in preparing the report. A draft of the report was presented inthree seminars that took place in Karachi, Lahore and Quetta in December 1997,with broad participation from the public and private sectors. A number ofuseful comments received during these seminars have been incorporated in thefinal version of the report. Peer reviewers for the report were Mr.Christopher Walker, Ms. Helen Saxenian, Dr. Xavier Coll, and Prof. Jay Satia(external reviewer). Mr. John Wall was the designated departmental reviewer.The work was conducted under the guidance of Ms. Barbara Herz, whocontributed many valuable suggestions.

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGYCONTENTS

AbstractExecutive Summary ....................................................... i-xvi

I. INTRODUCTION ...................................................... 1

II. BACKGROUND

A. The Health Situation in Pakistan ............................... 3B. Recent Government Health Expenditure Trends .................... 6C. Health and the Social Action Program ........................... 7

III. SETTING PRIORITIES FOR GOVERNMENT FINANCING IN HEALTH

A. The Current Burden of Disease .................................. 13B. The Health Delivery System ........... : ......................... 14C. Health Services Coverage and Utilization ....................... 17D. Cost of Government Health Services ............................. 22E. Priorities for the Use of Public Funds ......................... 28F. Areas of Potential Savings ..................................... 32G. Cost Recovery .................................................. 34H. Tertiary Hospital Autonomy ..................................... 38I. Conclusions and Recommendations ................................ 39

IV. IMPROVING THE MANAGEMENT OF GOVERNMENT-FINANCED HEALTH SERVICES

A. The Management Profile of Government Health Services ........... 43B. Main Management Problems ....................................... 46C. Suggested Reforms .............................................. 48D. Conclusions and Recommendations ................................ 56

V. FOSTERING THE DEVELOPMENT OF PRIVATE HEALTH SERVICES

A. Private Sector Importance and Issues ........................... 58B. Addressing Constraints Through Public/Private Partnerships ..... 60C. Conclusions and Recommendations ................................ 64

ANNEXES:

ANNEX 1 - Summary of Main RecommendationsANNEX 2 - BibliographyANNEX 3 - Burden of Disease EstimatesANNEX 4 - School Health ProgramANNEX 5 - Government Health Expenditure Data

Abstract

The health of the population in Pakistan has improved in the past three decades,but the pace of improvement has not been satisfactory. Today, Pakistan lags well behindthe averagesfor low-income countries in key indicators, including infant and childmortality and the totalfertility rate. Poor health status is in part explained by poverty,low levels of education (especially for women), the low status of women in large segmentsof society, and inadequate sanitation andpotable waterfacilities. But it is also related toserious deficiencies in health services, both public andprivate.

There is a broad consensus in Pakistan that the health sector is in need offundamental reform in order to achieve a better impact on the health status of thepopulation. The present report has been prepared as a contribution to the nationaldebate on health sector reform.

The report focuses on three key broad areas of public policy in the health sector:the setting ofpriorities for the use ofpublic revenues; management problems in thegovernment health services and possible reforms; and weaknesses in private healthservices and suggestionsfor improving the beneficial effects of these services.

Priorities among health services financed with public revenues should takeaccount of what the private health sector is doing and could do in the short to mediumterm. Generally, government health services should seek to avoid "crowding out"private services, provided that the latter are supplied by providers with the requisitetraining. Such providers are not available in many rural areas of the country.

The report recommends that top priority should be given to health education, insuch areas as nutrition, creating greater awareness of the health benefits of adequatebirth spacing, and stressing the importance of immunization and other preventiveinterventions; control of communicable infectious diseases; and maternal and childhealth services includingfamily planning, pre- andpost-natal care, deliveries by trainedpersonnel, and management of the sick child, especially for diarrhea, acute respiratoryinfections and malnutrition. Most of these top priority services could be deliveredthrough first-level health care facilities linked to community-based health workers andbacked by referral services in secondary hospitals at the Tehsil and District levels.

The top priority services generally merit subsidization from public revenues.However, except for health education and certain types of communicable disease controlinterventions, the subsidy need not be equal to the cost of production. But the issue ofwhat constitutes a suitable cost recovery policy in the health sector is a complex one. Ifcharges were increased, there would be a risk of displacing poor patients towardsuntrainedpractitioners or self-care, and discrimination against women/girls inhouseholds' health care expenditure could increase. The latter effect would moreovertend to be more pronounced among poor households. Thus any new system of increased

user charges would need to incorporate safeguards to protect the poor, and be pilotedbefore its widespread application.

Enhanced cost recovery would increase the resources available to the governmenthealth services, provided that steps are taken to ensure that revenues accrue to thecollectingfacilities and are truly incremental to their budgets. But there is also muchscope for improving the efficiency of resource use and achieving a greater impact withexisting resources. This could be achieved through reforms such as setting betterpriorities among types of inputs; undertaking periodic in-depth budget reviews of boththe development and the current budgets; deepening decentralization of management inthe Provinces; establishing Health Boards at the district level; involving communities insupporting government health care providers and helping to increase theiraccountability; contracting out some services to NGOs and others in the private sector;and placing a greater emphasis on staff development.

At the same time that a concerted effort is made within the government healthsector to improve efficiency, responsiveness and impact, the public sector also needs towork with private health care providers and their representatives to effect a parallelimprovement in private health services. The public policy goal should be to achieve anoptimal division of labor between the public and private health sectors. Attention toprivate health services is crucial because surveys show that in Pakistan the greatmajority of the population seek the care of private providers when they fall ill --in manycases providers with little or no medical training.

The report suggests several types ofpartnerships between the public and theprivate sectors in order to improve private services. Partnerships could aim atencouraging continuing education ofprivate providers; empowering professionalassociations to manage a system of certification and licensing ofproviders; introducinga voluntary accreditation system for private clinics and hospitals; enhancing attention topreventive interventions; fostering consumer education in the health area; andfacilitating the development of health insurance.

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGYEXECUTIVE SUMMARY

A. Scope of the Report

1. I'he health sector in Pakistan is in need of fundamental reform toenhance the impact of health services on the health status of the population.This need has been acknowledged by numerous knowledgeable observers andparticipants in the sector, both from the public and private segments of thesector.

2. The present report has been prepared as a contribution to what willhopefully be a concerted effort by government, the private health care sector,NGOs, and consumers, to restructure the health sector in Pakistan over thenext decade and beyond. It attempts to synthesize and assess a number ofideas and suggestions for health sector reform which originate from a varietyof sources.

3. The report was prepared in conjunction with the work towards thepreparation of the Second Social Action Program Project (SAPP-II). In thecontext of that work, each Province/area formulated their own health policyand strategy statements and a reform agenda for the next four years. TheFederal Ministry of Health and Ministry of Population Welfare formulatedstrategies for several top-priority programs where the activities of thefederal government complement those of the provinces/areas. The health sectorstrategies formulated by the Provinces/areas and federal government in thecontext of preparation of SAPP-II are broadly consistent with therecommendations of this report.

4. A key input for the provincial/area and federal strategies, as well asfor this report, were discussions with a broad range of health sector expertsfrom the public and private sectors during three National Workshops on HealthSector Reform and SAPP-II organized by the Ministry of Health with donorsupport during 1995 and 1996. Inputs from these workshops were furtherelaborated in the course of discussions with provincial and federal governmentofficials and NGO representatives during preparation of SAPP-II. The reformexperience in the first phase of the Social Action Program also informed thesediscussions.

5. Other sources that have influenced the conclusions and recommendationsof this report include:

-Interviews with staff of government health facilities in all provincesas well as managers at the district and provincial levels.

-Interviews with private health care providers and representatives ofvarious associations of such providers.

-.Recent thinking at the World Bank and other sources of analysis ofdeveloping country health sector issues on the role of government in thehiealth sector and related public finance issues.

-Previous studies conducted by local and international experts.

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6. The report focusses on three key broad areas of public policy in thehealth sector, namely:

-How should the government go about setting broad priorities for the useof scarce government revenues to pay for health prevention and care.Priorities refer to types of services, types of inputs, and types ofhouseholds (e.g., poor versus non-poor).

-What are the main management problems in the government health serviceswhich cut across all services and reduce their beneficial impact, andwhat types of management reforms could be pursued (including movingprovision outside of the public sector) in order to achieve a greaterimpact for the government revenues spent in the health sector.

-What are the main weaknesses of private health services and what aresome of the reforms that could be pursued to enhance the beneficialimpact of those services, with an emphasis on the formation of varioustypes of partnerships between the public and the private sectors.

7. Any coherent strategy for the restructuring of the health sector wouldhave to address all three broad areas, and seek to achieve an optimal divisionof labor between the public and private health care sectors (in both provisionand financing).

8. While the report stresses the importance of the population welfareprogram and the need for the government to play a strong role in the provisionof family planning services and associated information and education, it doesnot discuss in detail the present organization of the program --e.g.,concerning the issue of whether existing vertical family planning servicesshould be integrated with the rest of government health services.

9. Similarly, while communicable disease control is identified as a toppriority for the government health services, the report does not discuss indetail how specific key services are provided. Some of these issues are quiteimportant and more research on them is needed in Pakistan's context. Examplesinclude: (i) the approach to the control of tuberculosis, including thestrategies that could be followed to introduce the new DOTS approach totreatment (just starting to be piloted in the country); (ii) the approach tothe control of malaria, including the balance among various vector controlmethods, and strategies to speed up the diagnosis and treatment of malariacases; and (iii) strategies to raise immunization coverage.

B. The Health Situation in Pakistan

10. The health of the population in Pakistan has improved in the past threedecades, but the pace of improvement has not been satisfactory. Today,Pakistan still lags well behind the averages for all low-income countries inimportant respects --even though Pakistan's GNP per capita is above theaverage for low-income countries. Its infant mortality rate (about 100 perthousand births), and its under-five mortality rate (140 per thousand births),exceed the low-income country averages by 60 percent and 36 percentrespectively. Pakistan's total fertility rate exceeds the average for low-income countries by as much as 75 percent. The burden that this highfertility places on mothers is reflected in a maternal mortality rate ofroughly 300-400 per 100,000 births. By comparison, the maternal mortalityrate is less than 10 in most industrial countries and less than 100 in SriLanka --a low-income country with a good primary health care system.

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Indicators of nutrition are also worse in Pakistan than in many countries withcomparable income levels.

11. Analysis of the burden of disease (BOD) in Pakistan --an aggregatemeasure of the losses of healthy life in the form of disability and prematuredeath due to all episodes of disease and injuries that occur in a given year--indicates that almost forty percent of the total BOD is accounted for bycommunicable infectious diseases. These mostly consist of diarrheal diseases,respiratory infections, tuberculosis, and the cluster of immunizable childhooddiseases. Another twelve percent of the total BOD is accounted for byreproductive health problems (maternal and perinatal mortality anddisability). Nutritional deficiencies, particularly micronutrient-related,account for a further six percent of the total BOD. Other major categoriesare injuries with eleven percent of the total BOD, and cardiovascular diseasewith ten percent of the total BOD. Thus Pakistan is still at an early stagein the epidemiological transition, with basically preventable or readilytreatable diseases affecting primarily young children and women ofreproductive age accounting for a dominant share of mortality and morbidity.

C. Improving Health Requires Advances in Many Fronts

12. The factors behind poor health in Pakistan are many, and hence improvinghealth requires advances in a variety of fronts.

(a) Poverty. Pakistan has had good growth for several decades, but isstill a poor country. The most recent World Bank estimates ofconsumption poverty indicate that in 1990/91 about 34 percent of thepopulation had levels of consumption below a poverty line of about Rs.300 per capita per month at prices of that year (US$12 equivalent at thethen prevailing official exchange rate). Poverty negatively affectshealth status through constraining the ability of households to purchasevarious health-related services and goods.

(b) Education. Pakistan has lagged behind badly in terms of educatingits population, and this is more so with regard to women. Lack ofeducation results in poorly educated consumers of health services andconstrains the adoption of key disease-prevention behavior. Worldwideevidence suggests that when mothers have at least basic schooling,families tend to be smaller and healthier. Pakistan is now making amajor effort to upgrade the educational status of its population, andespecially of women, under the Social Action Program.

{c) The low status of women. In addition to their extremely low levelsof education, women in Pakistan are constrained in seeking health carefor themselves and their children on account of their restrictedrnobility and social patterns. In many rural areas, women are notpermitted to leave the house or village and are subject to oftenextensive restrictions in their interactions with any males from outsidetheir immediate family. This tradition of seclusion often makes itdifficult for rural women to travel to seek health care for themselvesand their children. In recent years, under the Social Action Program,the government has started to address this problem through thedevelopment of community-based health care services with female workers.

(d) Inadequate sanitation and water supplies. The large burden ofinfectious disease in Pakistan is closely related to lack of adequatesanitation facilities and safe sources of potable water for many

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households. It is estimated that, at present, only about 55 percent ofrural households have access to safe water; about one-fourth havesanitation facilities. Improving access to safe water and sanitationfacilities is another area of focus under the Social Action Program.

(e) The poor quality of health services. Both government and privatehealth services suffer from serious quality deficiencies, which detractfrom the impact of health services on the health status of thepopulation.

13. Pakistan is at an early stage in the epidemiological transition, andsimple technological solutions are appropriate to prevent or treat a majorityof illness episodes. Communicable infectious diseases, reproductive healthproblems and micro-nutrient deficiencies are categories for which medicalscience has been most successful in identifying or developing effectiveprevention and treatment interventions, which generally require only modestlevels of skills and resources. Dramatic improvements in health status couldbe achieved if such interventions were more widely applied. The main onesinclude standard public health measures such as health and nutritioneducation, provision of clean water and sanitation facilities, and reductionof other environmental hazards such as air pollution; immunization; drugtherapy for the treatment of tuberculosis; and maternal and child health careprograms consisting of family planning, pre- and post-natal care, deliveriesby trained personnel, and management of the sick child --especially fordiarrhea, acute respiratory infections, and malnutrition. In addition, thecause of better health would also be served by advances in literacy/education;the decline of poverty, leading inter alia to better household food security;and improvement in the status of women in the society.

D. Health Services Infrastructure and Use

14. The health services delivery system in Pakistan is a mix of public andprivate providers. In the public sector, provincial, federal and some localgovernments operate tertiary care hospitals in the larger urban areas. Inrural areas and smaller towns, the provincial governments (and the governmentsof FANA, AJK, ICT and FATA) operate an extensive infrastructure of first-levelcare facilities and secondary care hospitals, supported by several federalprograms. The government is by far the major provider of hospital care inrural areas, and it is also the main provider of preventive care throughoutthe country. The Ministry of Population Welfare operates its own network offamily welfare centers for the provision of family planning services.

15. The private health services sector is dominated by more than 20,000"clinics", the small, office-based practices of general practitioners. Otherprivate sector facilities such as dispensaries, maternity homes andlaboratories also tend to be small. There are also more than 500 small andmedium-size private hospitals with about 30 beds per hospital on average.They are equipped only for basic surgical, obstetric, and diagnosticprocedures, and concentrate on low-risk care. In addition, there are a fewlarge private hospitals, mainly run by NGOs and located in major cities. Theprivate health care sector also includes over 11,000 pharmacies, as well asprobably several times that number of non-pharmacy retail outlets sellingdrugs. There are many traditional or informal health care providers withlittle or no medical training. In rural areas especially, the number oftraditional providers greatly exceeds that of providers with formal medicaltraining.

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16. Formal private health services are concentrated in urban areas. Onlyabout 30 percent of all private health facilities (mostly clinics anddispensaries) are located in the rural areas, where about 70 percent of thepopulation reside. Private urban hospitals are mostly concentrated in ninelarge cities. These cities account for more than 75 percent of private sectorhospital beds. Only about one-fifth of all pharmacies are located in ruralareas, which are served mostly by non-pharmacy drug retail outlets.

17. There has been no survey of NGOs working in the health sector. However,the precdominant view is that they are small in number and, for the most part,in size, and that they are heavily concentrated in urban areas. A notableexception is the Aga Khan Health Services program, which has been successfulin implementing its community-oriented primary health care model in twodistricts of the Northern Areas.

18. While access to government rural health facilities and secondary carehospitals is generally good in most areas, utilization levels are low. A 1993survey conducted by the Ministry of Health and WHO found that, in the lastworking day preceding the survey, the average number of outpatients seen at aRural Health Center was just 34; for Basic Health Units, the correspondingfigure was 24 (a Rural Health Center usually has a staff of about 30, whileBasic Health Units usually have a staff of about 10). A cost study conductedfor this report, based on a small sample of 40 facilities, also found lowlevels of utilization for Basic Health Units, Rural Health Centers, TehsilHeadquarters Hospitals, and District Headquarters Hospitals.

19. At the same time, household surveys show that most people seek care fromprivate providers when they fall ill, at least for first consultations. The1991 Pakistan Integrated Household Survey showed that only about one-fifth offirst consultations nationwide were with government providers, mostlyhospitals. The largest group, at 46 percent, reported seeing private doctors,while about 30 percent reported seeing private providers with no formalmedical training --mostly staff or owners of medical stores who freelydispense prescription drugs. The latter figure is probably an underestimate,since many informal health care providers in Pakistan pass themselves off as"doctors". Tabulations from the 1995/96 Pakistan Integrated Household Surveyshow similar results.

20. There is, of course, nothing wrong with people using private health careproviders, provided that they have the requisite training. This is in fact agood thing, since it releases fiscal resources that can be allocated to otherhigh-pr:Lority uses for which there are no private alternatives. But when alarge proportion of the population is using health care providers who lack therequisite training, that is not a good state of affairs. The result is notjust poor care for the immediate problem but often also exacerbation of futurehealth problems, for instance through the indiscriminate use of antibioticswhich gives rise to resistant strains of bacteria.

21. In many rural areas, trained private health care providers are notavailab:Le. Thus, in these areas it is particularly important to improve thequality of government health services to induce people to switch from informalsources of advice and drugs to government health services. Better consumereducation would also help in this regard. Given the apparently large degreeof unutilized capacity in the government services, unit costs of governmentservices would decline, making these services more efficient.

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E. Weaknesses in Government Health Services

22. Government health services suffer from many weaknesses that impair theirefficiency, quality and impact. The most important are discussed below.

Insufficient Focus on Preventive Interventions

23. Government health services have traditionally had a curativeorientation. Health staff have tended to passively wait for sick people tocome to their facilities for treatment. However, the pattern of disease inPakistan calls for a greater emphasis on preventive interventions; suchemphasis also requires health staff to be more proactive and to seek toeducate the neighboring communities on how to take better care of theirhealth. The inadequate emphasis on preventive interventions is reflected inthe unsatisfactory coverage of immunization, maternal and child healthservices, and family planning services. Health education programs are alsopoorly developed.

Gender Imbalances

24. The government health services are predominantly male --both frontlinestaff and managers. A more balanced gender composition would be highlybeneficial. It would result in a better rapport between the health staff andthe female population, who are also the critical link to reach young children.While progress in recruiting frontline female staff has been made in recentyears under the Social Action Program, large gaps still remain. Of 134 ruralhealth facilities sampled in the 1995/96 Pakistan Integrated Household Survey,one-third did not have any female staff.

Excessive Centralization of Management

25. The management of provincial government health services is verycentralized in all of its phases (planning, implementation and monitoring) andaspects (personnel, finances, and supplies) . Most managers have littlecontrol over resources and real management decision making rests far away fromthe delivery of services.

Negative Staff Attitudes and Absenteeism

26. While difficult to document, there is a widespread impression inPakistan that the attitudes of government health staff towards the public areoften negative or unfriendly. Absenteeism is also generally acknowledged tobe a significant problem. Government health staff are often absent from theirposts during duty hours. In many cases, staff theoretically posted to a ruralhealth facility are actually "seconded" to other government facilities inurban areas. In some cases staff reportedly make payments to theirsupervisors in order to be allowed to be absent from their jobs. In othercases they are reported to be protected by politicians who shield them fromdisciplinary action in exchange for votes or political work. Staff,especially medical officers, compete for postings to health facilities in thebusier towns and trading centers where they can have a profitable privateclinic on the side. This tends to increase the frequency of transfers andfurther weakens the ties of staff to communities.

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Political Interference

27. Politicians often interfere in various types of personnel decisions,such as recruitment, transfers and disciplinary actions. This results inlower efficiency of the government health services and is a major demoralizingfactor for managers and staff.

Lack of Openness

28. Government health services have little interaction with communitybodies, professional associations, NGOs, and the private health services. Theabsence of meaningful interaction with these other segments of civil societyweakens accountability and the impetus for reform.

Weak Human Resource Development

29. Human resource development in the government health services has beendeficient in its three dimensions: planning, production and personnelmanagement. The planning of human resources has been incomplete andintermittent. It has resulted in serious imbalances among categories of staff--particularly insufficient numbers of female paramedics. Concerning theproduction of human resources, although there has been significant progress inrecent years, more needs to be done to improve in-service training, bothtechnical and managerial. Personnel management has been largely limited to.personnel actions (recruitment, promotions, transfers, etc.), to the detrimentof other key functions such as setting performance standards and carrying outperformance assessments. Personnel management has also suffered fromexcessive centralization and political interference.

Insufficient Non-Salary Budgets

30. The government health services have suffered from insufficient budgetallocations to fund current expenses other than staff salaries. These includeexpenses for drugs, diagnostics (laboratory tests, x-rays), repairs andmaintenance of facilities, replacement of equipment, utilities,transportation, in-service training expenses, and health education materials.At the same time, government health services may be overstaffed in certaincategories, such as general medical officers and non-technical support staff.Under the Social Action Program, there were attempts to raise the proportionof non-salary budget to total current budget but the results were mixed.

31. A cost study carried out for this report suggests that the provincialbudget allocations for drugs would have to be several times the actual currentallocations to be sufficient to cover the cost of treatment of all patientsnow using government facilities. However, large savings could be achieved ifgeneric drugs were used in preference to branded drugs, and management ofdrugs were improved generally.

F. Weaknesses in Private Health Services

32. The importance of the private health sector has been highlighted above.It has been noted that the great majority of people first consult a privateprovider when they fall ill. Survey data also suggest that householdexpenditure on privately-provided health services and goods may be about threetimes the amount of government health spending.

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33. The beneficial impact of private health services is diminished, however,by a number of weaknesses, of which the most important are:

(a) The generally low quality of care and widespread "quackery"(practice of medicine by people with little or no formal training).

(b) Insufficient attention paid to preventive interventions.

(c) The lack of functioning regulatory mechanisms to protect theconsumer.

(d) The poor education of most consumers concerning health matters(which is in part a reflection of poor education generally). Thisresults in consumers failing to distinguish between qualified andunqualified providers, and a weak effective demand for preventiveinterventions.

(e) The concentration of trained private providers in urban andperiurban areas.

34. The development of the private health sector is also constrained by thelow level of development of the health insurance industry. The lack of accessto health insurance poses a major problem for the financing by households ofcare for catastrophic episodes of illness or injuries.

G. An Agenda for Reform

35. The above discussion makes it clear that there is a need for fundamentalreform in the health sector. Reform needs to encompass both the public andprivate segments of the health sector, with a view to achieving an optimaldivision of labor between public and private production and financing ofhealth services.

36. Within the public sector, there has been progress towards reform underthe Social Action Program, launched in 1993/94. Awareness of Pakistan's poorperformance in health and in fertility reduction has greatly increased. Total(federal and provincial) government health expenditure for all levels ofservice as a percentage of GDP has not increased and remains low byinternational standards. However, a larger share is now devoted to primaryhealth services including community-based services and preventive services.More women health care providers kave been trained and hired, and a promisingnew Lady Health Workers Program has been started to provide the kind ofcommunity-based outreach that has worked to improve health world-wide. Therehave been some improvements in planning capacity and a beginning ofdecentralization of decision-making powers within provincial Departments ofHealth. Essential drug lists have been introduced for various types ofgovernment health facilities. Provincial Departments of Health are alsoattempting to strengthen the linkages between community-level workers, first-level care facilities, and the first level of referral. A "participatorydevelopment program" has been started to encourage provision of healthservices by NGOs. These are all promising steps, but much more remains to bedone. Moreover, as noted, reform needs to encompass the private sector aswell.

37. In the rest of this section, a number of specific suggestions forfurther health sector reform are made. The suggestions are divided betweenthose pertaining to the public segment of the sector and those pertaining to

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the private segment. However, it should always be kept in mind that publicand private activities are often substitutes or complement each other, andthat developments in one segment of the overall health sector will in mostcases affect the other.

Government Health Services

38. Achieving a Sharper Focus on Service Priorities. Government healthservices should seek to achieve a sharper focus on service priorities, interms of both resources and management attention. Priorities for governmentservices should be set taking due account of what the private health sector isdoing (and could do in the short to medium term). Generally, governmenthealth services should seek to avoid the "crowding out" of private services,if the latter are offered by qualified providers. Government health servicesshould rather seek to complement private services.

39. Use of public funds to pay for health services can be justified in thepresenc,e of various market failures (i.e., situations where the behavior ofprivate buyers and sellers would not lead to an optimal solution fromsociety's point of view), such as the existence of public goods,externaLities, information deficiencies, and insurance market failure. Publicgoods are goods or services such that one person's consumption does not reducethe amount available for others to consume. Typically these are goods fromwhich consumers cannot be excluded: if they are made available to anyone, theyare available to all, at least locally. Since people can consume such goodswithout having to pay for them, no one will produce them for sale toindividual consumers. Therefore they will be produced only if the governmentpays for their production. Control of disease vectors, protection of waterand food safety, and health education are examples of public goods. There arealso some health interventions that provide significant positiveexternalities, such as the control of communicable diseases. In these cases,individuals can and do buy an intervention and benefit from it, but theycannot prevent non-consumers from also deriving some benefit. Private marketscan exist but, in the absence of government subsidization, will produce lessof these interventions than would be optimal for society as a whole.Information deficiencies cause many types of efficiency losses and may justifygovernment intervention, including the use of public funds. Poorly developedhealth insurance markets may justify using public funds to subsidize treatmentof catastrophic episodes of illness or injuries (which have a low incidencebut are costly to treat in each case, relative to most households' income).However, in a low-income country such as Pakistan, only those interventionsthat are known to be highly cost-effective should be subsidized by thegovernment in dealing with the problem of catastrophic events.

40. Within the general framework outlined in the previous two paragraphs,the setting of priorities for the use of public funds (and of scarce publicmanagerial capacity) among types of health services needs to take into accountrelevant country characteristics. These include such factors as the level ofdevelopment of the private sector, the epidemiological profile of thepopulation, the level of education of consumers, and the social status ofwomen. In Pakistan's case, three categories of health services would seem todeserve top priority in terms of allocation of government funds and managementattention. These categories are: (i) health education, in such areas asnutrition, creating greater awareness of the links between proper spacing ofbirths and the health of mothers and babies, stressing the importance ofimmunization and other preventive interventions, teaching basic hygienepractices, informing about AIDS and other sexually transmitted diseases, and

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producing better educated health consumers; (ii) control of communicableinfectious diseases; and (iii) maternal and child health services includingfamily planning, pre- and post-natal care, deliveries by trained healthpersonnel, and management of the sick child, especially for diarrhea, acuterespiratory infections and malnutrition. Moreover, for (ii) and (iii),greater priority should be given to the rural areas, where trained privatehealth care providers are often not available.

41. Most of these top-priority services could be delivered through frontlinefirst-level health care facilities linked to community-based health workersand backed by lean referral services in secondary hospitals. Mass mediashould be used to support and reinforce interpersonal health educationactivities undertaken by health personnel.

42. The technical knowledge to deliver the top-priority interventions isavailable in Pakistan but not sufficiently widespread. Moreover, as alreadynoted, more work is needed to refine the approach to key services such astuberculosis control, in order to enhance service effectiveness.

43. The top-priority services merit subsidization from government. However,except for health education, and certain types of communicable disease controlinterventions which are also public goods, the subsidy need not be equal to100 percent of the cost of production. A certain degree of cost recovery maybe possible, and desirable. A greater degree of cost recovery than at presentis also desirable for other government-provided health services.

44. Stressing Cost Recovery. Cost recovery in government health facilitiesis very low. Revenue from user charges from all levels (primary, secondaryand tertiary) amounts to about 2 percent of total government spending onhealth. The government may wish to reconsider its cost recovery policy.Since all real-world taxes are distortionary (i.e., cause individuals andfirms to behave in ways that tend to reduce national income), the generalprinciple should be that the government should not pay out of general revenuesfor any services that people would be willing to pay for themselves (out ofpocket or through insurance premia).

45. Greater cost recovery would help to mobilize resources for non-salaryinputs and for expanding services in several high-priority areas which havebeen neglected, including tuberculosis control, nutrition, obstetricalemergencies, and health education. With the fiscal situation in Pakistancertain to be extremely constrained in the foreseeable future, sufficientadditional resources to meet these needs are unlikely to be available fromgeneral revenues. If more resources could be mobilized from the system'sclients through user charges --from those who are willing and able to paymore--, faster progress would be possible. To this effect, the provincialTreasuries would have to ensure that the additional proceeds from enhanceduser charges accrue to the government health services as incrementalresources.

46. The issue of what would constitute a suitable health services costrecovery policy in Pakistan is a complex one, however. There are potentialrisks as well as benefits from raising user charges. First, if the poor arenot exempt from higher user charges, many of them could stop using governmentfacilities and resort to untrained practitioners or self-care instead.Secondly, there is also a risk that discrimination against women/girls inhouseholds' health care expenditure could increase. The latter effect wouldmoreover tend to be more prononunced among poor households. Third, for

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catastrophic illnesses/injuries, recovery of a large share of treatment costswould be problematic.

47. Because of the above risks, any changes in cost recovery policy wouldneed to be preceded by careful analysis, and *revised charges ought to bepiloted first in a few districts.

48. Encouraging Hospital Autonomy. There is considerable momentum inPakistan towards granting greater managerial and financial autonomy totertiary government hospitals (and, more recently, to District HeadquartersHospitals as well). Several hospitals already enjoy greater autonomy.Financial autonomy need not be associated with greater cost recovery, but inPakistan the trend seems to be in favor of such an association.

49. The trend towards greater hospital autonomy is in general a positivedevelopment and should be encouraged. Proceeds from enhanced cost recoverycan be used to finance expansions of service or improvements in quality thatmay not be feasible if the hospital is solely dependent on the governmentbudget for its finances. Autonomy also endows managers with real powers, suchas the power to select any new staff and to dismiss those who do not perform.Thus it: is likely to lead to major operational efficiency gains.

50. For the benefits of autonomy to materialize fully, though, certainconditions need to be present. The governing board of an autonomous hospitalshould have real autonomy. Its membership should adequately represent themajor groups of stakeholders, and it should embody sufficient technicalexpertise as to be able to assess and guide the hospital's management team.Moreover, the granting of autonomy should be accompanied by the introductionof a performance agreement which broadly sets out the outputs expected fromthe autonomous hospital (as counterpart to the current government subsidy itmay still be receiving, and its use of public assets).

51. I't is also necessary to guard against possible perverse equity effects.If the autonomous hospitals continue to rely to an extent on taxpayers' money,but poor people are not using their services, then operation of the hospitalswould redistribute income away from the poor (since in Pakistan payment oftaxes is approximately proportional to household income for all income decilesexcept the very top). To guard against this undesirable result, thegovernment contribution to the budgets of the autonomous hospitals should beearmarked for subsidizing consumption of services by the poor.

52. Improving Efficiency and Management of Government Services. Greaterhospital financial autonomy and increased cost recovery at other levels of thesystem would increase the resources available to government health services.But there is also much scope for improving the efficiency with which resourcesare used. The need for achieving a sharper focus on service priorities hasalready been noted. There are several other avenues of reform that wouldresult in the government health services providing better value for money.

{a) Setting Better Priorities Among Types of Inputs. In view of theexisting unutilized capacity in many government facilities, theestablishment of new facilities and upgradation of existing ones shouldbe kept to a minimum, and it should be subject in each case to suitablecriteria related to expected utilization and other relevant factors.Instead, priority should be given to providing for more adequate non-salary inputs for existing facilities. Generic drugs should be givenpreference over branded drugs. Provision of additional staff in

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existing facilities should be restricted to redressing imbalances, inparticular increasing the numbers of female paramedics. For othercategories of health staff, vacancies should not be filledautomatically, but the continuing need for the positions should beexamined first. In particular, the categories of general medicalofficers and non-technical support staff would appear to deserve closescrutiny.

(b) Undertaking Periodic In-Depth Budget Reviews. The Federal andprovincial governments should undertake periodic in-depth reviews oftheir ongoing health programs in order to assess their continuing needand the adequacy of program design. Examples of inefficient expenditurenoted in this report include the school health program (as currentlydesigned) and the construction of badly sited rural health facilities.

(c) Deepening Decentralization of Management. The process ofdecentralization of management to the district level and below alreadyinitiated within provincial Departments of Health should be deepened.It should encompass all three phases of management --planning,implementation and monitoring.

(d) Establishing Health Boards. In Pakistan, the government healthservices are currently both "purchasers" and "providers"; the same setof people in each province decides what types of services will beproduced, and the specific manner in which the services will be produced(within the budget envelope agreed with Finance). One important optiontowards improving the organization and governance of the sector would beto split the two functions of purchasing and provision. This wouldenable "opening up" the decision-making process concerning broadresource allocation decisions to wider public representation, whileenabling health sector specialists to concentrate on managing theproduction of services. Such a system would also facilitate holdingproviders accountable for their actions, provided that the purchasingauthority has effective control of the health budget. In order to beginthis process of opening up and improving provider accountability, theestablishment of health boards at the provincial and district levels,with broad representation from users and the private and public healthsectors, is suggested in this report. Initially, the health boardscould have a predominantly coordinating role with limited authority.The role of the health boards could then evolve over time towardsincorporating a sector planning function, with real authority over theallocation of government resources within their respective areas.Eventually these boards could become purchasing authorities for allgovernment-financed health services within a given area --probably thedistrict level. In this capacity, the health boards would enterperformance-based management agreements (or contracts) with providers ofvarious kinds --including NGOs and other private providers in additionto the staff of government facilities. In order for such an arrangementto be effective, the health boards would need to have sufficientauthority to penalize providers whose performance falls short of whatwas agreed in the management agreements, including public sectorproviders.

(e) Involving Communities. District health boards should haverepresentation from community bodies (users). In addition, governmenthealth services would be rendered more responsive and effective ifcommunity participation could be made an integral part of the

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functioning of individual facilities. Ideally, such involvement shouldbe comprehensive, including not only contributing resources but alsoparticipating in management. Achieving sustained grass-roots communityparticipation in the health sector is difficult, however. It may bebest to try different approaches through pilot projects first.

(f) Contracting With NGOs and the Private Sector. NGOs tend not tosuffer from the same performance problems as the public sector becauseof their smaller size and different organizational culture. Thus, inmany instances, NGOs can be a very cost-effective channel for provisionof government-financed health services; the government need not provideall it finances. Under the Social Action Program, the government hasstarted a program to fund selected health NGOs. It is recommended inthis report that the government expand its efforts to support thedevelopment of health NGOs. Specifically, it is suggested that thegovernment focus its assistance on NGOs which are staffed and managed bywomen and whose focus is on the health of women and children.Additionally, it is suggested that the provincial governments considerrunning pilot projects whereby they would contract with a professionalassociation of private physicians to provide a basic package of primaryhealth services to an identified population, on a prepaid capitationbasis. Another possibility would be to contract provision of serviceswith some of the religious/ethnic-based organizations which are alreadyactive in the health field. Suitable performance criteria should beincluded in the contracts.

(g) Putting a Greater Emphasis on Human Resource Development. The staffare the critical factor in providing quality health services, and theirknowledge and skills are the critical factor in their performance,together with incentives and accountability. The existing weaknesses inhuman resource development have already been noted. To improveefficiency of government health services, greater emphasis needs to beplaced on human resource development. Both technical and managerial in-service training should be stepped up, and aspects of decentralizationand community participation should be included in this training.Personnel management should abandon its narrow focus on personnelactions and focus more on setting standards and assessing performance.And, most importantly, political interference in personnel managementshould stop.

Private Health Services

53. At the same time that a concerted effort is made within the governmenthealth sector to improve quality, responsiveness and impact, the public sectoralso needs to work with private health care providers to effect a parallelimprovement in private services.

54. The public policy goal should be to achieve an optimal division of laborbetween the public and private health sectors. The nature of such division oflabor would change over time, depending on the state of development of theprivate sector and other factors.

55. At present, given the current state of development of the private healthsector in Pakistan, the government has a legitimate role to play in a numberof areas. The most important are:

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(a) Providing or arranging for the provision of public goods (as definedin para. 39 above), such as health education, consumer education, andany services conducive to a cleaner environment. Financing should belargely from general revenues.

(b) Providing or arranging for the provision of health care services inlocalities not adequately served by trained private providers, with astrong focus on communicable diseases and maternal and child health.Financing should be a combination of government subsidy and usercharges, but the poor should be exempt.

(c) Providing or arranging for the provision of treatment forcatastrophic illnesses/injuries, when cost-effective interventions arefeasible, in order to compensate for the low level of development ofhealth insurance institutions. Financing should be a combination ofgovernment subsidy and user charges, but the scope for cost recoverywould be limited (as a proportion of cost of treatment).

(d) Forming partnerships with the private sector to improve the skillsof private health sector personnel, improve the standards of healthcare, enhance attention to preventive care, and encourage a betterdistribution of private providers.

(e) Encouraging and guiding the development of the health insuranceindustry.

56. Over time, as the formal private health sector in Pakistan becomesstronger and expands its reach into the rural areas, and as the healthinsurance industry develops, the public sector's role in (b) and (c) aboveshould decline (but the public sector would need to retain a key role insurveillance of communicable diseases). On the other hand, the public sectorshould have a permanent role in (a), (d), and (e), although the contents ofpublic sector action would change over time.

57. For the near future, this report makes a number of specific suggestionsfor various types of partnerships between the public and private sectors,which would facilitate the efficient development of private health servicesand improve their beneficial effects on the health of the population. Tosummarize, it is suggested that the following initiatives be considered:

(a) Active encouragement by the public sector of the continuingeducation work being carried out by various professional associations ofhealth care providers.

(b) Empowerment of professional associations to manage a system ofcertification/licensing of health care providers.

(c) Introduction of a voluntary accreditation system for private clinicsand hospitals.

(d) Enhancement of attention to preventive care in private health caretransactions through measures operating on both the supply side(correcting the curative bias of medical education) and the demand side(better informing the public about the benefits of preventive care).

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(e) Public campaigns to educate consumers about the dangers of seekinghelp from health care providers who lack the requisite training, and tohelp consumers to identify various categories of providers.

(f) Initiatives to foster the development of the health insuranceindustry, including allowing the self-employed to enroll in the ESSIsystem, a pilot project to develop health-maintenance organizations, andcapacity-building work to strengthen the government's regulatorycapabilities in health insurance.

(g) A pilot project for provincial governments to contract with anassociation of private physicians for the provision of basic healthservices to a targeted urban slum population on a prepaid capitationbasis.

In Conclusion

58. The need for fundamental reform in Pakistan's health sector is clear.This report suggests a number of directions along which such reform couldproceed. The payoff to successful reform would be large --in terms ofreductions in infant and child mortality, maternal mortality, and improvementsin the health status of the population at large. Successful reform willrequire a strong partnership between the public and the private sectors.

59. While many of the reforms suggested in this report could be pursued inthe near term (and some are a continuation of ongoing trends), it would alsobe desirable for a national consensus to evolve on the basic characteristicsof the health sector Pakistan should have over the longer term --say 10-15years from now. This is an area where the government should take the lead,but a highly participatory process would be necessary, involvingrepresentatives from all major groups of stakeholders.

60. The Government has recently taken an important step towards defining astrategy for the health sector in the next decade, by issuing a revisedNationa:L Health Policy (a previous policy paper had been issued in 1990). Thepolicy priorities specified in the 1997 National Health Policy are broadly inline with the recommendations in this report. The National Health Policyplaces strong emphasis on decentralization and the development of districthealth systems; the establishment of District Health Authorities, with broadrepresentation from government, health professionals and community leaders, tosupervise the district health management teams and decide on resourceallocation within their districts; the promotion of active communityinvolvement in supervising and assisting government health facilities;bringing about better coordination between government health services andNGOs, and providing funding for selected NGOs and community-basedorganizations for the provision of health services; granting a much greaterdegree of autonomy to District Headquarters Hospitals; further reducing genderimbalances in staffing; broadening the ESSIs system of health insurance; andintroducing a mechanism for the accreditation of private hospitals andclinics. Priority health programs specified in the National Health Policyinclude the Expanded Program of Immunization, the Prime Minister's Program forFamily Planning and Primary Health Care, Maternal and Child Health,Reproductive Health, Acute Respiratory Infections and Diarrheal DiseasesControl Programs, Malaria Control Program, Tuberculosis Control Program, AIDSControl Program, Nutrition, Mental Health, Oral and Dental Health, HealthEducation, and School Health Programs.

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61. The National Health Policy also proposes an innovative scheme for thefinancing of health services in rural areas and underserved urban areas. Inthis scheme, families would purchase "health cards" from the government(through community-based organizations) for a flat per capita annual amount.Poor families would get the health cards for free. Enrolled families would beentitled to: (i) a basic package of essential services with no additionalpayments; and (ii) additional services (referral, emergencies) for whichcopayments would apply. Providers participating in the scheme would receive aflat annual per capita fee for the provision of the basic package to theenrolled families. For additional services they would be paid on a fee-for-service basis. Providers would include "privatized" first-level carefacilities (e.g., BHUs operated by the existing staff, or by NGOs or privatehealth care providers, with the government retaining ownership) and autonomousTehsil and District Headquarters hospitals. The entire scheme would beclosely supervised by the District Health Authorities with the assistance ofcommunity-based organizations. The scheme would aim at improving financialincentives of health professionals in rural areas for improving theirperformance. It would also enhance the resource base for the formal ruralhealth system by pooling together public and private resources and personnel.The scheme would first be piloted in 2-3 Union Councils in each Province.

62. In conclusion, there are a number of good ideas and suggestions forimproving the performance of the health sector in Pakistan currently on thetable. In the coming years, some of these ideas will hopefully move to theimplementation stage. The World Bank, ADB, DFID, WHO, UNICEF, UNFPA, andother bilateral and multilateral international assistance agencies interestedin the development of the health sector in Pakistan would like to participateand assist in this process of renewal.

CHAPTER I: INTRODUCTION

1.01 The health sector in Pakistan is in need of fundamental reform.This need has been acknowledged by numerous knowledgeable observers andparticipants in the sector, both from the public and private segments of thesector. The need for reform is also reflected in the inclusion of health(including the population welfare program) in the Social Action Program (SAP),although the reforms targeted under SAP pertain not to the sector as a wholebut only to basic government services.

1.02 The present report has been prepared as a contribution to whatwill hopefully be a concerted effort by government, the private health caresector, NGOs, and consumers, to restructure the health sector in Pakistan overthe next decade and beyond. It attempts to synthesize and assess a number ofideas and suggestions for health sector reform which originate from a numberof sources.

1.03 The report was prepared in conjunction with the work towards thepreparation of the Second Social Action Program Project (SAPP-II). In thecontext of that work, each Province/area formulated their own health policyand strategy statements and a reform agenda for the next four years. TheFederal Ministry of Health and Ministry of Population Welfare formulatedstrategies for several top-priority programs where the activities of thefederal government complement those of the provinces/areas. The health sectorstrategies formulated by the Provinces/areas and federal government in thecontext of preparation of SAPP-II are broadly consistent with therecommendations of this report.

1.04 A key input for the provincial/area and federal strategies, aswell as for this report, were discussions with a broad range of health sectorexperts from the public and private sectors during three National Workshops onHealth Sector Reform and SAPP-II organized by the Ministry of Health withdonor support during 1995 and 1996. Inputs from these workshops were furtherelaborated in the course of discussions with provincial and federal governmentofficials and NGO representatives during preparation of SAPP-II. The reformexperience in the first phase of the Social Action Program also informed thesediscussions.

1.05 Other sources that have influenced the analysis andrecommendations of this report include:

-Interviews with staff of government health facilities in all provincesas well as managers at the district and provincial levels.

-Interviews with private health care providers and representatives ofvarious associations of such providers.

-Recent thinking at the World Bank and other sources of analysis ofdeveloping country health sector issues on the role of government in thehealth sector and related public finance issues.

1 The provinces are Punjab, Sindh, North-West Frontier Province (NWFP) andBalochistan. The areas are Northern Areas, Azad Jammu and Kashmir, theFederally Administered Tribal Areas (FATA) and the Islamabad Capital Territory(ICT).

-Previous studies conducted by local and international experts.

1.06 The report focusses on three key broad areas of public policy inthe health sector, namely:

-How should the government go about setting broad priorities for the useof scarce government revenues to pay for health prevention and care.Priorities refer to types of services, types of inputs, and types ofhouseholds (e.g., poor versus non-poor).

-What are the main management problems in the government health serviceswhich cut across all services and reduce their beneficial impact, andwhat types of management reforms could be pursued (including movingprovision outside of the public sector) in order to achieve a greaterimpact for the government revenues spent in the health sector.

-What are the main weaknesses of private health services and what aresome of the reforms that could be pursued to enhance the beneficialimpact of those services, with an emphasis on the formation of varioustypes of partnerships between the public and the private sectors.

1.07 Any coherent strategy for the restructuring of the health sectorwould have to address all three broad areas, and seek to achieve an optimaldivision of labor between the public and private health care sectors (in bothprovision and financing).

1.08 It should be stressed at the outset that the report does notcontain a comprehensive analysis of issues and problems in the health andpopulation welfare sector. In particular, it does not enter into discussionsconcerning the details of how specific key services are provided (and shouldbe provided). Some of these issues are quite important and more work on themis needed in Pakistan's context. Thus, while the report stresses theimportance of the population welfare program and the need for the governmentto play a strong role in the provision of family planning services andassociated information and education, it does not discuss in detail thepresent organization of the program. Similarly, while communicable diseasecontrol is identified as a top priority for the government health services,the report does not discuss in detail specific issues such as: (i) theapproach to the control of tuberculosis, including the strategies that couldbe followed to introduce the new DOTS approach to treatment (just starting tobe piloted in the country); (ii) the approach to the control of malaria,including the balance among various vector control methods, and strategies tospeed up the diagnosis and treatment of malaria cases; and (iii) strategies toraise immunization coverage.

1.09 The rest of the report is organized as follows. Chapter IIprovides a brief analysis of the health situation in Pakistan, recent trendsin government expenditure, and the health and population welfare aspects ofthe SAP. Chapter III discusses the main issues surrounding the setting ofpriorities for government financing and makes several suggestions forpriorities which take into account the country situation. Chapter IVdiscusses management problems in the government health services and suggestsan agenda for reforms. Chapter V discusses weaknesses in the private healthcare sector and gives a number of suggestions to foster the efficientdevelopment of the sector. A summary of recommendations is provided in Annex1 for ease of reference.

CHAPTER II: BACKGROUND

A. The Health Situation in Pakistan

2.01 The health of the population in Pakistan has improved in recentdecades. As shown in Table 2.1 below, survey data suggest that the infantmortality rate declined from about 140 per thousand live births around 1970 toabout 101 per thousand in the early 1990s. Infant mortality in the early 1990swas. higher for boys than for girls (105 versus 97), and higher in rural areasthan in urban areas (108 versus 81). Life expectancy at birth is alsoestimated to have gone up between 1970 and the early 1990s: from 49 to 63years for females and from 50 to 61 years for males. The larger increase forfemales reverses the previous anomaly of higher life expectancy for males.The total fertility rate, which is an important determinant of the healthstatus of women and children, has apparently begun to decline.' It wasestimated at 7.0 in 1970, and it appears to have fallen to somewhere between5.4-6.3 in the late 1980s and early 1990s.

2.02 But despite this progress, Pakistan still lags well behind theaverages for all low-income economies in important respects --even thoughPakistan's GNP per capita is above the average for low-income economies(US$460 versus US$430, in 1995). Its infant mortality rate, in particular,appears to be about 60 percent higher than for low-income economies includingChina and India, or about 15 percent higher if these two countries areexcluded (Table 2.1.). Its under-five mortality rate is estimated to be about36 percent higher than the average for low-income economies including Indiaand China, although it is on a par with the average when these two countriesare excluded.

2.03 Pakistan's total fertility rate exceeds the average for low-incomeeconomies including India and China by a wide margin --50 to 75 percent,depending on whether we take the lower figure for Pakistan of TFR=5.4, or the

2higher figure of TFR=6.3. The burden that this high fertility places onmothers is reflected in a maternal mortality rate of roughly 300-400 per100,000 births.3 By comparison, the maternal mortality rate is less than 10per 100,000 births in most industrial countries and less than 100 in SriLanka, a low-income country with a good primary care system.

1/ The total fertility rate measures the average number of children that wouldbe born to a woman who has completed her reproductive cycle, given currentpatterns of age-specific fertility.

2/ The higher figure of 6.3 is derived from the 1991 PIHS, while the lowerfigure of 5.4 is derived from the 1991 Demographic and Health Survey.

3/ Maternal mortality rates are difficult to estimate. The most recentestimate for Pakistan is 340 maternal deaths per 100,000 births, derived usinga model based on the general fertility rate and the proportion of birthsassisted by persons trained in midwifery skills.

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Table 2.1 _Pakistan -Trends in Selected Health and Fertility Indicators and Com arison with Average of Low-income Economies

Pakistan Avge. of Low Avge. of LowIncome ] Income EconomiesEconomies Excluding I dia and

China

A. Infant Mortality:(Per thousand live births)

Pakistan, 1970 (WDR 1995) 142Pakistan, 1987-89 (PIHS 1991) 131Pakistan, 1991-93 (PIHS 1995/96 101-Boys 105-Girls I 97

Average of Low-income Economie 1993 (WDR 1995) 64 89

B. Under-Five Mortality:(Per thousand live births)

Pakistan, 1987-91 (PIHS 1991)_ 140Average of Low-income Economies, 1993 (W R 1995) 103 144

C. Life Expectancy at Birth, Female:(Years) I I I

Pakistan, 1970 (WDR 1995) 1 49Average of Low-income Economies, 1970 (WDR) 54 47Pakistan, 1993 (WDR 1995) I _ 63Average of Low-Income Economie , 1993 (W R 1995) 63 57

I ID. Life Expectancy at Birth, Male .._._.

(Years) I I_ _ IPakistan, 1970 (WDR 1995) 50Average of Low-income Economies, 1970 (WDR 1995) 53 45Pakistan, 1993 (WDR 1995) | | 61Average of Low-income Economie s,1 993 (WDR 1995) 61 54

E. Under-Nutrition:

Pakistan, Percentage of Low-Birth Weight Babies,1991 (Demographic and Health Surey, 1991) 30%Pakistan, Percentage of Children Age 5 and YoungerWith Protein-Energy Malnutrition, 1991(Demographic and Hea th Survey, 1991) 50%

I ..F. Total Fertility Rate:

Pakistan, 1970 (WDR 1995) 7Pakistan, 1987-91 (PIHS 1991) 6.3Pakistan, 1986-91 (Demographic andHealth Survey 1991) | 1 5.4Average of Low-Income Economies, 1993 (WDR 1995) 3.6 5.5

Notes: "Low-Income Economies" are all those economies classified as such by the World Bank; in 1993,1 heirweighted-average GNP per capita was US$380 (US$300 excluding China and India). Pakistan,with a GNP per capita of US$430 in 1993, was classified as a low-income economy.____

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2.04 Undernutrition among infants, young children, and women ofchildbearing age is also a major health concern. The 1991 Demographic andHealth Survey estimated that about half of children age 5 and younger showedevidence of undernutrition (they were stunted, wasted, or underweight), andthat some 35 percent of pregnant and lactating women were underweight. About30 percent of children had low weight at birth. These nutrition indicatorsare worse in Pakistan than in many countries with comparable income levels.Micronutrient deficiencies of iron, iodine and Vitamin A are also widespread.Such deficiencies have serious implications for health. Iron deficiencyanemia increases the risk of death related to childbirth; Vitamin A deficiencycan lead to blindness; iodine deficiency increases the risk of neonatal deathand also leads to mental retardation.

2.05 Another way of looking at the health status of a country is toestimate its total Burden of Disease (BOD). The BOD is an aggregate measureof the years of healthy life lost by a population due to all episodes ofdisease and injury occurring in a given year. Preliminary estimates ofPakistan's BOD conducted for this note suggest that the BOD in Pakistan,standardized by population size, is about three times the average figure forestablished market economies. Comparisons with other low-income countriesindicate a mixed picture: Pakistan's BOD is lower than that of Sub-SaharanAfrica and about the same as in India, but much higher than in China. Thecomposition of Pakistan's BOD indicates that about 50 percent of the diseaseburden is accounted for by communicable diseases and maternal and perinatalconditions .4

2.06 To summarize this brief discussion of health indicators, it can besaid that the health status of Pakistan's population remains poor. This istrue even by comparison with average low-income country indicators.Improvements have occurred in the past three decades, but the pace ofimprovement has not been satisfactory.

Factors Behind Poor Health

2.07 The factors behind poor health status in Pakistan are many. Themost inmportant are:

(a) Poverty. Pakistan has had good growth for several decades, but isstill a poor country. The most recent estimates of consumption povertyindicate that in 1990/91 about 34 percent of the population had levelsof consumption below a poverty line of about Rs. 300 per capita permonth at prices of that gear (US$12 equivalent at the then prevailingofficial exchange rate). Poverty negatively affects health statusthrough constraining the ability of households to purchase varioushealth-related services and goods.

(b) Education. Pakistan has lagged behind badly in terms of educatingits population, and this is more so with regard to women. Lack ofeducation results in poorly educated consumers of health services andconstrains the adoption of key disease-prevention behavior. Pakistan is

4/ Pakistan's BOD is further discussed in Chapter III. A detaileddisaggregation of our BOD estimates is given in Annex 3.

5/ See Pakistan Poverty Assessment, World Bank, September 1995.

now making a major effort to upgrade the educational status of itspopulation, and especially of women, under the Social Action Program.

(c) The low status of women. In addition to their extremely low levelsof education, women in Pakistan are constrained in seeking health carefor themselves and their children on account of their restrictedmobility. In many rural areas, women are not permitted to leave thehouse or village and are subject to severe restrictions in theirinteractions with any males from outside their immediate family andcommunities. In recent years, under the Social Action Program, thegovernment has started to address this problem through the developmentof community-based health care services with female workers.

(d) Inadequate sanitation and water supplies. The large burden ofinfectious disease in Pakistan is closely related to lack of adequatesanitation facilities and safe sources of potable water for manyhouseholds. It is estimated that, at present, only about 55 percent ofrural households have access to safe water; about one-fourth have

6sanitation facilities. Improving access to safe water and sanitationfacilities is another area of focus under the Social Action Program.

(e) The poor quality of health services. Both government and privatehealth services suffer from serious quality deficiencies, as discussedin the remaining chapters.

2.08 The improvement in health status in the past 2-3 decades (para.2.01) is probably accounted for by progress in some of the factors identifiedin the previous paragraph. It is clear, for example, that consumption povertyhas declined since the early 1970s . Education levels have also beenimproving, albeit slowly. There has been some progress in terms of access tosafe sources of water and availability of sanitation facilities. And theaccess to health services in rural areas has improved, with the establishmentof an extensive network of government rural health facilities and someoutreach services since 1970. Private health services have been expandingtoo, although they continue to be located mostly in urban areas.

B. Recent Government Health Expenditure Trends

2.09 Total government expenditure on health as a percentage of GDPdeclined between 1991/92 and 1997/98, from 0.76 to 0.71 percent of GDP (orfrom 0.82 to 0.78 percent of GDP if expenditure on the population welfareprogram is added; Table 1, Annex 5). The percentage of total government healthexpenditure in relation to GDP in Pakistan is very low by Asian standards; astudy of twelve Asian countries in the late 1980s estimated the mean of thispercentage at 1.3 percent.8

6/ Report of the Chief Ministers' Committee on SAPP II, Planning andDevelopment Division, Islamabad, September 1996.

7/ For a discussion of this point, see Pakistan Poverty Assessment, WorldBank, September 1995.

8/ See Health Care in Asia, by Charles C. Griffin, World Bank, 1992. Thetwelve countries in the study were Bangladesh, China, India, Indonesia, Korea,Malaysia, Myanmar, Nepal, Papua New Guinea, Philippines, Sri Lanka andThailand.

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2.10 The share of the Federal Ministry of Health in total governmenthealth expenditure (federal plus provincial/area expenditure combined) hasincreased over the period, from 14 percent in 1991/92 to 17 percent in1997/98. The main reason for this increase was the introduction of thefederally-funded Prime Minister's Program for Family Planning and PrimaryHealth Care, to provide community-outreach health care and family planningservices; this program now accounts for about 6 percent of total governmenthealth expenditure on health.

2.11 In absolute terms, total government health expenditure more thandoubled during the period, from Rs. 9,233 million in 1991/92 to Rs. 20,943million in 1997/98 (Table 1, Annex 5). However, there was considerableinflation in the period. Comparison between 1991/92 and 1997/98 shows anincrease of 19 percent in real terms over the entire seven-year period (Table2, Annex 5). On a per capita basis, and again in real terms, governmenthealth expenditure remained approximately constant over the period.

2.12 It is also important to examine the evolution of (government)health expenditure in relation to total public expenditure for each of thefour provinces. The picture that emerges is far from uniform (Table 3, Annex5). In Balochistan, there was a clear upward trend in the percentage of totalprovincial expenditure allocated to health, from 5.7 percent in 1991/92 to 8.2percent in 1997/98. The trend has also been up in Punjab, from 7.4 percent in1991/92 to 7.8 percent in 1996/97 and 8.8 percent in 1997/98, although it hasnot been as sustained as in Balochistan. In NWFP, there was an upward trendthrough 1996/97, from 7.6 percent to 8.7 percent. However, this trend hasbeen sharply reversed in 1997/98 (7.4 percent). In Sindh, on the other hand,there has been a clear downward trend, from 8.5 percent in 1991/92 to 6.5percent in 1996/97 and 7.0 percent in 1997/98.

C. Health and the Social Action Program

2.13 In the early 1990s, awareness about Pakistan's poor performance inthe social sectors became more acute. A major outcome of this increasedawareness was the launching by the Government in 1993/94 of the Social ActionProgram (SAP). The SAP aims at improving the access to and quality of basicsocial services in four sectors: primary education, primary health, ruralwater supply and sanitation, and population welfare. The SAP is supported byseveral donors, including IDA.

2.14 For the purposes of SAP, primary health care was defined asincluding basic services provided at the community level , at first-level carefacilities (Basic Health Units, Urban Health Units, Rural Health Centers,Maternal and Child Health Centers, Dispensaries), some Tehsil HeadquartersHospital services, all preventive programs, the training of paramedicals, anddistrict management functions. Population welfare was defined as theprovision of family planning services and related information, education andcommunication activities. (Starting in 1997/98, the definition of whatconstitutes the SAP part of health services has been expanded to include thefirst level of referral).

2.15 In the primary health care/population welfare sectors, SAP soughtto achieve two broad objectives:

(a) To increase the real level of government expenditure, with specialemphasis on non-salary inputs (which is needed to improve quality); and

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(b) To improve program design and strengthen implementation capacity inthe sectors.

The two broad objectives are complementary. Achieving the objectives wouldlead to an expansion in coverage and use of basic health/population servicesas well as an improvement in service quality and impact.

Increased Expenditure

2.16 SAP has been successful in increasing the priority given toprimary health care within the overall government health sector. Nationwide,SAP health expenditure as a proportion of total government health expenditurerose from 40 percent in 1993/94 to an average of 50 percent in the period1994/95-1996/97 (Table 4, Annex 5). In 1997/98, budget allocations for SAPhealth expenditures amount to 58 percent of total government healthexpenditure. However, the 1997/98 figures are not strictly comparable withprevious years' figures because of the expansion in the definition of "SAPHealth" (para. 2.14 above). If the first level of referral had been excludedfrom SAP health expenditures in 1997/98, the proportion of SAP to total healthexpenditure in 1997/98 would have been about 55 percent.

2.17 The increase in the proportion of SAP health expenditure has beenmuch less pronounced for current than for development expenditures. This iswhat one would expect; whenever there is a shift in public expenditurepriorities in any sector, it would initially be reflected more strongly in thedevelopment budget than in the current budget.

2.18 In absolute terms and in constant prices, nationwide SAP healthexpenditure was about 35 percent higher in the 1994/95-1996/97 period ascompared with 1993/94, and it would be about 60 percent higher in 1997/98 thanin 1993/94 if SAP budgeted expenditure is fully executed(Table 4, Annex 5).

2.19 SAP has also been successful in raising the level of expenditurein the program of the Ministry of Population Welfare. Expenditure increased byabout 30 percent in real terms between 1993/94 and 1996/97, and would be abouttwo-thirds higher in 1997/98 relative to 1993/94 if budgeted expenditure in1997/98 is fully executed.

2.20 SAP has been less successful in achieving another importantobjective it set for itself in the health sector, namely, to increase thepriority given to the non-salary budget within the total current budget.Overall, the ratio of non-salary to total current budget (within the SAP sub-sector) was the same (0.30) in 1996/97 as in 1993/94 , and is projected at thesame level in 1997/98(Table 5, Annex 5). The evolution of the ratio variesacross provinces and areas, however. The data show increases in the ratiobetween 1993/94 and 1996/97 for the Northern Areas (from 0.14 to 0.30), AzadJammu and Kashmir (from 0.25 to 0.34), FATA (from 0.11 to 0.24), and Punjab(from 0.28 to 0.32); while it shows declines for Sindh (from 0.23 to 0.21),NWFP (from 0.43 to 0.30), and Balochistan (from 0.39 to 0.35).

2.21 In absolute terms, and measured in constant prices, non-salarycurrent expenditure in the SAP health sector was 29 percent higher in 1996/97as compared with 1993/94(Table 4, Annex 5). In 1997/98 it would be 45 percenthigher than in 1993/94, as per budget estimates and projected inflation rate.

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Programmatic Improvements

2.22 Policy and institutional reforms to improve health/populationprograms during the first phase of SAP focussed on seven areas: (i)strengthening of planning capacity, (ii) strengthening of in-service trainingcapacity, (iii) decentralization of administrative and financial powers, (iv)reduction of gender imbalances in staffing, (v) introduction of community-based services, (vi) expansion of DOHs' participation in the populationprogram, and (vii) reorganization of primary health care services. A briefreview of the main accomplishments is given below.

2.23 Strengthening of Planning Capacity. Some progress has beenachieved in this area. Planning Cells have been established in all provincialDepartments of Health, and these cells have played a key role in thepreparation of the annual operational plans under SAP. Situation analysisreports have been produced in each province. Mapping of health facilities hasbeen carried out. Progress has been made in expanding the coverage of thehealth management information system (HMIS), although substantial gaps remain.A first attempt at formulating health sector strategies has been made inconnection with the preparation of the second phase of SAP. District-levelplanning has started on a pilot basis. At the same time, it is clear that thePlanning Cells need to be enlarged and strengthened in order to be able tocope adequately with the many demands made on them --including those made bydonors. It is also necessary to achieve a closer integration between the workof the Planning Cells, which are housed in the Secretary's office, and theplanning work in the rest of the DOH's organization.

2.24 Strengthening of In-Service Training Capacity. During SAPP I, aculture of in-service training of primary health care staff and theirsupervisors was established. Now in-service training is a regular feature inall provinces, both for development of technical skills and management skills.Fifty-five in-service training schools have been established all over thecountry. However, much work is still needed in order to improve quality oftraining.

2.25 Decentralization of Administrative and Financial Powers. Thisarea of reform seeks to improve decision making by delegating certainadministrative (mainly personnel management) and financial powers to managersat the district and rural health facility level (BHUs, RHCs). Progress so farhas been uneven across provinces, with Punjab and Sindh ahead of the twosmaller provinces. All provinces have developed proposals but implementationis just starting. Some managers appear to be reluctant to use their newlyacquired powers because they fear possible adverse consequences forthemselves. Moreover, the decentralization measures envisaged and taken sofar are modest; more radical decentralization alternatives may need to beconsidered to make a major impact on the efficiency of operations.9

2.26 Reduction of Gender Staffing Imbalances. This area of reformseeks to increase the numbers of female health care providers in order toimprove access to services by women and their children. Female health careproviders mainly include female doctors, lady health visitors (LHVs), ladyhealth workers (LHWs), and traditional birth attendants (TBAs). A number ofinitiatives have been taken, especially to improve front-line care. Training

9/ Issues of excessive centralization of management in the health sector andalternatives for decentralization are discussed in Chapter IV.

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capacity for LHVs has been increased. This has been complemented by variousmeasures to facilitate recruitment of students, including relaxation of agerequirements, allowing married women to enroll, enhancing stipends, and, inBalochistan, through an innovative scheme whereby high school girls areidentified and supported with stipends as future paramedical trainees. As aresult of the above actions, there has been an increase of about 30 percent inthe number of students enrolled in LHV schools at present as compared with1993/94.10 Several thousand TBAs have been given training. The provincesalso introduced additional incentives for female paramedics (e.g., bettercareer paths) in order to increase retention of these workers in governmentservice. Some special incentives have been introduced for female paramedicsserving in rural areas, but serious recruitment difficulties remain in many ofthese areas. Recruitment of fema:Le paramedics (and other staff) has also beenhampered during the first phase of SAP by extended recruitment bans. InPunjab, following the lifting of the recruitment ban, about 700 femaleparamedics and 350 female medical officers have been recently recruited. Butthe main development in terms of increasing the numbers of female healthworkers in recent years has been the introduction of the Prime Minister'sProgram for Family Planning and Primary Health Care (see next paragraph).

2.27 Introduction of Community-Based Services. The main developmenttowards increasing the numbers of front-line female health care providersduring the first phase of SAP has been the introduction in 1994 of the newcadre of LHWs. Forty-three thousand LHWs have been trained and deployed sofar, and preliminary results appear promising. LHWs are women recruited fromthe communities where they serve; as such, they provide a vital link betweenthese communities and the rest of the government health services.

2.28 Expansion of DOHs' Participation in the Population Program.Family planning services in Pakistan have been notoriously weak. One of thekey reforms envisaged for the first phase of SAP was the expansion of thenumber of provincial/area health facilities providing family planning services(i.e., in addition to those in the Ministry of Population Welfare program).In 1993/94, the first year of the Eighth Five year Plan, it was estimated thatabout 4,000 health outlets of provincial line departments were providingfamily planning services; the target in the Eighth Plan was to expand thisnumber to 6,000 by the end of 1994/95, and to over 7,000 by the end of theplan (June 1998).11 Since there are currently about 11,000 government health

12facilities nationwide', the target of 7,000 implies that roughly about two-thirds of all government health facilities would offer family planningservices by June 1998.

2.29 According to the estimates of the provincial Population WelfareDepartments (PWDs), the proportion of health facilities providing familyplanning services as of early 1997 was 60 percent in Punjab, 72 percent inSindh, 50 percent in NWFP, and 82 percent in Balochistan. A health facility

10/ SAP Sector Statistics 1992/93-1997/98, Multi Donor Support Unit,Islamabad, July 1997.

11/ Staff Appraisal Report of the Population Welfare Program Project, ReportNo. 13611-PAK, World Bank, February 1995, p. 27.

12/ Including hospitals, dispensaries, basic health units, maternity and childhealth centers, and rural health centers. See Statistical Supplement of thePakistan Economic Survey 1994/95, p. 302.

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is considered by the PWDs to be providing family planning services if it has astaff member trained in family planning methods and keeps contraceptives instock. Recent HMIS data, however, indicate that the proportion of reporting(first-level care) facilities which reported having actually provided familyplanning services in the respective quarter was only 28 percent in Sindh and16 percent in Balochistan; for Punjab it was 50 percent (in NWFP, the HMISsystem is not yet operational). This suggests that, in Sindh and Balochistanespecially, there are many facilities that meet the PWD definition forproviding family planning services but either do not have any family planningclients or are failing to report their family planning activities. This issuerequires further investigation. In all four provinces, a monitoring systemthat would enable to assess the quality of family planning services providedis not available.

2.30 Access to family planning services has been significantly enhancedin recent years through the deployment of community-based workers. The numberof Village-Based Family Planning Workers (a cadre of the vertical PopulationWelfare program) increased from a few hundred at the beginning of SAP to about6,750 by the end of 1996. Moreover, the 43,000 LHWs deployed since 1994 havefamily planning among their duties. There are indications that these effortsare already resulting in greater awareness and demand for family planning. InPakistan's environment, where the mobility of women is severely restricted inmany rural areas, these community-based approaches are a key element of theoverall strategy to provide family planning and other health care for mothersand their children.

2.31 Reorganization of Primary Health Care Services. Severalinitiatives were envisaged for the first phase of SAP that aimed atreorganizing primary health care services in order to make them moreefficient. An important one was the formulation of Essential Drug Lists(EDLs) for the various types of health care facilities. The EDLs have beenformulated, and procurement is now generally based on these lists. However,health facilities can still order drugs which are not in the lists, whichreduces the efficiency gains from using the lists.

2.32 A second reform that had been envisaged was the integration ofcertain vertical categories of workers into the general work program of theDepartments of Health. The categories in question are malaria workers andvaccinators in the EPI program (and their supervisors). The basic idea was tophase out the use of unipurpose outreach workers, and have instead a largernumber of multipurpose outreach workers. Each worker would cover a definedterritory within the catchment area of each first-level care facility.Progress has been very limited. Punjab and Balochistan have completed thecorresponding background study and developed proposals for integration. Theremaining provinces have not carried out their background studies.

2.33 A third reform envisaged was the development of systematiclinkages between community-level health care providers (TBAs and LHWs) andfirst-level care facilities (BHUs, dispensaries and RHCs); as well as betweenfirst-level care facilities and first-referral facilities. The objective isto be able to provide better integrated and more effective primary careservices, from the community level up to and including the first level ofreferral. Sindh and NWFP have made progress in this direction. In bothprovinces, selected areas have been identified to pilot a new, betterintegrated and better resourced model of primary care services, known as the

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"area focus approach"."3 In Sindh, the DOH has selected one RHC from each ofthe 21 districts, which will be the nucleus of a unit of primary careservices, also comprising 4-5 surrounding BHUs/MCH centers and all of the LHWsand trained TBAs in the area. In addition to developing systematic linkages,the pilot includes in-service training to develop staff skills; ensuring thefull staffing of the facilities in the pilot area; ensuring that thefacilities are in good shape with regard to buildings and equipment; andestablishing a monitoring system to track progress. Work on various aspectsof the pilot has started. A similar pilot project has been started in NWFP.

2.34 All four provinces had undertaken to carry out studies of thereferral system. The studies have been completed in Punjab, Sindh andBalochistan. Improvement of the referral system is expected to be one of theareas of reform during the second phase of the Social Action Program.

13/ These pilot efforts are part of the IDA-assisted Family Health Project.

13

CHAPTER III: SETTING PRIORITIES FOR GOVERNMENT FINANCING IN HEALTH

A. The Current Burden of Disease

3.01 Background work for the preparation of this report included astudy of the Burden of Disease (BOD) . While this study faced serious datalimitations, it should give a reasonably accurate picture of the totalmagnitude and distribution of the BOD in Pakistan.

3.02. BOD studies measure the losses of healthy life in the form ofdisability and premature death, due to all episodes of disease and injuriesoccurring in a given year. The total BOD in Pakistan in the early 1990s wasabout 350 disability-adjusted life years (DALYs) per 1,000 population peryear. This is lower than the corresponding figure for Sub-Saharan Africa of575 DALYs per 1,000 population in 1990 and about the same as India(344/1,000), but much higher than China (178/1,000). It is about three timesthe figure for established market economies (117/1,000)2 The distribution ofPakistan's BOD among broad categories of disease/injuries is given in Table3.1 below.3

3.03. As can be seen from the table, 50 percent of the disease burden inPakistan is still accounted for by communicable diseases (38.4 percent) andmaternal and perinatal conditions (12.5 percent). These are the categoriesfor which medical science has been most successful in identifying ordeveloping effective and affordable prevention and treatment interventions,which generally require only modest levels of skills and resources. Dramaticimprovements in health status could be achieved in Pakistan if suchinterventions were more widely applied. The main ones include standard publichealth measures such as health and nutrition education, provision of cleanwater and sanitation; immunization; and maternal and child health careprograms consisting of family planning, pre- and post-natal care, deliveriesby trained health personnel, and management of the sick child (especially fordiarrhea, acute respiratory infections and malnutrition).

3.04 Cardiovascular diseases account for another 10 percent of thetotal BOD. These diseases are less easily treatable; the most promisingapproach would be health education campaigns to prevent their onset. Anti-smoking campaigns and nutrition education to promote a healthier diet would bethe main types of health education aimed at preventing cardiovascular disease.

3.05 Also important are injuries, which account for about 11 percent ofthe total BOD. Their incidence could be reduced through public educationprograms on accident prevention, better work safety requirements, betterautomobile safety requirements, and other similar preventive measures.

1/ This is the first time that such estimates are made for Pakistan. For adetailed explanation of the concept of Burden of Disease, see the 1993 WorldDevelopment Report, Investing in Health, World Bank.

2/ World Development Report 1993, World Bank, page 27.

3/ See Annex 3 for a more detailed disaggregation and explanation of datasources and limitations.

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--------------------------------. _------------------------------------__-----__

Table 3.1. Pakistan - Distribution by Cause of the Burden of DiseaseIn Percentages of the Total Number of DALYs Lost in a Given Year

(Early 1990s)

Communicable Diseases 38.4%-Infectious and Parasitic (20.4%)-Respiratory Infections ( 8.1%)-Childhood Cluster ( 6.7%)-Sexually Transmitted ( 2.2%)-Tropical Cluster ( 1.0%)

Non-Communicable Diseases 37.7%-Cardiovascular (10.0%)-Nutritional/Endocrine ( 5.8%)-Malignant Neoplasms ( 4.3%)-Congenital Abnorma:Lities ( 3.5%)-Digestive System ( 3.4%)-Chronic Respiratory ( 3.2%)-Neuro-psychiatric ( 2.6%)-Other Non-communicable ( 4.9%)

Maternal and Perinatal Conditions 12.5%-Maternal ( 2.8%)-Perinatal ( 9.7%)

Injuries 11.4%

Total 100.00%

Source: World Bank estimates.Notes: Infectious and parasitic diseases include tuberculosis, diarrhealdiseases, meningitis, hepatitis, leprosy, trachoma, intestinal helminths,malaria, and other miscellaneous diseases. The childhood cluster includesmeasles, pertussis (whooping cough), polio, diptheria and tetanus. Thenutritional/endocrine category includes anemia, protein-energy malnutrition,iodine deficiency and Vitamin A deficiency.

B. The Health Delivery System

3.06 The health delivery system in Pakistan is a mix of public andprivate providers. Provincial, Federal and some local governments operatetertiary care hospitals in the larger urban areas. In rural areas and smallertowns, the Provincial governments (and the governments of FANA, AJK, ICT andFATA) operate an extensive infrastructure of first-care facilities andsecondary care hospitals, supported by several federal programs including thecommunity-based Lady Health Workers' program. Local governments and NGOs playonly a modest role in the provision of primary health care in both urban andrural areas. The Government is by far the major provider of hospital servicesin rural areas, and it is also the main provider of preventive care throughoutthe country. The Ministry of Population Welfare operates its own network offamily welfare centers for the provision of family planning services.

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Government Health Services

3.07 The public (i.e., government) health delivery system is composedof four tiers: (i) outreach and community-based activities, which focus onimmunization, sanitation, malaria control and maternal and child health andfamily planning; (ii) primary care facilities, mainly for outpatient care;(iii) tehsil (i.e., subdistrict) and district headquarters hospitals for basicinpatient care and also outpatient care; and (iv) tertiary care hospitalslocated in the major cities for more specialized inpatient care. Primary carefacilities are mostly managed by a Medical Officer, except for Maternity andChild Health Centers, which are managed by a Lady Health Visitor (LHV), anddispensaries, which are generally managed by dispensers.

3.08 Basic Health Units (BHUs) provide curative and preventive servicesfor a catchment population of about 10,000-20,000 people, and are typicallystaffed by a Medical Officer, a LHV or Female Medical Technician, a MaleHealth Technician, a trained Midwife or unqualified midwife (dai), adispenser, a sanitary inspector, a vaccinator and 2-3 nontechnical staff(guard, sweeper, etc). Rural Health Centers (RHCs) provide more extensiveoutpatient services and some inpatient services, usually limited to short termobservation and treatment of patients who are not expected to require transferto a higher-level facility. They serve catchment populations of about 25,000-50,000 people, with about 30 staff including several doctors and a number ofparamedical staff. They typically have 10-20 beds, x-ray facilities,laboratory, and minor surgery facilities. Tehsil Headquarters Hospitalsprovide basic inpatient services as well as outpatient services. They serve acatchment population of about 100,000-300,000 people. They typically have 40-50 beds and appropriate support services including x-ray, laboratory andsurgery facilities. Its staff may include several specialists such as ear,nose and throat specialist, ophtalmologist, gynecologist, and a generalsurgeon. District Headquarters Hospitals serve catchment populations of about1 to 2 million people and provide a range of specialist care in addition tobasic hospital and outpatient services. They typically have about 80-100beds. In NWFP and Balochistan, catchment populations and sizes of tehsil anddistrict headquarters hospitals are smaller.

3.09 The District Health Officer (DHO) is responsible for all healthservices in his district. Managers of all Tehsil Headquarters Hospitals andfirst-level care facilities report to him. District Headquarters Hospitalsare headed by Civil Surgeons, who, as well as DHOs, report to the DirectorGeneral of Health at the provincial level. Tertiary care hospitals aredirectly under the provincial Secretary of Health.

Private Health Services

3.10 The private health services sector is dominated by more than20,000 "clinics", the small, office-based practices of general practitioners.Other private sector facilities also tend to be small. These include morethan 300 maternal and child health centers (also known as maternity homes);about 350 dispensaries, which are outpatient primary health care facilities;and more than 450 small to medium-size diagnostic laboratories. There arealso more than 500 small and medium-size private hospitals with about 30 bedsper hospital on average. They are equipped only for basic surgical,obstetric, and diagnostic procedures, and concentrate on low-risk care. In

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addition, there are a few large private hospitals, mainly run by NGOs andlocated in major cities. 4

3.11 Private health services are concentrated in urban areas. Onlyabout 30 percent of all private health facilities (mostly clinics anddispensaries) are located in the rural areas, where about 70 percent of thepopulation reside. Private urban hospitals are mostly concentrated in ninelarge cities.5 These cities account for more than 75 percent of privatesector hospital beds.

3.12 The quality of care in large private hospitals ranges fromreasonable to good. In smaller commercial hospitals, MCH centers, andclinics, however, the quality of service is often very poor. This poorquality is reflected for example in the use of outdated equipment, and in thesevere shortage of nurses and paramedical staff and the use of untrainedpersons in their stead. Less than half of the doctors, nurses and paramedicsworking in the private sector are registered in the official registers ofthese professions; the rest either have no formal training or have failed toregister (or allowed their registration to lapse). The private sector staffmix is highly skewed; about 40 percent of the technical work force aredoctors, but less than 10 percent are nurses.

3.13 Another very important segment of the private health care sectorare pharmacies and other (non-pharmacy) retail outlets sellingpharmaceuticals, such as grocery shops. In the late 1980s, there were about11,000 pharmacies nationwide, of which only 19 percent were in rural areas.Rural areas are served mainly by non-pharmacy retail outlets. Those runningthese retail outlets have no training in pharmacology; in addition, they oftenengage in the practice of medicine (as is shown by survey data). Powerfulantibiotics and other drugs are thus freely available over the counter,without the need for a prescription from a qualified medical doctor.

3.14 In addition to shop owners, many others practice medicine inPakistan with little or no training. Casual observation (e.g., during thefield visits conducted for this report) suggests that, in many rurallocalities, the number of untrained "doctors" practicing medicine greatlyexceeds that of trained physicians. Traditional or informal sector providersalso dominate in the area of reproductive health, with only about 20 percentof women being assisted by an appropriately trained provider during delivery.To improve on the latter situation, a program is in place to train traditionalbirth attendants in clean delivery, referral of complications, nutrition andbreastfeeding counselling. In the last two years, 3,500 traditional birthattendants have been so trained, with a target of having one trainedtraditional birth attendant for each village in the country.

3.15 There has been no survey of NGOs working in the health sector inPakistan. However, the predominant view appears to be that: (i) the number ofNGOs operating in the health sector is small; (ii) most of them are very small

4/ Pakistan Health Sector Study, World Bank, June 1993. The figures quoted inthis section are from the Census of Health Facilities conducted by the FederalBureau of Statistics in 1988. Current numbers of private facilities areprobably much larger than indicated here.

5/ Abbotabad, Faisalabad, Hyderabad, Karachi, Lahore, Multan, Peshawar,Quetta, and Rawalpindi/Islamabad.

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in size, and (iii) they are heavily concentrated in urban areas. A notableexception to (iii) is the Aga Khan Health Services program, which has beensuccessful in implementing its community-oriented primary health care model intwo districts of the Northern Areas. As is the case with NGOs in general,many of the NGOs in the health sector are the product of a visionary andcommitted individual and lack a broad institutional base. There has been sofar little government assistance to them, although a start has been made underthe SAP's Participatory Development Program.

C. Health Services Coverage and Utilization

Preventive Services

3.16 The main preventive programs in Pakistan include: (i)immunization; (ii) maternal and child health services; (iii) family planning;and (iv) the Lady Health Workers program (officially known as the PrimeMinister's Program for Family Planning and Primary Health Care). Although thesituation has improved in recent years, preventive services have had a lowpriority in Pakistan. An indication of this low priority is the fact thatrecurrent expenditures of preventive services are financed to a large extentfrom the Development budget rather than the Current budget.

3.17 Immunization Program. The expanded program of immunization (EPI)includes vaccination for young children against measles, diphteria, pertussis,tetanus, polio and tuberculosis. It also includes vaccination against tetanusfor pregnant women. Vaccination in the public sector is provided through acombination of vaccination in static health facilities and outreachvaccinators (operating out of static facilities or in mobile teams). The mostrecent comprehensive estimates of immunization coverage for children are fromthe 1995/96 PIHS. Nationwide, according to this survey, 78 percent ofchildren 5 years and younger have had at least one immunization (up from 70percent in 1991, i.e., as compared with the 1991 PIHS). The percentage ofchildren 5 years and younger who are fully immunized against the above listedsix diseases was only 54 percent in 1995/96, however (up from 25 percent in1991).6 Immunization coverage against tetanus toxoid of childbearing agewomen was only 14 percent in 1995 according to Ministry of Health estimates.

3.18 Maternal and Child Health Services. In addition to immunization,other preventive services for mothers and their children include prenatalcare, supervised deliveries, growth monitoring, nutrition education, andhealth education (e.g., to teach mothers to recognize serious common diseasesin young children). The government health sector still gives maternal andchild health services much less priority than they deserve. Of 134 ruralhealth facilities sampled in the 1995/96 PIHS, one-third did not have anyfemale staff --a precondition for provision of effective maternal and childhealth services. An earlier, 1993 survey of 89 randomly selected rural health

6/This figure refers to the number of children who reported having receivedfull immunization and who also have an immunization card, expressed as apercentage of all children aged 5 years and under. See the report from thePakistan Integrated Household Survey, Round 1: 1995/96, Federal Bureau ofStatistics, Islamabad, October 1996.

7/ Situation Analysis of Health Sector in Pakistan, Ministry of Health,Islamabad, December 1995, page 41.

18

facilities nationwide showed that, among other findings: (a) only 8 out of 89facilities were doing growth monitoring of children; (b) nutrition educationand demonstration sessions were reported in only 10 facilities; (c) 34facilities were not providing any maternal and child services because of nonappointment of a Lady Health Visitor; and (d) only 33 facilities maintainedrecords of providing antenatal care.8

3.19 Family Planning. The government health sector has also failed tomake family planning services widely available. As noted above, many ruralhealth facilities do not have any female staff, which is a precondition forprovision of family planning services. And the proportion of healthfacilities not yet providing family planning services is still high (para.2.29). Recent surveys also suggest considerable unmet demand for familyplanning; in 1994/95, fifty-two percent of all women of reproductive agedesired no more births (up from 39.9 percent in 1990/91), but only 17.8percent were using a method of contraception (up from 11.8 percent in1990/91) .9 Availability of family planning services has improved in recentyears with the deployment of the Lady Health Workers (see below). TheGovernment of Pakistan is a signatory of the Cairo Declaration which followedthe International Conference on Population and Development (ICPD) of 1994.The ICPD program of action aims to ensure that all couples and individualshave access to an appropriate range of services to protect reproductivehealth. In line with its commitment to implement the ICPD program of action,the Government is in the process of planning and implementing a number ofreforms (see Box No. 1).

3.20 The Lady Health Workers Program. This is a recent Federal programfor the deployment of community-based female health workers in villages andselected urban areas. Up to the end of 1996 43,000 LHWs had been deployed,with a final target of 100,000 (each LHW covers a population of 500-1000).The LHWs are recruited from the communities where they provide services.Services are mostly preventive, and they include health and nutritioneducation, health monitoring, referrals and family planning. Most of theservices are focussed on women and young children. The LHW program has beenvery valuable in extending coverage of preventive services. Because the LHWsare from the communities where they work, and because they are women, they areable to have close interaction with the women in the community, and throughthem reach the children as well. Preliminary indications are that the programis working well and is appreciated by the beneficiaries.

Curative Services

3.21 Curative services include both outpatient and hospital inpatientservices. The provincial governments have developed an extensiveinfrastructure of health facilities providing curative services (and, to alimited extent, preventive services as well) in both urban and rural areas.According to the 1995/96 PIHS, for Pakistan as a whole, 34 percent of allrural communities surveyed had access to a government dispensary within aradius of 5 km; 39 percent had access to a BHU within the same radius. Thissuggests that the majority of these communities had access to at least one

8/ Utilization of Rural Basic Health Services in Pakistan, Ministry of Healthand WHO, Islamabad, 1993.

9/ 1994/95 Pakistan Contraceptive Prevalence Survey, Population Council,Islamabad.

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first-level care facility within a radius of 5 km. Moreover, 42 percent ofall rural communities surveyed had access to a government hospital within a 10

'km radius.10

M*ovng w a r tiv th Approach

'-'''.''.' lthough'..-the' min: rep'ibility :'for''' cinia f"'ami'y pannin serice-'.h.-.i-'-. .in Pa a ' ha` htrica b fen-asigned tog e " init o .t

-h'.,'., the p r nci De'arten 3 lth: av e' ee. incresing t.h '- "...--'.,... fa'"',:,'..,lan* partici~~~~~~~;pat;on: intis: area. They. have_: now ma"Th.,.de':: a comitmen to6 of fer

family pl.anning :evce :nall: of: their :facilitie asso a osble

an"":.-..''", t':.- gr'.-adually',,-' move: towards o-f,feringi.'- an'' appropriatei range :-f :::-:- r oductie he-alt evies throughout t-'he- cuntry:'.-''' or-.the Nh ''F i':e

:Yeara kln 1: 198-2a te ff'overnment hssta,,'. .im"pro'e r:prohealt -increa'se' contae ptive- p' reva"'e..-''':(-.'i{'parti,cuary ea:rlier riuse. of modern'. temp'.ra'y method, ::and t'hus:. ,grtadua.lL :rede t he.rat of population growth.' , his-wi r e'iri ' clsecol[a.orat -ou etween the publIc asectr, non-g ver enta o- r aniao,a,d.', '--the p-rivate sector.; 'Key strategesi to be:pursued' inen :h

-- * Ensuring a- continuous supply of c ntractv a al bi senctr

e -iv ery pn ts, as well' as essential, , dr-ug forth'et m:t',eatment o',,:',',sex u.ally ''trns'm.tt:4 i..nf'ectio'ns,-.an ,dothe-r elat.e.d--supplies-.--.This''will

-. --r.e.'qui're..e.nhan 'ce coperatdionpubetweentheMinistryofPoulatio Welf..-:n.d..th'e governm.ent healtubseric es, w'th,povincial ::'Departmenso'--.eLthaking-incrased,- rspO sibi-lity for.ensu rng.tha:ts-upp ies'ar

nunmaiunutained:- -- :.,.'..--*.:Rec-ruiting.and retain--t-ig g-qualifaiede-staff f:(particularly women-), in-:t-he.

n'.,.',',-bter,s-,:qired fr widespead avilability of':services-.,'---.''-.. * Ensuring that -th-e'-staff- are consistentl'y--o'n- duty, n htsrie

.ar,e.-pr.,o.v.-ided.-in,.as aer.': ha shows esre.pec t for alcli e ts.'En':-ring that services o'ffere at the fir't. leel o '-erra .are..able'

to-c,ter effectively forobstetric :emergencies:a. -reted .su gical..---ii.., 'pro'".'dures.-'-,,"'"' r'.tes: of ' ' ' -,'-.-. -i-l* Even st othero -ifectin ar low .at- presen , ensur n t-hatap...ro'"",' priate opr''''-"'ograms- a're estabtishied-:to' reduce- tran mssion among -ke-y.. .. t .arge.t ..... groups....:.., stabishingappropriate-.linka:g-e betwee government' traditiona midwiv's".and':practitiners,rao- eoura b.est e wpai c,

... irove coll oration,:and:facilitap ro ents at.--: ri'sk....,.:.:.-:'..--- - ,: :: . :- : : .-

* iEncraging -the ac.tiv.e involvement ofnon-governmentalorganizationsad' the p:tkriva'.,. treasetr esponsuringb thayt -fappropriatehminimum linical:.standards areestablished and maintained.i

3.22 While access to government health facilities is generally good,utilization levels are low. The previously quoted study by WHO/Ministry ofHealth found that, in the last working day preceding the survey, the average

10/ This pattern probably overesa the degree of access of the generalpopulation. Dispersed population, not residing in "rural communities"(essentially villages), would presumably have less access than suggested byPIHS figures.

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number of outpatients seen at a RHC was just 34; for BHUs, the correspondingfigure was 24.11

3.23 Information on numbers of patients was also collected from thesample of 40 facilities surveyed for a cost study carried out as background tothis report. This is shown in Table 3.2 below. The low numbers of outpatientvisits per doctor, combined with the low bed occupancy rates, are indicativeof considerable unutilized capacity up to the District Headquarters Hospitallevel.

Table 3.2. Pakistan - Utilization of Government Health Facilities, 1995/96

BHU RHC THQ DHQ________________________

Number of Facilities in Sample 14 12 6 8Outpatient Visits/Facility/Year 6,993 18,305 55,756 133,858Outpatient Visits/Facility/Week 134 352 1,072 2,574Average Number of Doctors 1.4 3.6 21 33Outpatient Visits/Doctor/Week 96 98 51 78Inpatient Admissions/Facility/Year 295 1,172 2,460Mean Bed Occupancy Rate 19% 35% 34%

Source: World Bank cost study of health facilities. BHU = Basic Health Unit;RHC = Rural Health Center; THQ = Tehsil Headquarters Hospital; DHQ = DistrictHeadquarters Hospital. Outpatient visits reported above are for curativeservices only.

3.24 Household survey data indicate that most people seek care fromprivate providers when they fall ill (at least for first outpatientconsultation). Table 3.3 below shows the distribution of first consultationsby type of provider resulting from the 1991 PIHS. As can be seen from thetable, nationwide, just 21 percent of first consultations were with governmentproviders, mostly hospitals (there were, however, important differences amongprovinces; the percentage of patients using government facilities ranged froma low of 16 percent in Punjab to a high of 38 percent in Balochistan). Thelargest group, at 46 percent, reported seeing private doctors. It is likely,however, that a significant proportion among this group are not actuallyseeing trained medical doctors. In Pakistan, because of weak medicalpractitioner regulation, there are many individuals in the private sector whopass themselves off as "doctors" but who have received in fact little or nomedical training. Thus the figure shown in the table of 29.9 percent of firstconsultations taking place with untrained private providers is almostcertainly an underestimate.

3.25 Tabulations from the 1995/96 PIHS show results similar to thoseobtained from the 1991 PIHS: a government health provider was consulted by

11/ Ministry of Health and WHO, Op. Cit, Islamabad, 1993. The sample size was23 RHCs and 58 BHUs.

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only 20 percent of persons seeking health care for illness or injury in the 30days preceding the survey.

3.26 There is, of course, nothing wrong with people using privatehealth care providers, provided that they have the required training. This isin fact a good thing, since it releases fiscal resources that can then beallocated to other high-priority uses for which there are no privatealternatives. But when a large proportion of the population are usinguntrained health care providers, that is not a good state of affairs. In manyrural areas, trained private health care providers are not available. Thus,in theses areas it would be desirable to improve the quality of governmenthealth services to make them more attractive relative to untrained privateproviders. This could be complemented by efforts to educate people as healthconsumers and in particular to make them aware of the dangers of resorting tountrained health care providers.

3.27 The 1995/96 PIHS inquired about the reasons people had not tovisit government facilities for treatment of illness or injury. Thedistriblution of responses was as follows: too far away, 33 percent; medicinesnot available, 20 percent; staff not cooperative, 11 percent; cannot treatcomplications, 8 percent; doctor not available, 7 percent; other, 21 percent.This pattern of responses suggests that in order to make government servicesmore attractive to the public it would be necessary to take steps to improveoutreach (as is indeed being done under the Lady Health Workers program); toreduce absenteeism and improve staff's attitudes towards patients (which isbasically a matter of accountability, supervision and in-service training); toequip staff to better deal with complications themselves or to refer patients(a matter of improving staff training and developing the referral system); andto ensure that medicines are always available.

3.28 It can be concluded that there is clearly a great deal of room forimprovement in utilization (and consequently efficiency) of government healthfacilities. There is capacity in the system to deliver services to muchlarger numbers of patients with the existing facilities and personnel,provided of course that personnel can be made to be present and perform theirduties during the entire time they are obligated to do so by their terms ofemployment. There is also a large pool of potential users who are now seeinguntrained private providers.

3.29 The extra cost of treating these additional patients in governmentfacilities would be the incremental expenditure for drugs and supplies (plusthe cost of deploying female paramedicals in those facilities presentlylacking such staff).

3.30 It is possible, however, that the compensation of staff ingovernment health facilities may have to be raised if staff were effectivelymade to perform their duties as per their terms of employment. In economicterms, it is possible that the compensation of some doctors in governmentemployment (and perhaps other cadres as well) may fall below the corresponding(private sector) opportunity cost. The reason is that these doctors would

12/ This survey also shows that 19 percent of those who fell ill or wereinjured in 1995/96 resorted to "self-care", i.e., did not consult a healthprovider of any kind. Without knowing more about the nature of theillnesses/injuries affecting this people, it is not possible to tell whetherthey should have seen a (trained) health care provider.

22

have to give up part of their income from private practice if forced to work afull workweek. Doctors who found themselves in such a situation (i.e., hadtheir government compensation fall below opportunity cost) would resign fromgovernment employment. It should be noticed, however, that it is likely that(private sector) opportunity cost varies widely among doctors in governmentemployment, depending on skills, initiative, contacts and other factors.Hence not all doctors would be in the above situation. What proportion wouldbe, and would thus resign, is not known a priori. But if many did, then itwould become necessary to increase compensation in order to retain sufficientnumbers in government employment.

Table 3.3. - Pakistan: Sources of Outpatient Health Care, 1991(First Outpatient Consultation)

Type of Provider Percentage of Cases

Government First-Level Care Facility 5.6%Government Hospital 15.5%

Total Government 21.1%

Private Doctor 46.3%Private Hospital 2.6%

Total Private, Trained 48.9%

Siani 1.7%Herbalist/Hakim 7.1%Compounder/Medical Store 19.7%Faith Healer 0.5%Other Untrained 0.9%

Total Private, Untrained 29.9%

Total 100.0%

Source: 1991 PIHS.

D. Cost of Government Health Services

3.31 Between June and August 1996, a joint exercise was conducted withthe Government of Pakistan to estimate the unit costs of curative andpreventive services provided in primary and secondary health facilities. Asample of 40 facilities (including 14 BHUs, 12 RHCs, 6 THQs and 8 DHQs) wasselected for the purposes of data collection. 14 This section presents a

13/ Note that, at present, the government does not have a problem fillingvacancies of general medical officers, except in remote areas. This impliesthat, given the present level of requirements on these medical officers, thecompensation of these officers (including, in addition to salary, the value ofthe expected pension, of housing, of the contacts they make because of theirgovernment jobs, etc.) is not below their opportunity cost.

14/ Of these 40 facilities, 13 were in Punjab, 11 in NWFP, 10 in Sindh and 6in Balochistan.

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summary of the results obtained. 15 Since the sample of facilities studied isnot a representative sample, the results should be interpreted as very roughestimates.

3.32 Costs of curative care were collected for a list of conditionswith a significant impact on the health status in Pakistan. These conditionsincluded: acute respiratory infection; diarrheal disease; tetanus;tuberculosis; polio; malaria; typhoid; hepatitis; intestinal helminths;complications of pregnancy; threatened abortion; gynecological infections;anemia; iodine deficiency; protein-energy malnutrition; road accidents; andother accidents. From the above data, estimates were made of unit costs percurative outpatient case (i.e., average for all conditions) at the varioustypes of facilities, as well as unit costs per inpatient admission. Inaddition to actual unit costs, estimates were also made of what those unitcosts would be if a full course of treatment in accordance with generallyaccepted professional standards was provided at government expense; these arereferred in this report as "normative" unit cost estimates. Preventiveservices studied included immunization, family planning, antenatal care, andgrowth monitoring.

Outpatient Services

3.33 Estimated actual unit costs for curative outpatient services arepresented in Table 3.4 below. Fixed costs include the costs of labor,equipmenit, administration (costs of repairs, maintenance, communications,stationery, and miscellaneous expenses), and buildings. Labor accounts forabout 72 percent of fixed costs for the entire sample, followed byadministration at 15 percent, buildings at 9 percent, and equipment at 4percent. Variable costs include the costs of medicines, laboratory tests andx-rays. In the case of medicines, only those medicines supplied from thefacilit:Les' own stores are included in the actual cost estimates in Table 3.4.Similar:Ly, only those laboratory tests and x-rays conducted in the facilitiesare included in these estimates.

3.34 The table also presents estimates of the "normative" variablecosts pier visit for each type of facility (the definition of "normative" unitcosts was given in para. 3.32 above). These estimates of "normative" variablecosts per visit were developed in consultation with clinical experts workingat the primary and secondary level in government health facilities in Punjaband NWFP. These experts listed the type and quantity of medications requiredto treat a typical case of a particular disease or condition. Individualtreatment recommendations were debated among the forum of clinicians untilconsensus was reached on a standard treatment protocol for each major diseaseor condition under investigation in the cost study. Based on this standardprotocol, and the procurement prices in recent government purchases, a unitcost was calculated for each disease. Finally, a weighted unit cost wascalculated, using the shares of cases of each disease in the total number ofcases in the study's sample, for each type of facility.

15/ An explanation of the methodology used in the cost study, and furtherdetails of results, are presented in Methods for the Cost Study of HealthServices in Pakistan, by Logan Brenzel and Akbar Zaidi (1996), a backgroundpaper to this report. This paper is available upon request.

24

3.35 As can be seen from the table, the fixed cost per visit is lowestat DHQs, followed by THQs; it is highest at RHCs. This result indicates thatoutpatient facilities are relatively better utilized at secondary hospitalsthan at rural health facilities (BHUs and RHCs).

3.36 It was noted before that government facilities are underutilized.Table 3.2 above shows that in BHUs and RHCs doctors see about 100 outpatientsper week on an average in the study's sample (this number is likely to be anoverestimate of the true mean, since the facilities in the sample were notchosen at random but suggested by the DOHs). This is a light workload. Ifthe average number of outpatients per doctor were increased, fixed costs pervisit would be reduced accordingly. Similarly, large reductions in costs pervisit could be achieved in THQs and DHQs if the average number of outpatientsper doctor in these hospitals were brought up to more normal levels.l1

3.37 Row (iv) of Table 3.4 presents estimates of the "normative"variable costs per outpatient visit. 17 The normative unit costs increase withthe level of care because of differences in the disease mix. At all fourtypes of facilities, comparison of the figures in rows (iv) and (ii) indicatesthat the actual expenditure per outpatient for variable inputs (medicines,laboratory tests and x-rays) falls far short of what it would be needed for afull course of treatment.

Table 3.4 - Pakistan : Estimated Unit Costs of Outpatient HealthServices,1995/96 (in Rs.)

BHUs RHCs THQs DHQs

i. Fixed Costs/Visit 43.0 54.0 35.0 25.0

ii. Actual VariableCosts/Visit-Medicines 5.9 13.6 15.3 12.5-Other Variable Costs 0 0.6 2.0 2.5

iii. Total Actual Costs/Visit 48.9 68.2 52.3 40.0

iv. Normative VariableCosts/Visit (Medicines Only) 58.0 58.0 146.0 146.0

Source: Cost study of health facilities, World Bank, 1996. Inputs other thanmedicines represent about 5 percent of RHC's unit variable cost and about 10percent of unit variable costs at THQs and DHQs.

3.38 The differences between actual and "normative" costs are often madeup by the patients paying for their own medicines and supplies. Many expensesassociated with treatment prescribed by government doctors take place outsidethe government facility. I.e., for example, it is common practice for

16/ Reductions in actual costs would of course be lower if staff compensationhad to be raised, in line with the argument in para. 3.30 above.

17/ These estimates were derived from disease-specific normative costs oftreatment and take into account the disease mix of outpatient cases treated ineach type of facility.

25

patients to receive two prescriptions: one for medicines available in thefacility, and one for those that are to be purchased in the market at patientexpense. Similarly, patients often buy laboratory and x-ray services in themarket, because the equipment is not available in government facilities, or itis not operational because of lack of supplies or trained personnel.

3.39 Another recent study by the Futures Group International estimatedthe "normative" variable cost of medicines for outpatients at BHUs and RHCs,at just Rs. 4/outpatient. (Essential Drug Supply in Pakistan at the PrimaryHealth Care Level, forthcoming). The study employed a different methodologythan in the World Bank cost study. It used disease incidence figures forweighting and a different disease mix. It did not include tuberculosis in theestimate, which would make a significant difference; in the World Bank study,excluding tuberculosis would reduce the "normative" medicine cost peroutpatient at BHUs from Rs. 58 to Rs. 36. Still, even with this adjustment toimprove comparability between the two studies, a very large gap remainsbetween the two estimates. The Futures study used generic versicns ofessential drugs in all cases, and the lowest published trade prices. Thestudy also shows, using actual data for Balochistan, that using generic asopposed to branded drugs could reduce the Balochistan DOH's drug budget by asmuch as 50 percent.

Inpatient Services

3.40 Estimates were also made of unit costs of inpatient services.These estimates are presented in Table 3.5 below. The definitions of fixedand variable costs, and of "normative" costs, are the same as for outpatientservices, but unit costs are now defined in terms of costs per admission to aninpatient facility.

3.41 The table shows that RHCs in the sample have an average cost peradmission (fixed plus variable costs) much higher than THQs, and close to thatof DHQs. This clearly suggests that provision of inpatient facilities at RHCsis inefficient. These facilities are hardly utilized. In one extreme case,Jiwani RHC in Balochistan, there were only seven admissions in 1995/96, at acost per admission of Rs. 20,400.

------ _.---------------------------------------------------------__----------__

Table 3.5 - Pakistan Estimated Unit Costs of InpatientHealth Services, 1995/96 (in Rs.)

------ _.------------------------------------------------------------__-------__

RHCs THQs DHQs------ _.-----------------------------------------------------------__--------__

i. Fixed Costs/Admission 4,009 2,222 4,385

ii. Actual Variable Costs/Admission 66 438 585

iii. Total Actual Costs/Admission 4,075 2,660 4,970

iv. Normative Variable Costs/Admission 164 661 616Source.____Cost___study___of__health___facilities,______World___Bank,___1996._Source: Cost study of health facilities, World Bank, 1996.

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Preventive Services

3.42 The above estimates of unit costs refer to curative services. Thecost study also estimated unit costs for several types of preventive services,from the same sample of facilities utilized for the curative serviceestimates. The estimated unit costs for preventive services are shown inTable 3.6 below. Total costs include all costs (labor, equipment, vaccines,supplies, etc.). Variable costs include supplies only (vaccines,contraceptives, etc.).

------------------------------------------------------ __---------------------_

Table 3.6 - Pakistan : Estimated Unit Costs of PreventiveHealth Services, 1995/96

a. Total Cost/EPI Contact Rs. 51-Variable Cost/EPI Contact Rs. 17-Variable Cost/Fully Immunized Child Rs. 85

b. Total Cost/Tetanus Toxoid Dose Rs. 137c. Total Cost/Antenatal Care Visit Rs. 112d. Total Cost/Growth Monitoring Visit Rs. 109e. Total Cost/Family Planning Visit Rs. 103

-Variable Cost/Family Planning Visit Rs. 14

Source: Cost study of health facilities, World Bank, 1996.

.3.43 The cost study also estimated the share of total costs accountedfor by curative and preventive services for each type of facility. This isshown in Table 3.7 below. Preventive services account for a large share oftotal costs at the BHU level (42 percent). The share of preventive servicesis much lower at RHC level (15 percent), and even lower at THQ/DHQ levels.

Budgetary Implications

3.44 As noted above, the figures in Table 3.4 indicate large gapsbetween actual and "normative" variable unit costs for curative outpatientservices. For inpatients, there are smaller gaps (Table 3.5). The cost tothe government of closing these gaps would be large.

3.45 However, as noted in para. (3.39) above, there is much scope forreducing the drug gap by emphasizing the use of generic drugs. Furthersavings may be achieved by reducing the number of drugs in the essential druglist at primary health care level. The Futures study quoted above suggeststhat such list should be limited to 30-40 essential drugs. Currently, thenumber of drugs in Provincial essential drugs lists for primary health carefacilities ranges from 80 in Punjab to 179 in NWFP. Such reforms wouldnecessitate retraining physicians in government employment to adopt newstandard prescription patterns.

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---------------------------------------------------------------------- __-----_

Table 3.7 - Pakistan : Cost Shares of Preventive and CurativeServices by Type of Facility, 1996(In percentages of total facility costs)

BHUs RHCs THQs DHQs

EPI 25.0% 9.8% 5.3% 3.1%MCH a/ 17.1% 5.6% 2.6% 1.1%

Total Preventive 42.1% 15.4% 7.9% 4.2%

Outpatient Department 57.9% 51.3% 32.7% 20.2%Inpatient Department 22.6% 35.1% 43.7%Laboratory 2.3% 6.4% 7.0%X-ray 4.7% 5.7% 11.0%Operating Theater 3.7% 12.2% 13.9%

Total Curative 57.9% 84.6% 92.1% 95.8%

Total Facility Cost 100.0% 100.0% 100.0% 100.0%--------------------------------------------------------------- __------------_

a/ Including antenatal care, tetanus toxoid vaccination, growth monitoring,and family planning.Source: Cost study of health facilities, World Bank, 1996.

3.46 It should also be noted that the fiscal cost of closing the gapbetween "normative" and actual costs for curative care would go up over time.This is because: (i) the increased availability of (free) medicines would belikely to draw many patients from the private sector, after some lag; and (ii)population is still increasing at close to 3 percent per year (so that thenumber of patients seen in public health facilities would steadily increaseeven if the public sector did not increase its share of total patients).

3.47 It should not be taken for granted, however, that the Governmentmust incur the full fiscal cost of providing curative services to all atappropriate standards. This is a public policy question; other solutions maybe preferable to society. This issue is further discussed in the nextsection..

3.48 The estimates of unit costs of preventive services can be used toestimat.e the total fiscal cost of various combinations of expansion ofcoverage. Assume, for example, that in Punjab the following were to beaccomplished over the next five years: (i) an LHV is posted in each ruralhealth facility not now having an LHV, so that all such facilities can provideMCH care; (ii) the percentage of fully immunized children is raised from about60 percent (the figure obtained for Punjab in the 1995/96 PIHS) to 80 percent;and (iii) the contraceptive prevalence rate is raised from about 20 percent(the figure reported for Punjab in the Population Council's survey of 1994/95)to 30 percent, with all of the new clients served by the public sector. Itcan be estimated that the total annual incremental fiscal cost of suchexpansion of preventive services would be about Rs. 160 million (by 2001/02),in constant 1996/97 prices. This estimate takes into account populationgrowth.

28

E. Priorities for the Use of Public Funds

3.49 An important issue in any country is what the priorities should befor the use of public funds in the health sector. Closely related is theissue of the cost-recovery policy for government health services.

3.50 It should not be taken for granted that the government should makeavailable all types of health services "for free", i.e., at taxpayers'expense. Raising taxes has a high economic cost (in terms of distortions inresource allocation and administration costs). Hence, ideally, the governmentshould not pay for services that people would be willing to pay forthemselves. In other words, government spending should not crowd out privatespending. (A possible exception would be services targeted to the poor, ifsuch targeting is feasible). Avoidance of the use of taxpayers' money can beachieved by recovering the cost of government-provided services through usercharges, or alternatively by withdrawal of the government from providing theservices in question.

3.51 Use of public funds to pay for health services can be justified inthe presence of various market failures, such as the existence of publicgoods, externalities and information deficiencies. In the case of publicgoods, there would be no provision unless the government organizes theirprovision and pays for their cost. 1 Health education is a good example. Inthe case of (positive) externalities, private consumption may be less thansocially optimal without a government subsidy. Health services that addresscommunicable diseases generally have positive externalities, i.e., theygenerate benefits not only for those directly treated but for others as well(who would have acquired the disease from those infected). Informationdeficiencies cause many types of efficiency losses and may justify governmentintervention, including use of public funds.

Priorities Among Types of Services

3.52 Within the general framework outlined in the previous twoparagraphs, the setting of priorities for the use of public funds (and ofscarce public managerial capacity) among types of health services needs totake into account relevant country characteristics. These include suchfactors as the level of development of the private sector, the epidemiologicalprofile of the population, the level of education of consumers, and the socialstatus of women. In Pakistan's case, three categories of health serviceswould seem to deserve top priority in terms of allocation of government funds(and management attention). These categories are: (i) health education; (ii)control of communicable diseases; and (iii) maternal and child services(including family planning services).

3.53 Health Education. Many of the health problems in Pakistan are theresult of very poor consumer education. Health education is a classic exampleof a public good; the government must take responsibility for it and fund it.Some of the most important types of health education needed in Pakistan are asfollows:

18/ Public goods are goods where: (i) the consumption of a given unit of thegood by one individual does not preclude consumption of the same unit by otherindividuals; and (ii) it is not possible to exclude any individuals from theirconsumption. The private sector has no incentives to produce such goods.

29

(a) Creation of greater awareness of, and demand for: (i) immunizationof infants and tetanus toxoid vaccination for women of reproductive age;(ii) pre- and post-natal checkups and deliveries by trained health careproviders; (iii) the health benefits of proper spacing of childrenthrough family planning; and (iv) good nutrition practices, especiallyfor pregnant women and young children, but also for adults (e.g., toprevent cardiovascular disease).

(b) Basic hygienic practices to prevent various types of communicabledisease (personal hygiene, proper cleaning of kitchen utensils, boilingwater, proper disposal of human waste, etc.).

(c) Education about AIDS and other sexually transmitted diseases andtheir prevention.

(d) Anti-smoking campaigns, to lower the incidence of cardiovasculardisease and other diseases associated with smoking.

(e) Education of people as health consumers to enable them to develop abetter understanding of service quality. Consumers should be educatedas to what they should expect and demand from a health care provider,public or private. They should also be educated to be able todistinguish among various types of health care providers, and especiallyto create awareness of the dangers of seeking care from untrainedproviders.

3.54 An important point to note is that there is a great deal ofsynergy between general education levels and specific health educationefforts. The efficacy of health education is likely to rise as educationlevels rise. Nevertheless, health education efforts can have a significanteffect even under present low levels of general education. For example,levels of immunization in Pakistan have risen in the past when information,education and communications activities related to the immunization programwere stepped up. Another example of a successful recent information,education and communications campaign in Pakistan is the campaign associatedwith the Greenstar network of private family planning clinics.

3.55 Communicable Disease Control. As noted in Section A above,communicable diseases still account for 38 percent of the total burden ofdisease in Pakistan. The main ones, in terms of their disease burden, includediarrheal diseases (12.5 percent of total BOD), respiratory infections (8percent of BOD), tuberculosis (5 percent of BOD), the childhood cluster ofimmunizable diseases (measles, pertussis, poliomyelitis, diphteria, tetanus;6.7 percent of BOD), and sexually transmitted diseases (2.2 percent of BOD).'9

Diarrheal diseases, respiratory infections, and the childhood cluster ofimmunizable diseases, take their greatest toll from young children (under fiveyears of age). Tuberculosis affects both children and adults.

3.56 The government should take a very proactive stance towardspreventing and treating communicable diseases. An important part of thiseffort should be health education, together with public health measures toimprove the availability of safe water and adequate sanitation. But thegovernment also should seek actively to identify and treat those alreadyaffected by communicable disease, and to maintain high levels of immunization

19/ See Annex 3.

30

coverage on a sustained basis. Government health staff should take advantageof all available opportunities. For instance, when a mother brings her sickchild to an outpatient facility for treatment, the staff should seize theopportunity to find out whether the child has been fully immunized.

3.57 The treatment of communicable diseases entails important positiveexternalities which justify government subsidization. The subsidy need not be100 percent of cost, though; a certain degree of cost recovery may be feasiblewithout discouraging treatment. In urban areas, where private providers areconcentrated, and where consumers tend to be better educated, many patientswould seek treatment from these providers at no cost to the government. Wheregovernment is the provider, many consumers may be willing to pay for part ofthe cost, e.g. the cost of drugs. This issue is taken up again later in thischapter.

3.58 Maternal and Child Services (Including Family Planning). Maternaland perinatal conditions account for about 12 percent of the total BOD(Section A above). This large disease burden is due to several causes.First, only about 20 percent of women are assisted by an appropriately trainedprovider during delivery; similarly, the great majority of pregnant women donot get any pre-natal checkups from qualified providers. Secondly, one-thirdof births occur less than two years apart, which doubles the mortality risk ofnewborns as compared to a more normal spacing. 20 Third, as noted in ChapterII, about one-third of pregnant women are underweight, which is correlatedwith low birth weight --a risk factor for the newborn.

3.59 The above factors explaining poor reproductive health in Pakistanare in turn largely explained by poor consumer education. There is a massiveinformation deficiency concerning reproductive health, and the consequence hasbeen weak demand for family planning services for spacing (although this ischanging) and for pre- and post-natal and delivery services by qualifiedpersonnel. In effect, most households seriously underestimate the (privateand social) benefits of these services. Hence government subsidization ofthese services is justified on efficiency grounds. A second explanation forpoor reproductive health in many rural areas are prohibitions against womenseeking care from male providers, in a situation where qualified femaleproviders are often not within reach.

3.60 The information deficiencies and restrictions on women justifygovernment intervention in the reproductive health area. This interventionshould partly take the form of educating consumers (a public good). But thegovernment must also make reliable services available, especially in ruralareas, where qualified private providers are generally not present. Inaddition to front-line services provided by community health workers and staffof first-care level facilities, referral services for serious cases (e.g.,obstetric emergencies) should be made available at all Tehsil and DistrictHeadquarters hospitals.

3.61 As with communicable diseases, a certain degree of cost recoverymay be possible for reproductive health services. In the particular case offamily planning services, the demand for contraceptives is likely to be highlyinelastic with respect to price and income for most households, because the

20/ A detailed discussion of reproductive health problems in Pakistan can befound in Improving Women's Health in Pakistan and Saving Lives, by AnneTinker, World Bank, February 1997, mimeo.

31

cost of contraceptives is very small compared to the cost of having children(for those households that do not want any more children), or to have themsooner than wanted (for those seeking to space).21 Recent empirical work inPakistan tends to support this hypothesis. Estimation of a multivariatefunction to explain contraceptive behavior found that household income andcontraceptive prices have a negligible effect on the decision to contracept.2 2

This is consistent with findings of similar studies elsewhere. Thesefindings suggest that it would be possible for the government to recover alarge proportion of the cost of providing contraceptives without a significanteffect on demand. However, since current contraceptive use in Pakistan isstill very low, it may be preferable to reduce the subsidy gradually.

3.62 Most interventions to address communicable disease, and maternaland chi:Ld services, would be provided most cost-effectively at the lowerlevels of the health system (in the households themselves, in the communities,and at first-level health care facilities). However, reliable referralservices are also needed to handle emergencies and more serious cases. Formost people in Pakistan, the first level of referral are Tehsil and DistrictHeadquarters hospitals. The potential for cost recovery is generally less forcases involving hospitalization, because treatment tends to be expensive perepisode, and because health insurance is not available to the great majorityof the population. Health education should be an integral part of servicesprovided at all levels of the system, supported by the use of mass media.

Priorities Among Types of Inputs

3.63 In addition to setting priorities for government expenditure amongtypes olE health services, there should also be a set of principles to guidethe setting of expenditure priorities among types of inputs -- staff ofdifferenit types, drugs, new facilities, replacement of equipment, and so on.Provincial Health Departments (and the Federal Ministry of Health) shouldperiodically assess the balance among expenditures on different types ofinputs, in the light of their policy priorities. Some suggested principlesare given below.

3.64 First priority in terms of government funding should be given toensuring a more adequate provision of non-salary recurrent inputs for existingfacilities. Within such inputs, a distinction should be made between: (i)inputs which patients can purchase in the market, and (ii) inputs thatpatients cannot purchase in the market. In principle, category (ii) shouldreceive a higher priority, since in this case increasing public expendituredoes not substitute for private spending. Inputs in this category include in-service training other than salaries, repairs and maintenance, replacement ofworn-out equipment, transportation and travelling allowances, utilities, and

21/ This point is made in Economic Analysis of Projects, by Jeffrey Hammer,Policy Research Working Paper No. 1611, World Bank, May 1996.

22/ The sample for the study included urban and periurban couples with monthlyhouseho]d incomes between Rs. 1,500-Rs. 4,000. See Pakistan Private SectorPopulation Project: Contraceptive Demand and Pricing Study, by Daniel H. Kressand William Winfrey, The Futures Group International UK, January 1997.

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health education materials and radio/TV program expenses for masscommunications .23

3.65 Category (i) basically consists of the inputs that formed thebasis for our definition of "variable costs" in section D above; i.e., drugsand materials for diagnostics (laboratory tests and x-rays). In manylocalities throughout Pakistan, such inputs can be readily purchased in themarket. And, as already noted, it is very common for patients to purchasethese inputs in the market upon prescription by a government doctor. Thisimplies that increasing the budget of government facilities for these inputsmay lead to a certain degree of substitution of public for privateexpenditure. This would be an acceptable outcome if the private expendituredisplaced is that of poor households. Moreover, there are drawbacks in theprivate supply of drugs; e.g., private outlets sometimes sell expired drugsand may not stock generic drugs. These problems also exist in the publicsector, but in the short term it may be easier to address them there.

3.66 With regard to expenditure on staff, it would seem that in generalprovision of additional staff for existing facilities should be restricted toredressing imbalances, in particular increasing the numbers of femaleparamedics. Moreover, when vacanc:ies occur, they should not be filledautomatically. Instead, the continuing need for the position should beexamined first, in the light of utilization patterns and other relevantconsiderations. (Many facilities are overstaffed relative to their patientloads).

3.67 Establishment of new health facilities, or upgradation of existingones (e.g., BHU to RHC, RHC to Tehsil hospital) should be kept to a minimumfor the foreseeable future, in view of existing unutilized capacity, and itshould be subject in each case to the fulfillment of suitable criteria relatedto expected utilization, availability of alternatives, etc.. Such criteriashould be developed by each province.

F. Areas of Potential Savings

3.68 There are certain types of health expenditure being incurred bythe public sector which have little or no positive impact on the health statusof the population. These are areas of potential savings.

Overstaffing

3.69 The numbers of posts for certain categories of staff would seem tobe excessive. One category that needs scrutiny is that of general medicalofficers. While detailed information is not available, there is a widespreadimpression that the number of general medical officers is excessive inrelation to their workload in many public health facilities, especially inhospitals. Our own cost study showed low average workloads for doctors atTHQs and DHQs (section C above), including both general medical officers andspecialists. More studies are needed to assess the potential for savings.

23/ Substitution of public for private expenditure could occur indirectly,though. This would be the case if higher public expenditure on these inputswould draw patients from private providers. In areas where private providersare unqualified, however, such substitution would be a good thing.

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3.70 The argument is sometimes made that in Pakistan the medicalschools are producing too many doctors relative to the country's "absorptivecapacity", and that this in turn has led to overstaffing of governmentfacilities with doctors. And it is true that medical lobbies have at timespressed the government to create unnecessary posts of medical officers underthe pretext that there were supposedly many "unemployed doctors". The issueof what would be the optimal annual output of doctors at the present time inPakistan is a complex one and we have not attempted to answer it in this note.The nationwide population/physician ratio in Pakistan is reportedly around1,900,24 which is quite good by comparison with the estimated average for alllow-income countries of about 6,700 around 1990, and about the same as theaverage for all middle-income countries of about 2,000 in the same year.25These numbers include physicians in both the public and private sectors. Itis possible that Pakistan is producing too many doctors. However, the mainpoint we would like to stress in this report is that employment policy fordoctors in the public sector should be decided without regard to the existenceof unemployed (or more likely underemployed) doctors in the labor market. Thegovernment should only employ as many doctors as it needs, according to soundtechnical norms (and the same goes for any other category of staff). Thispolicy should be clearly established.

3.71 Non-technical support staff also would seem to be deployed inexcessive numbers in many government health facilities. A recent analysis ofthe situation in Northern Areas and AJK (conducted during preparation of theNorthern Health Project) found that over 50 percent of the health departmentstaff were in this category and they consumed 38 percent of the salary budget.While undoubtedly some of these chowkidars, sweepers, drivers, etc., areneeded, it is most unlikely that they are needed in their present numbers.

School Health Program

3.72 All four provinces have a school health program based on theconcept of having doctors posted in schools, which is not a defensible concept(see Annex 4 for a detailed analysis). This is a major issue in Sindh, wherethe program employs some 1,300 medical officers at an annual cost of aboutUS$2 million --almost entirely for doctors' compensation. The program inSindh is operational only in Karachi division; in the rest of the provincedoctors appointed to the program have been posted to various facilities (thuscontributing to overstaffing). A suitable school health program would focuson health education and it would be teacher-based rather than doctor-based.

Badly Sited Facilities

3.73 There are reportedly several hundred rural health facilities (BHUsand dispensaries) which have been built but have not been made operational onaccount of poor siting. In many cases, poor siting has resulted from thepractice of building facilities in donated land, instead of searching for andpurchasing suitably located land. While these facilities are not currentlyimposing a fiscal cost, it is important that they should not be madeoperational as health facilities. The government should consider alternative

24/ Ministry of Health, Situation Analysis of Health Sector in Pakistan,Islamabad, December 1995.

25/ World Bank, World Development Report 1993, Investing in Health, Table 28.

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uses for the facilities. It is also important that in the future every effortbe made to avoid a repetition of these mistakes.

Rationalization of Hospital Inpatient Facilities

3.74 Another area of potential savings is rationalization of hospitalinpatient facilities to avoid duplication and ensure a higher rate ofutilization. The cost study conducted for this report revealed considerableunderutilization of inpatient facilities, at least for Rural Health Centers,Tehsil Headquarters Hospitals and District Headquarters Hospitals (para.3.23). Perhaps some of these inpatient facilities could be closed, thusconsolidating use in fewer facilities. However, any such initiative wouldhave to be preceded by detailed studies.

3.75 The above are some examples of low-productivity governmentexpenditures in the health sector. It is likely that additional instances ofsuch low-productivity expenditures could be uncovered by an in-depth analysiscarried out by the Federal and provincial governments. This is likely to beespecially so on the current budget side, since the annual process of currentbudget approval is largely mechanical. On the development side, there hasbeen a bias towards construction of facilities without due regard toutilization prospects.

G. Cost Recovery

3.76 Government health facilities have a system of user charges orfees. The system varies somewhat from province to province. There are.nominal charges per each outpatient consultation and each inpatient admission.There are also charges for diagnostics (x-rays, laboratory tests,electrocardiograms, etc.). Drugs are provided free of charge. There areprovisions to waive charges for certain categories of patients, e.g., poorpatients. The decisions to grant such waivers are taken by the medicalofficer in charge of the facility, reportedly after an interview with thepatient and/or his relatives. Many government hospitals also operate upscale"private wards" where charges are much higher than the normal charges. Theproceeds from all user charges accrue to the provincial Treasuries.

3.77 Cost recovery in government health facilities is very low.Revenue from user charges from all levels nationwide (primary, secondary andtertiary) amounts to about 2 percent of total government spending on health.2 6

It is recommended in this note that the government reconsider its costrecovery policy with a view to increasing the percentage of costs recoveredthrough user charges. As already noted in Section E above, raising taxes hasan economic cost; hence the general principle should be that the governmentshould not pay for services that people would be willing to pay for themselves(out of pocket or through insurance premia). It was also discussed in sectionE above that a net subsidy is justified in certain cases of market failure.In the particular case of public goods, such as health education or

26/ Cost sharing, however, is larger than indicated by revenues from usercharges. This is because it is common practice for patients of governmentfacilities to purchase drugs and other medical supplies (associated with theirtreatment at government facilities) in the market. For hospitalized pat-ents,relatives often provide the food and clean linens, as well as a great deal oflabor which would normally be carried out by nursing staff.

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environmental cleanups, a net subsidy equal to the cost of provision would bejustified (provided that the benefits from providing the public good inquestion are thought to exceed the costs of provision). In other cases ofmarket failure, such as failure caused by the existence of (positive)externalities, the net subsidy could be less than 100 percent of cost.

3.78 The case for increasing cost recovery is reinforced by theexisting "quality gap" in present services. Ensuring that health facilitiesdo not run out of essential drugs would require greater expenditure --althoughmuch could be achieved by using the drug budget more efficiently. Additionalexpenditures would be needed for upgrading the quality of human resourcesthrough more intensive in-service training, for keeping facilities andequipment in better shape, and for making staff more mobile. Moreover, theprovincial DOHs are keen to expand services in high-priority areas which havebeen neglected, such as tuberculosis control, nutrition, obstetricalemergencies, and health education. With the fiscal situation in Pakistancertain to be very constrained in the foreseeable future, sufficientadditional resources to meet these needs are unlikely to be available fromgeneral revenues. If more resources could be mobilized from the system'sclients through user charges --from those who are willing and able to paymore--, faster progress would be possible. To this effect, the provincialTreasuries would have to ensure that the additional proceeds from enhanceduser charges accrue to the government health services as incrementalresources.

3.79 It would perhaps be best to allow facilities to retain theproceeds from their own user charges and use them for improving theiroperations. Such an arrangement would be likely to increase people'swillingness to pay higher charges, by establishing a direct link between thecharges and improvements in the quality of services offered. It would also beimportant to post the list of user fees in a prominent manner in eachfacility, in order to provide adequate transparency. At present, it appearsthat it is a common practice for staff of government health facilities tocharge "unofficial" user fees. Displaying the official fees openly shouldhelp to curb this practice.

3.80 The issue of what would constitute a suitable health services costrecovery policy in Pakistan is a complex one, however. There are potentialrisks as well as benefits from raising user charges. If the poor are notexempt from higher user charges, many of them could stop using governmentfacilities and resort to untrained practitioners or self-care instead. Thereis also a risk that women/girls could be discriminated against in households'health care expenditure. Hence any changes in cost recovery policy would needto be preceded by careful analysis. Some of the relevant considerations forthe analysis are discussed below.

3.81 Rural versus Urban Areas. As previously noted, it appears thatabout 80 percent of people in Pakistan first consult a private health providerwhen they fall sick; however, perhaps as many as one-half of these people areseeing private practitioners with no medical training. In rural areasespecially, there are few private doctors relative to the population.27 Thusthe supply of private medical services by trained practitioners would be very(price) inelastic in rural areas, at least in the short to medium term. Under

27/ While no figures are available, this was the consensus that emerged fromthe field visits conducted by the mission.

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these circumstances, increases in user charges in government facilities wouldtend to raise the proportion of rural people seeing untrained privatepractitioners (who presumably have a very elastic supply) or not seeking careat all. This would be an undesirable result.

3.82 To forestall such a result, raising user charges in rural areaswould need to be coupled with other reforms addressed at making governmenthealth facilities more attractive to the public. For example, facilitiescould be allowed to retain the proceeds from the user charges they collect,and use them for improving the quality of their services. To ensure that suchan arrangement produced value for the communities paying the user charges, thecommunities could be given a meaningful role in deciding how the proceedswould be used. This would probably require the creation of some sort of"facility board" in each rural health facility, with representation of theuser community, the staff of the facility, and someone to mediate disputes.

3.83 In urban areas, on the other hand, where private doctors and othertrained medical practitioners are in much greater supply, raising user fees ingovernment facilities could mostlY result in an increased proportion of peopleseeing trained private providers. This would be a positive development, asit would release government revenues for other high-priority uses for which aprivate alternative is not available (for the full savings to take place,excess capacity in the government health services resulting from the switch toprivate providers would have to be eliminated by closing down and/orconsolidating some facilities).

3.84 The above discussion suggests that in Pakistan a differentiatedpolicy concerning user fees for rural and urban areas may be indicated in thenear term, with greater emphasis on cost recovery in urban areas.

3.85 Structure of Fees. The structure of fees for first level and forreferral services should be such as to encourage the use of lower-levelfacilities first. Higher fees could be charged to patients who are notreferred by lower-level facilities.

3.86 Catastrophic Illnesses. Recovery of a large share of treatmentcosts is problematic in cases of catastrophic episodes of illness/injury.This refers to conditions that have a low incidence but are costly to treat ineach case. One example would be a road accident requiring surgery,hospitalization for several weeks, and subsequent rehabilitation. Anotherexample would be obstetric emergencies requiring surgery. Because in Pakistan

28/ For an empirical study that provides some support to this thesis, see TheSustitutability of Public and Private Health Care for the Treatment ofChildren in Pakistan, by Harold Alderman and Paul Gertler, World Bank LivingStandards Measurement Study Working Paper No. 57, 1989. The study shows thatthe outcome of raising government fees in part depends on the price elasticityof the supply of private doctors' services. If supply is perfectly elastic,all "displaced" patients would switch to private doctors. If, on the otherhand, elasticity is lower and fees of private doctors increase by 50% whengovernment fees are raised, many patients would switch to using chemists or toself-care. Thus, in general, the greater the elasticity of supply of privatedoctors, the greater the proportion of displaced ex-government patients whowould switch to (qualified) private doctors as opposed to untrained providersor self-care.

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there is practically no health insurance market at this point in time, publichospitals providing subsidized care for catastrophic illnesses/injuries act infact as a form of insurance.

3.87 Gender Discrimination. Under the conditions prevailing inPakistan, there is a risk that raising user charges ip government healthfacilities could result in increased discrimination against women/girls in theuse of these facilities. A recent study of the demand for children's medicalcare irn Pakistan provides support to this hypothesis.29 Using a simple modelof household decision-making, the authors show that households would investmore on the human capital of sons than of daughters provided that (i) theexpected market return to boys' human capital is greater than that of girls,or (ii) boys' expected rates of remittances in adulthood are larger than forgirls, or (iii) for cultural reasons, parents are simply more concerned withsons' wealth than with daughters' wealth. They also show that, under the sameconditions, the demand for daughters' human capital would be more priceelastic than for boys, and that this elasticity differential would be largerfor poorer households (i.e., as income rises the elasticities tend toconverge). This implies that increases in the price of medical care wouldhave a larger (negative) proportionate effect on the expenditures thathouseholds are willing to make on daughters's medical care than on boys'medical care, and that this would be even more so for poorer households. Thestudy finds empirical support for these hypotheses by examining data from a1986 survey of children's medical care in five rural districts of Pakistan.

3.88 Exempting the Poor. The issue of cost recovery becomes furthercomplicated if considerations of poverty are brought to bear, as they should.In theory, subsidization of health services by the government could be used asa component of an anti-poverty strategy. However, the problem is how totarget the subsidies. Untargeted subsidies may in fact be anti-poor. InPakistan, payment of taxes is approximately proportional to household income --the poor pay about the same proportion of their income in taxes as the moreaffluent, except for households towards the top of the household incomedistribution which pay more. 3 0 If the share the poor pay of the marginalrupee collected in taxes were higher than their share of the marginal rupeespent by the government on health services, expanding subsidized healthservices would redistribute income away from the poor. This is more likely tohappen for curative clinical services, since it is known from other countriesthat th(e demand for such services has a high income-elasticity. 31 Targetingof health subsidies to the poor would be easier in urban areas, where many ofthe poor are concentrated in certain parts of the city; this would argue for

29/ Family Resources and Gender Differences in Human Capital Investments: TheDemand for Children's Medical Care in Pakistan, by Harold Alderman and PaulGertler, International Food Policy Research Institute, Washington D.C., June1996.

30/ This is because the bulk of tax revenues are from indirect taxes, whosetax rate is roughly proportional to household income. See Incidence of Taxesand Transfers in Pakistan, by Dr. Shaukat Ali, Ministry of Finance, Pakistan,mimeo, September 1994.

31/ The issue of use of health subsidies as an anti-poverty instrument isdiscussed in Economic Analysis for Health Projects, by Jeffrey S. Hammer,World BaLnk Policy Research Working Paper No. 1611, May 1996. This paperprovides a good overview of economic issues in the health sector.

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geographically and targeting would be more difficult. Poor households wouldhave to be identified individually and given a "health card" that wouldentitle them to free (or more highly subsidized) services. One possibilitywould be to use the Local Zakat Committees to identify these households, givencertain agreed criteria. Another, more indirect (but easier to implement)method for directing subsidies to the poor would be for the Government to givea high priority to services that address those illnesses known to beespecially important for the poor, such as tuberculosis and nutrition-relatedconditions.

3.89 Subsidizing the consumption of health services by the poor wouldalso be the most promising approach for addressing gender discrimination inhousehold demand for health services, since (as noted in para. 3.87) it isamong poor households that the gender discrimination problem tends to be moreacute.

3.90 Operationalizing the above principles would require furtherstudies in each province, and the development of the institutional capabilityto implement it. Adequate management systems at the facility level would benecessary to ensure transparency and prevent fraud. The formulation of cost-recovery schemes should include a significant element of consultation andparticipation. Particularly difficult would be the operationalization of theexemption for poor households. First, each province would have to formulateits own definition of poor households. Secondly, a mechanism for identifyingthese poor households would need to be established.

H. Tertiary Hospital Autonomy

3.91 There is considerable momentum in Pakistan towards grantinggreater managerial and financial autonomy to tertiary government hospitals.Several hospitals already enjoy greater autonomy. An example is the SheikhZayed Hospital in Lahore (see Box 2) . Financial autonomy need not beassociated with greater cost recovery, but in Pakistan the trend seems to bein favor of such an association.

3.92 There are several important advantages from greater autonomy oftertiary hospitals:

(a) By enabling the hospitals to set their own schedule of fees,following certain basic principles laid down by government, itpotentially enables a higher degree of cost recovery.

(b) Proceeds from enhanced cost-recovery can be used to financeexpansions of services (or the maintenance of present services, by forexample enabling timely replacement of worn out equipment) that may notbe possible if the hospital is solely dependent on the government budgetfor its revenues.

32/ Financial autonomy has two different interpretations. First, it couldrefer to a situation where government hospitals are given a block grant fromthe government budget and allowed to decide how to use the funds, with orwithout a performance agreement. Secondly, in addition, they could be allowedto set their own fees and keep the proceeds.

39

(c) Autonomy endows managers with real management powers (delegated tothem by the governing board of the hospital), such as the power toselect new staff and to dismiss those who do not perform. Thus it maylead to major operational efficiency gains.

3.93 For the benefits of autonomy to materialize fully, though, certainconditions need to be present. The governing board of an autonomous hospitalshould have real autonomy (i.e., be free from political interference). Itsmembership should adequately represent the major groups of stakeholders, andit should embody sufficient technical expertise as to be able to assess andguide the hospital's management team. Moreover, the granting of autonomyshould be accompanied by the introduction of a performance agreement whichbroadly sets out the outputs expected from the autonomous hospital (ascounterpart to the current government revenues it receives and its use ofpublic assets). The governing board and the management team would be maderesponsible to the corresponding public authority (provincial or federalgovernrment) for delivering on the performance agreement.

3.94 A possible problem is perverse equity effects. The potential forsuch effects is well illustrated by the case of a planned 150-bed Children'sHospital in Quetta, Balochistan. The hospital would be an autonomous publichospital with an independent Board of Governors. Two-thirds of the capitalcost would be financed with a foreign grant and one-third with provincialgovernment funds. It is expected that 80 percent of the current budget wouldbe financed from user charges, and the remaining from the provincial budget.The Chief Executive would be recruited internationally, and specialists in thestaff would be paid salaries several times higher than regular governmentscales in order to attract top talent. Children would be admitted not onlyfrom Balochistan but also from elsewhere in Pakistan and from abroad. Thiswould be undoubtedly a model facility. However, the combination of highpercentage of hospital costs financed from user charges and high staffsalaries would require user charges of a magnitude such as to price out poorhouseholds in Balochistan (and probably many others as well, who would not beconsidered poor by local standards). At the same time, a substantial amountof Balochistan's government revenues would be consumed every year by thehospital. One possible option would be to earmark the 20 percent governmentcontribution to the current budget of the hospital towards the treatment ofpatients from Balochistan whose parents could not pay the regular fees. TheBoard of Governors would have to set guidelines to this effect and monitorimplementation.

I. Conclusions and Recommendations

3.95 More than half of the disease burden in Pakistan is stillaccounted for by communicable diseases and maternal and child illnesses. Ithas been argued in this chapter that addressing these health problems shouldbe the top priority of the government health services, together with healtheducation. Health education, both interpersonal and through mass media, wouldbe a key element of any successful strategy to address both communicable andnon-communicable disease.

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health education and other public goods such as vector control, the governmentsubsidy need not be 100 percent of cost in all cases. A certain degree ofcost recovery may be feasible without discouraging people from seekingtreatment. And, cost recovery would of course be justified for other healthservices as well. In principle, because of the economic cost of raisingtaxes, the government should not pay for services that people would be willingto pay for themselves (out-of-pocket or through health insurance). The casefor increased cost recovery is strengthened by the existing "quality gap" ingovernment services, which increased cost recovery could help to reduce.

3.98 The issue of what would constitute a suitable cost recovery policyfor government health services is a complex one, however. There are potentialrisks as well as benefits from raising user charges. If the poor are notexempt from higher user charges, many of them could stop using governmentfacilities and resort to untrained practitioners or self-care instead, Thereis also a risk that women/girls could be discriminated against in households'health care expenditure. Furthermore, there is the problem of lack of accessto health insurance by the great majority of households, which severely limitsthe potential for cost recovery in cases of "catastrophic" illnesses orinjuries. Thus any changes in cost recovery policy would need to be carefullythought out, and perhaps piloted before widespread replication.

3.99 In the case of tertiary hospitals, there is already a trendtowards greater managerial and financial autonomy associated with greater costrecovery. This is a positive trend in general, but the possibility ofperverse equity effects needs to be considered and guarded against. Also, forthe benefits of autonomy to materialize fully, certain conditions need to bepresent --including a governing board free from political interference,broadly representative of the hospital's stakeholders, and with sufficienttechnical expertise. The granting of autonomy should moreover be accompaniedby the introduction of a performance agreement.

3.100 The chapter also points out that there is considerable unutilizedcapacity in government health facilities, at least up to and including theDistrict Headquarters Hospitals. This is coupled with widespread use by thepublic of private providers, including (a point of great concern) widespreaduse of untrained private providers. In view of the existing unutilizedcapacity in government facilities, it is recommended that establishment of newfacilities and upgradation of existing ones be kept to a minimum, and that itshould be subject in each case to the fulfillment of suitable criteria relatedto expected utilization and other relevant factors. Instead, priority in theallocation of incremental resources available to the provincial/area healthauthorities should be given to providing for more adequate non-salaryrecurrent inputs for existing facilities, and for expansion of services inareas of high priority that have been neglected --such as tuberculosiscontrol, nutrition, obstetric emergencies,and health education.

3.101 Provision of additional staff for existing facilities should berestricted to redressing imbalances, in particular increasing the numbers offemale paramedics. For other categories of health staff, vacancies should notbe filled automatically, but the continuing need for the positions should beexamined first. In particular, the categories of general medical officers andnon-technical support staff would appear to deserve close scrutiny.

3.102 More generally, it is recommended that the Federal andprovincial/area governments undertake periodic in-depth reviews of theirongoing health programs in order to assess their continuing need and priority

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and the adequacy of program design. Examples of wasteful expenditureidentified in this chapter include the (current, doctor-based) school healthprogram, and the construction of badly sited rural health facilities. Theremay also be scope for rationalizing the deployment of inpatient facilities.

3.103 On the positive side, one category of government-financed healthworkers that should probably be expanded is that of Lady Health Workers.33

LHWs are providing critical services, such as health and nutrition education,health monitoring, referrals, and family planning, in close interface withhouseholds. Expansion of this program has been rapid, however, and at thepresent time it may be advisable to slow down expansion in order to enableconsolidation and the maintenance of quality.

33/ This is a program funded by the Federal government.

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CHAPTER IV: IMPROVING THE MANAGEMENT OF GOVERNMENT-FINANCED HEALTH SERVICES

4.01 The previous chapter highlighted the paradox of the existence ofconsiderable unutilized capacity in government health facilities (at least upto and including the District Headquarters Hospitals) alongside use of privatehealth care providers by the great majority of the population --even by thepoor. Government health services are not well appreciated by most households.While poor consumer education is a likely factor in producing this result(with many households resorting to untrained private providers), seriousdeficiencies in the management of government health services are also afactor. Because of these management problems, the public is getting poorvalue for money.

4.02 This chapter first defines the management profile of thegovernment health services in Pakistan. This is followed by a discussion ofthe main management problems. Finally, the chapter outlines several avenuesfor reform which can be expected to produce a significant improvement in thesystem' s performance.

A. The Management Profile of Government Health Services

4.03 The management profile of government health services can bedescribed under the headings of "organizational structures" and "managementsystems".

Organizational Structures

4.04 There are two main elements that comprise the organizationalstructure of any health system. One is the structure as defined by theorganizational units within the ministries and departments at the variousadministrative levels (Federal, Provincial, Divisional and District). Thesecond is the structure of the service facilities.

4.05 Organizations are generally one of three structural types:functionial, program/project, or matrix. While there is no right or wrongstructure per se, matrix structures have proven difficult to manage. InPakistan's health sector, all public sector organizations have evolved intocomplex matrix structures. The original structures were functional. However,the addition of internationally funded projects and other specific programactivities has added units of the program/project type, turning theorganizations into matrix structures.

4.06 The matrix structures would not be so difficult to manage if theorganizations were relatively small. However, all the organizations in thegovernment health system are large in terms of staff and numbers of organiza-tional units. The largest province, Punjab, has just over 100,000 staff and96 major organizational units, while the smallest province, Balochistan, has10,000 staff and 47 major organizational units. These large matrixorganizations are further complicated structurally by divided top management:Secretaries, usually administrative cadre civil servants, and DirectorGenerals, usually medical professionals.

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4.07 Together with the development of a matrix structure, there hasbeen a tendency towards a certain degree of compartmentalization. Keypreventive services of health education, immunization, and family planning areassigned to specific staff as opposed to making these functions part ofeveryone's job. This has tended to weaken the public health orientation ofgovernment services.

4.08 The structure of the service facilities, which was agreed througha planning process organized at the national level, has correct conceptualunderpinnings. The current design, if implemented "purely," would have beenrelatively easy-to manage and operate, as it would have led to increasedstandardization of services, staffing, and supplies. However, this design wasoverlaid on the system existing before 1975. The implementation, which waslargely the responsibility of the Provinces, was uneven. Instead of firstupgrading or eliminating existing facilities (mostly dispensaries and MCHcenters), they were allowed to continue to exist in parallel. At the sametime, the new facilities (RHCs and BHUs) were built. The result is that amixed structure continues over two decades later.

Management Systems

4.09 Planning Systems. Planning is very centralized. It isconcentrated in the planning agencies (Federal Planning Commission andprovincial Planning and Development Departments), and the planning cells inthe provincial DOHs. There have been recent efforts to begin district levelplanning with a few districts. Planning processes have thus far only dealtwith the public sector. Sometimes plans make reference to the private sectoror NGOs, but there have been no significant coordination activities, jointservices, or resource transfers among the various health sub-sectors.

4.10 The planning cells in the provincial DOHs have developed somestaff capability over the last decade, but they are still small and onlystarting to have any influence on planning decisions. The planning functionis also fragmented in the provincial DOHs. Planning cells are attached to theSecretary's office, but there are also planning staff among the DirectorGeneral's staff. This is not intrinsically a problem, but most practice sofar has been uncoordinated. Furthermore, many planning decisions that oughtto have a technical basis are performed by people in the budget sections ofthe DOHs and Department of Finance.

4.11 An additional complication in the planning process is the lack ofpublic health knowledge and orientation. The staff in each province withpublic health training and interest are very few (generally less than 20 perprovince). As a result, while few are even aware of it, the "medical model"tends to dominate many decisions in the government health services. (Theprivate sector almost everywhere will operate by the "medical model", unlessgiven strong incentives to behave otherwise). The "medical model" ischaracterized by an emphasis on curative health services, little concern withthe overall pattern of allocation of resources, a desire to provide "state-of-the-art" care, and the measurement of outcomes in terms of changes in thehealth status of individual patients. By contrast, the "public health model"emphasizes preventive interventions, obtaining maximum impact on the healthstatus of communities for the resources available, the use of appropriatetechnology rather than "state-of-the-art", and the measurement of outcomes interms of changes in the health status of the population at large.'

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4.12 Implementation Systems. There is no unified system for serviceoperations and practices. Some projects have developed procedure proforma forthe project's specific needs. As part of the training for some cadres,standard practice procedures have been defined --e.g., for Lady HealthWorkers. However, since staff are generally not trained jointly as workingteams, there is no guarantee that other co-worker cadres will follow thosesame practices.

4.13 Personnel Systems. Procedures do exist; most of these are verysimilar government-wide and laid down by the Establishment Division. Whilethere is some provincial variation in these procedures, it is not great. Theprocedures were designed largely to control personnel, and were framed tocover a much smaller number of centralized staff. Almost all the proceduresdeal with personnel actions, not personnel management. Because the system isseveral decades behind current needs, including little decentralization, itresults in top managers typically spending a very large portion of their timeon petty personnel actions. For this system (and most others), the formalsystem only provides a framework for the official paper generation, signing,and filing. The actual basis for decisions have little relationship toofficial criteria. Every personnel decision is largely person dependent --itdepends on who wants a decision made, who is in a position to make thedecision, and who else may be affected.

4.14 Drugs and Medical Supplies. There are some standardizedprocedures for requisition, supply, transport, inventory, and dispensing, butthese are not integrated with each other. Dispensing practice is often basedon types and quantities available. Supplies rarely match requisitions, andthe situation is further aggravated by late deliveries, pilferage, and poorinventorying and storage practices. Moreover, as noted in the previouschapter, large savings could be obtained by emphasizing the use of genericdrugs over branded drugs and shortening the Essential Drug Lists.

4.15 Financial Systems. Systems for accounting and audit follow theGOP standard with some provincial variations. One of the greatest weaknessesfrom a managerial perspective is that accounting is done by a single-entry,cash accounting method, which has changed very little in 50 years. Thissystem is suited for small operations in a single location. For systems thesize of the government health services, a double-entry, accrual method isnecessary. Any financial management would be almost impossible now as theofficial record of expenditures is not kept by the DOHs, but by the AuditorGeneral's office. This office also re-categorizes expenditures according todifferent headings than those under the approved budget; therefore, relatingthe two is very difficult.

4.16 Monitoring and Evaluation. There is no systematic monitoring andevaluation of the performance of the health services. The introduction of theHMIS is a major improvement in terms of data availability, but it is not yetfully deployed and does not cover inpatient services. Demographic and healthsurveys have given an indication of overall health status. There also havebeen ad hoc evaluation studies, usually done by international assistanceorganizations or independent authors. While these surveys and studies are

1 See Bradford H. Gray, World Blindness and the Medical Profession:Conflicting Medical Cultures and the Ethical Dilemmas of Helping, The MilbankQuarterly, vol. 70, No. 3, 1992.

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useful, they do not represent an ongoing, internal system. Recent discussionsof monitoring, and to a lesser extent evaluation, have lead to the notion thatthe solution to this managerial weakness will come from the creation ofinformation systems (e.g., the HMIS) and/or monitoring units. This concept ofcompartmentalizing monitoring is a very risky strategy. Most of themonitoring functions should be part of the job of every manager. Managers arethe real engine of monitoring as they make the monitoring decisions. Aninformation system and a monitoring cell doing the preliminary analysis onlyprovide the raw materials for the key process.

B. Main Management Problems

4.17 Section A above has already pointed to some of the managementproblems in the government health services. This section will focus on thepriority problems.

Governance

4.18 There are two broad categories of governance problems which affectthe performance of government health services: (a) problems related to "rent-seeking" behavior on the part of civil servants; and (b) interference bypoliticians in managers' decision-making.

4.19 Rent-Seeking Behavior. While some of them are difficult todocument, it appears that various kinds of rent-seeking behavior arewidespread among government health staff, which impair the functioning ofhealth services. Examples (as reported by knowledgeable observers) include:

(i) Staff absenteeism. Government health staff, especially medicalofficers, are often absent from their posts during normal duty hours.They are thus able to engage in private practice during this time, whileat the same time collecting their government salary and other benefits.In many cases, staff theoretically posted to a rural health facility areactually "seconded" to other government facilities in urban areas and donot show up at their rural postings at all. In some cases staffreportedly make payments to their supervisors in order to be allowed tobe absent from duty on a frequent or permanent basis. In other casesthey are protected by powerful politicians who shield them fromdisciplinary action. A contributing factor to absenteeism is that thetraining of physicians is too clinically oriented, although some changeshave been made to include more community/public health orientation.Also, many BHUs are located in out-of-the-way places with few amenitiesor basic services (such as schools), which makes medical officersreluctant to live on the premises. Originally, BHUs were intended to bestaffed by paramedicals only. (One possible solution would be toconcentrate medical officers at RHCs, which are usually located in ornear small towns, and provide them with transport to visit BHUs in thesurrounding area at certain pre-announced times).

(ii) Frequent transfers. Medical officers in government service competefor postings to health facilities located in the busier towns andtrading centers, where they can have a profitable private clinic. Theyreportedly resort to making payments to those who have the power toeffect transfers, and this practice tends to increase the frequency oftransfers of medical officers --thus weakening their ties to thecommunities they are supposed to serve.

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(iii) Pilferage of supplies. In some health facilities, staffreportedly sell government-provided medicines and other supplies (whichare in short supply to begin with) to private merchants or health careproviders and pocket the proceeds.

4.20 Interference by politicians. Many of the government healthmanagers interviewed for this report complained about widespread interferenceby politicians in various types of personnel management decisions, such aspersonnel recruitment, transfers, and disciplinary actions. Exercise of suchinfluence is "political currency" which can be used to buy votes and politicalcampaign work. Interference by politicians results in lower efficiency of thehealth services and is a major demoralizing factor for managers and staff.

4.21 One implication of political interference is that provincialhealth departments are very constrained in their ability to redeployresources. Many health facilities are overstaffed for current utilizationlevels, but health managers find it nearly impossible to reduce the staffcomplements, or even to eliminate vacant posts. Attempts in this directionwould encounter stiff resistance from the political level, even though theymay make perfect sense from an efficiency point of view. 2 With theseconstraints a manager has to be extremely creative and energetic in order tomake any operation or activity effective.

Interactions With Other Segments of the Health Sector and Civil Society

4.22 Government health services are very closed to external influences.They have largely a one-way relationship with clients/patients. There islittle meaningful interaction with communities, professional bodies, NGOs, andthe private sector. The absence of meaningful interaction with these othersegments of civil society weakens the impetus for meaningful reform.

Management Processes and Performance

4.23 Most managers do not have effective control of their resources.Control of resources and real management decision-making often rests far awayfrom the delivery of services. This lack of local control makesimplementation management extremely difficult.

4.24 Managers' effectiveness is also compromised by the fact that theplanning process still tends to be dominated by capital investment decisionsrather than by a rational discussion of health services and their outcomes.There is no system to arrive at a consensus on service priorities, and toensure that managers at all levels really focus on those services that arerated as top priorities.

4.25 As there is no data-based assessment of managerial performance inthe health system, it is only possible to make a general assessment of thisperformance. Given the encumbrances of the system and sub-systems, it is acredit to some individual managers who make an effort, that any reasonableservices are delivered. Managers trying to make services perform are oftenforced into a crisis management modality.

2 For example, in Sindh, a 10 percent saving on staff costs would releaseenough funds to increase the budget for medicines by 60 percent.

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4.26 This starts, for example, with the planning sub-systems. Whilethe PC-1 form requires an estimate of the recurrent cost implications of adevelopment project, those estimates in no way commit the operating funds. Asa result, managers are often forced to operate programs and facilities withless than minimum basic resources. Proper planning would have created fewerprograms or facilities, which then could be adequately resourced.

4.27 Good management in the government health system is persondependent, not system dependent. There is very little modern managementpractice, starting with time management. A considerable amount of most higherlevel managers' time is taken up with petty personnel issues, construction,drug procurement details, and foreign funded projects. The result is thatmanagers have little time for more productive management functions, such asprogram/service planning, supportive supervision, information analysis,monitoring, or evaluation.

Human Resource Development

4.28 There is little human resource planning. What is done is only fora few cadres and short term --it is not comprehensive. There are too manydoctors in relation to paramedicals, and excessive numbers of non-technicalsupport staff. The staff's gender composition is heavily biased towardsmales, in both total numbers and within management. Pre- and in-servicetraining is generally of poor quality. Weaknesses in training pertain to boththe relevance of the curricula to the needs of the job and the trainingprocess itself. Personnel actions are often compromised by politicalinterference and other governance problems. There is little serioussupervision, which contributes to high levels of absenteeism and poor overallperformance.

C. Suggested Reforms

4.29 The pervasive management problems throughout the government healthservices argue in favor of fundamental reforms. This was certainly theconsensus of the July 1996 SAPP II preparation workshop. It was agreed atthat workshop that the process of change cannot be limited to the fine-tuningof existing organizational structures and management processes. Somethingmust be done to change the overall organization of the sector and itsgovernance, with a view to changing the incentives and constraints facing thesector's actors in a fundamental way. The desired outcome is a new set ofgovernment-financed health services which are better focussed on the rightservice priorities, more efficiently managed, more open and responsive to theinfluence of all legitimate stakeholders, and better appreciated by thepublic.

4.30 In this section, several types of reforms are suggested whichwould help in moving the system towards the desired outcome. They are: theestablishment of district and provincial health boards; enhancing the role ofNGOs; working towards greater community involvement; decentralization; andputting a greater effort and focus on human resource development within thehealth sector.

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Establishment of Health Boards

4.31 A key aspect of changing to a new system is agreeing on new rolesand responsibilities. Health services always have the risk of being supply orprovider driven. If this drive is based on the "public health model", thenthis is not a major problem, but if the "medical model" is followed thensuppliers may not focus on those services with the most beneficial impact onthe pub:Lic's health status. In an effort to achieve a more balanced decisionmaking, and to improve operational efficiency, a recent approach has been todivide decisions concerning government-financed health services into: (i)those of the client or purchaser, who decides what services are demanded andhow they are paid for; and (ii) those of the supplier or provider who, in thecontext of effective demand, decides how the production of services is to beorganized and managed.3 This approach is known as the "purchaser/providersplit". The "client or purchaser" in this context is some kind of public bodywith broad representation, which acts in fact as an "agent" for the finalconsumer of government-financed health services.

4.32 In Pakistan, the government health services are currently both"purchasers" and "providers"; the same set of people in each province or areadecides what types of services will be produced, and the specific manner inwhich the services will be produced (within the budget envelope agreed withFinance). One important option towards improving the organization andgovernance of the sector would be to split the two functions of purchasing andprovision. This would enable "opening up" the decision-making processconcerning broad resource allocation decisions to wider public representation,while enabling health sector specialists to concentrate on the management ofthe production process. Such a system would also facilitate holding providersaccountable for their actions, provided that the purchasing authority haseffective control of the health budget.

4.33 In order to begin this process of opening up and improvingprovider accountability, the establishment of Health Boards at the provincialand district levels, with broad representation from users and the private andpublic health sectors, is suggested in this report. Eventually these boardscould become the purchasers for all health services within a given area --probably the district level.

4.34 Initially, the Health Boards could have a predominantlycoordinating role with limited authority. In this initial stage, they wouldbe mostly a forum to begin bringing the "sector players" together --from boththe public and private health sectors. They could also be responsible fordirecting situation analyses for their respective areas (some districts arealready beginning to carry out such analyses), define health problems andneeds, monitor sector activities, and start a discussion, with broadparticipation, about possible changes in the sector. They could also play arole in overseeing the collection of user charges and the use of the proceedsfor improving the quality of services.

4.35 The role of the Health Boards could then evolve over time towardsincorporating a sector planning function, with real authority over theallocation of government resources within their respective areas. ProvincialHealth Boards would have a major input into the decisions concerning the

3 Examples include the U.K.'s health system and the Medicaid/Medicaresystem in the United States.

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distribution of the province's health budget among districts, and intoformulating province-wide policies. District Health Boards would decide onhow resources are broadly allocated within the district (micro resourceallocation decisions would be left to the managers in charge of various healthfacilities). In doing this, they should keep a strong focus on the servicepriorities identified in Chapter III --health education, control ofcommunicable diseases and maternal and child health services. Provincial anddistrict Health Boards would also have a continuing monitoring function ofgovernment-financed services, with adequate mechanisms for enforcingaccountability of providers . 4

4.36 Once District Health Boards are sufficiently established, theprovincial authorities may wish to consider giving them full control over thehealth budget for the district and converting them into purchasingauthorities. In this capacity, the District Health Boards would enterperformance-based management agreements (or contracts) with providers ofvarious kinds --including NGOs and other private providers in addition to thestaff of government facilities. In order for such an arrangement to beeffective, the District Health Boards would need to have sufficient authorityto penalize providers whose performance falls short of what was agreed in themanagement agreements, including public sector providers. The details of howto ensure that this is so, and the implications for changes in civil servicerules, would need to be worked out.

4.37 Procedures used by the Health Boards to contract services andmonitor contract fulfillment would have to be extremely transparent in orderto guard against possible rent-seeking behavior. Periodic inspections byoutside "third party" teams of auditors could also be incorporated into thesystem to provide further assurance against fraudulent practices.

Enhancing the Role of NGOs

4.38 In many countries, health sector NGOs are major players. NGOstend not to suffer from the same performance problems as the public sectorbecause of their smaller size and very different organizational cultures. InPakistan, NGOs have a presence in the health sector, but are not majorplayers. It is recommended in this report that the Government expand itsefforts to facilitate and provide incentives for the creation and expansion ofhealth NGOs.5

4.39 Since most of the disease burden is borne by women and children,and there is still such a strong gender division in Pakistan, this reportrecommends that government assistance focus on NGOs with the followingcharacteristics:

4It would also be desirable to constitute a national health board, whichwould be responsible for formulating health policy on issues that cut acrossprovincial and area boundaries, such as communicable disease control.

S A start has been made under the Participatory Development Program inthe Social Action Program.

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(a) Their primary service objective would be to improve the health ofwomen and children;i. They should provide:

-ante and post natal care;-normal delivery care and support;-emergency obstetric services as well as essentialobstetric services;-gynecological services;-fertility control and counseling;-nutrition support and services, including micronutrients;-immunizations (they could take over the EPI program in theircatchment area after they are well established);

-ARI and diarrheal disease control;-childhood disease diagnosis and treatment;

ii. They should integrate health education into all services.

(b) They would be staffed and managed exclusively by women. This wouldensure easier access to, and empathy towards, their primary target groupof women and small children.

(c) They would be initially funded through performance (output-based)c.ontracts with public funds, but they would also be allowed to raisefunds on their own (as most do now) which can be done through fundraising and/or charging fees for service.

(d) The government supervision would only be to ensure the fulfillmentof contracts.

(,e) It is expected that most would be located in cities, towns, andmarket centers, but generally not in villages (for security reasons andeconomies of scale); therefore it is expected that patients would cometo them rather than expecting "services at the doorstep"; but outreachservices could also be operated by the NGOs when feasible.

(f) In some cases, they may take over existing public sector facilitiessuch as BHUs or RHCs if they are not being used or are seriouslyunderutilized.

(g) They should coordinate service timings and referrals with public andprivate sector services in the area or district.

4.40 In Chapter III it was noted that it is generally believed thatNGOs working in the health sector in Pakistan are few in number and mostlysmall in size. The presence of a clear government policy to establishpartnerships with NGOs, backed by significant financial commitments, wouldhowever encourage the expansion of NGO activity in the health sector. Such anexpansion could come from expansion of activities of NGOs presently working inhealth; from the creation of new NGOs dedicated to health activities; and fromthe diversification into health activities of existing NGOs not presentlyworking in the health sector. Untapped potential could be quite substantial.

4.41 A useful step towards tapping this potential would be for theProvinces/areas to set up a unit within their DOHs to coordinate relationshipswith NGOs. Two of the functions of these units could be to make an inventoryof NGOs working in the health sector in the respective Province/area, and toconduct or commission studies of those NGOs that appear to be particularly

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successful (in terms of the quality and relevance of their services, theircoverage of poor segments of the population, their financial sustainabilityand quality of financial management, and so forth). Lessons drawn from suchstudies would be useful to guide the formation of partnerships with NGOs.They could also be useful to inform management reforms in the governmenthealth services themselves.

4.42 The process of contracting for the provision of health services byNGOs with government funds has to be transparent, fair and free from politicalinterference. Monitoring of the performance of the NGO contractors also hasto be transparent and fair; a possibility would be joint monitoring by the NGOthemselves, the corresponding government line agency (provincial/area DOH),and an independent third party. Financial arrangements for the contractingout process would have to include a provision for monitoring costs.

4.43 In addition to contracting for the provision of services by NGOs,alternatives could be explored by the government for contracting the provisionof certain services by associations of private physicians and other privatesector partners. This is further discussed in the next chapter.

Community relations/involvement

4.44 The need for community involvement is not just a popular idea. Itis essential to the practice and provision of public health services.Building partnerships between communities and service providers is essentialto any success in changing health status. However, there is no universallyapplicable model for community involvement. There are only certain guidingprinciples, among which the following are perhaps paramount:

(a) Decentralization is clearly a necessary precondition for communityparticipation to develop;

(b) It is doubtful whether community participation can be sustained ifsolely developed around specific health projects or programs;

(c) A corollary of the previous principle is that an intersectoralapproach is probably more likely to succeed (SAP could facilitate suchapproach);

(d) The district health team has to be proactive in promoting theconditions for community participation to work effectively;

(e) The development of appropriate attitudes, values, and approaches toparticipation among health workers and managers should be given priorityattention; and

(f) The district health management process and planning cycle should bescrutinized with a view to determining the key points at whichparticipation can occur

4.45 Possible areas for participation are primarily three: (a)contributing to the formulation of health programs and services (planning);

6 Collins, Charles. Management and Organization of Developing Health Systems Oxford University Pres,New York. 1994 pp. 253-258

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(b) contributing to operational management, including: facility and housingdecisions, staffing decisions, supply and logistic decisions, utility (water,power, sanitation) decisions, maintenance decisions, financial decisions, andmonitoring decisions; and (c) contributing resources, including: information,labor, money, food, and other goods.

4.46 Meaningful community participation in the affairs of governmenthealth ifacilities is potentially a powerful tool for improving accountabilityof health staff (e.g., it could help to reduce absenteeism). For this reasonit is likely to be resisted by those staff lacking a commitment to their jobsand communities. There is also the issue of how to ensure a broad and honestrepresentation of the interests of the various social and ethnic strata. Ifcommunity representatives are drawn from a narrow segment of the community,there is a danger that whatever power is granted to these representatives maybe used selfishly to promote the interests of a select few within thecommunity (including the representatives themselves).

4.47 The formula for how community participation would be implementedmust be worked out and it certainly could vary by province and even withinprovinces. Generally it is suggested that participation begin with only oneof the three types of participation identified above and then expand to theothers as the community is ready and able. Different approaches could betried in the form of pilot projects. If Health Boards are introduced assuggested in this report, they should have representation from communitybodies.

4.48 Experience from other countries suggests that community leadersare likely to have a bias towards the provision of curative services. Thus, aconcerted education effort would be needed to make them aware of theimportance of health education and other preventive interventions, such asimmunization, family planning, and pre- and post-natal checkups.

Decentralization

4.49 Decision-making within the government health services in Pakistanis very centralized at the provincial level. There seems to be increasingrecognition that this excessive centralization is a serious barrier toachieving greater efficiency and responsiveness to local conditions.Considerable momentum appears to be building for a significantdecentralization initiative; this report concurs that such an initiative isnecessa:ry.

4.50 Decentralization entails a transfer of real decision-makingauthority to make policies, carry out management functions, and use resources.The options for decentralization are many; however, in practice, a number ofdifferent forms may be superimposed upon each other. The main options are:

(a) Deconcentration, which involves delegation of powers to lowerlevels, with the powers kept within the same organizations. It can bedone in two ways:

i. Functional - where some decision authorities and functions are"sent out" to geographic or facility managers within the sameorganization. What specific decision authorities aredecentralized may vary, but unless managers have authority overall major steps in the management cycle (planning, implementing,

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and monitoring) over their span of control, decentralization willprobably be ineffective;

ii. Prefectoral - where authorities and functions are given to thesame types of geographic or facility managers, but at the sametime their immediate managerial accountability is transferred to acivil administrator in the area (mayor, district commissioner,governor, etc.) who is, in turn, responsible to the centralgovernment. The sector managers are usually still technicallyresponsible to the sector ministry.

(b) Devolution is the transfer to completely separate, existinggovernmental units, such as provinces/states, districts, ormunicipalities. This usually implies that all of the health operationalfunctions and services are determined by each separate unit, within anagreed budget envelope. The policy function is usually the onlyfunction retained centrally. Pakistan's government health services arealready mostly devolved to the provinces/areas.

(c) Decentralization to local bodies such as District DevelopmentCouncils or District Health Boards. Again this is a shift of decision-making power to completely different organizations. These organizationsmay exist, or they may be set up as part of the decentralizationprocess. This form of decentralization is similar to devolution, but itmay or may not imply that the actual service delivery is done by thelocal body. These bodies may only do the planning, upon assessment oflocal needs. They usually also play a strong role in monitoringperformance of health service delivery (even if they are not directlyengaged in delivery).

(d) Delegation to semi-independent entities usually refers to thetransfer of decision-making authority to institutions such as hospitalsor training centers as individual entities, as opposed to organizationswhich cover larger areas and have a variety of health services.Pakistan is already experimenting with this type of decentralization inthe cases of a few semi-autonomous hospitals. The exact managerial andfunding relationship varies, but in most cases all day-to-day executivedecisions are given to the institution.

(e) Purchaser/provider split model, whereby local health authoritiescontrol the government funds available for health and are free tocontract with a variety of competing organizations and individuals.Again the central government (basically the provincial/area governmentsin the case of Pakistan) usually retains the policy role. As previouslynoted, the establishment of District Health Boards in Pakistan couldeventually lead to this type of decentralization.

4.51 Current reform efforts in Pakistan center around deconcentrationwithin the provincial/area DOHs (para. 2.25). Such efforts are valuable andshould be continued. However, the powers delegated so far refer toimplementation only; reforms should be broadened to include also delegation ofplanning and monitoring powers. The provincial/area governments may also wishto consider introducing formal performance agreements as a mechanism toreinforce the transfer of authority within DOHs and assist accountability.

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Human Resource Development

4.52 In the health sector, the staff are the critical factor inproviding quality services, and their applied knowledge is the critical factorin their performance. The human resource development function can be dividedinto three broad categories of activities: planning, production and personnelmanagement. Provincial/area departments of health need to put greater effortsinto all three categories. Some of the priority tasks involved are discussedbelow.

4.53 Planning - The planning of human resources in the health sectorhas to be based on periodic assessments of future requirements of healthpersonnel of various categories. Such assessments should take into accountthe following factors:

a. Any plans for changes in the overall organization of the sector;b. The types of service priorities, which in the case of Pakistan

should result in a strong focus on the development of adequatestaff resources to address communicable diseases, maternal andchild health problems, and health education needs;

c. The predicted growth of the sector;d. The mix of professional, technical, and support staff (as already

noted, Pakistan has a distorted mix of staff in the public sector;too high a proportion of medical officers and support staff inrelation to the mid-level paramedical and technical staff); and

e. Given the gender-segregated service requirements, the demands madeby task/jobs which are gender-specific must be explicitlyaccounted for.

4.54 The planning function must be carried out, or at least managed, bygovernment, as the private sector would not undertake it of its owninitiative. The efforts in this area thus far have been incomplete andintermittent. This function must be regularized as a key ingredient of healthplanning.

4.55 Production - This involves both pre- and in-service training andother staff development (divided into technical and managerial categories).While it: is important to alter the pre-service training to better providepractical knowledge and skills for future workers, in-service training isequally critical --since over 80 percent of the staff who will be providingservices for the next 10 years are already working. This was the rationalebehind the two IDA-assisted Family Health Projects' major emphasis on buildingin-service training capacity and linking it to supportive supervision. Theother major element is management development, also provided for under theFamily Health Projects. Furthermore, any decentralization and communityinvolvement effort must first train managers and supervisors in the requisiteknowledge and skills.

4.56 Personnel Management - This involves defining the work (jobs andjob tasks), setting performance standards, and carrying out performancemeasurement, in addition to routine personnel actions (recruitment,promotions, transfers, etc.). This is a function which should be internal tothe organization, but in Pakistan it suffers from a large degree of politicalinterference. Unless this interference can be significantly reduced, there islittle hope for any improvements in personnel management.

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D. Conclusions and Recommendations

Conclusions

4.57 The government health services in Pakistan are afflicted by avariety of management problems. Some of these problems are the result ofoutdated systems, and a "technical fix" would be an adequate remedy. However,many of the most serious problems arise from an excessive centralization ofdecision-making, an unfavorable governance situation and perverse incentivesfacing the system's actors. Thus, tinkering with organization structures andmanagement systems at the margin is unlikely to lead to a significantimprovement in the system's efficiency and responsiveness to its clients.

4.58 As the participants in the July 1996 SAPP II preparation workshopagreed, change in Pakistan's health system must be major and fundamental.There is as of now no consensus about what the nature of the change should be,and there is a need for a national debate on this issue. However, thediscussion in several health workshops conducted in Pakistan in 1995 and 1996,and recent discussions in the context of the preparation of SAPP II, point tocertain features for an improved health system. Decentralization of decision-making to the district level and below, and putting more stress on buildingpartnerships with NGOs for the delivery of basic health services are two suchfeatures. Community participation in the health context is generallyrecognized as potentially very valuable, although difficult to organize (asacknowledged in this note). It is also generally recognized that humanresource development in the health sector has been weak and needs to beassigned top priority. The fifth area of reform suggested above, namely theestablishment of provincial and district Health Boards, is a new concept inPakistan's context. It is suggested in this report as a tool to begin"opening up" the process of decision-making concerning government-financedhealth services to the wider civil society, and to improve the accountabilityof government health services to their public.

4.59 While the above types of reforms are pursued by theProvinces/areas, it would also be desirable to have a structured process forevolving a national consensus on the basic characteristics of the healthsector Pakistan should have over the longer term (say 15-20 years from now).This is an area where the government should take the lead, but a highlyparticipatory process would be necessary --involving representatives from allmajor groups of stakeholders. The exact nature of the process cannot beprescribed in this report, but some elements to be considered for inclusion inthe process are: (i) the formation of a stable national committee of highlyregarded technical experts and politicians to guide the effort; (ii) theselection of a local academic or research institution to anchor the analyticalwork that may be required as a basis for formulating reforms; (iii) theselection of a foreign academic or research institution to backstop the localinstitution and help bring worldwide experience with health sector reform tobear on the process; and (iv) the use of pilot programs to demonstrate thebenefits of certain types of reforms.

Recommendations

4.60 Short to Medium Term

a. Begin a process of changing the sector's overall organizationalstructure and relationships which recognizes and attempts to alter

57

the governance situation and the incentives facing the sector'sactors. Specific actions recommended in this report include:

i. Defining scenarios for the future and agreeing on apreferred one, as the basis for long-term health sectorreform.

ii. Pending (i) above, support the development of women-dedicated health NGOs.

iii. Also pending (i) above, establish district and provincialHealth Boards.

b. Involve communities in any feasible manner, but generally by firsthaving them involved in defining their needs and planningservices.

c. Regardless of any agreed long-term scenario, decentralize thepublic sector organizations by comprehensive deconcentration tothe district level, encompassing all three phases of management(planning, implementation and monitoring). This will facilitatecommunity participation and a meaningful relationship withDistrict Health Boards.

d. Implement the in-service technical and management training andsupportive supervision processes along the lines defined in theFamily Health Projects, but add decentralization and communityparticipation to all training, particularly management training.

e. Revise the pre-service training curricula to better match the jobrequirements, particularly public health aspects, and ensurequality teaching/learning processes.

4.61 Long term

a. After decentralization, focus on implementing internal, ongoingperformance and quality improvement processes within thegovernment health service organizations.

b. Implement other reforms towards the preferred long-termscenario.

7' These would be similar to quality assurance programs now in place in anumber of countries.

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CHAPTER V: FOSTERING THE DEVELOPMENT OF PRIVATE HEALTH SERVICES

A. Private Sector Importance and Issues

5.01 In Pakistan, as in most developing countries, there is a thrivingprivate health sector. It has already been noted in Chapter III that thegreat majority of people first consult private providers when they fall ill.There is, in principle, nothing wrong with this use pattern, except that --asalso noted in Chapter III-- in Pakistan private consultations in many casesoccur with untrained health care providers. Survey data also suggest thathousehold expenditure on privately-provided health services and goods may beequal to about three times the amount of government health spending'(although, as noted in Chapter III, in many cases there is a complementarityof private and public expenditures, in the sense that private expenditures areincurred upon prescription from doctors in government facilities).

5.02 The importance of the private health sector implies that publicpolicy cannot be restricted to the public sector; the government must workwith the private sector in order to foster the efficient development ofprivate health services.

5.03 The public policy goal should be to achieve an optimal division oflabor between the public and private health sectors. The nature of suchdivision would change over time, depending on the state of development of theprivate sector and other factors.

5.04 At present, there would seem to be a consensus in Pakistan thatthe beneficial impact of private health services is diminished by a number ofweaknesses, of which the most important are:

(a) The generally low quality of care and widespread "quackery"(practice of medicine by people with little or no formal training) .2

(b) Insufficient attention paid to preventive interventions.

(c) The lack of functioning regulatory mechanisms to protect theconsumer.

(d) The poor education of most consumers concerning health matters(which is in part a reflection of poor education generally). This is amajor cause of health market failure, as it results in consumers failingto distinguish between qualified and unqualified providers, and a weakeffective demand for preventive interventions.

1/ Data from the 1991 Pakistan Integrated Household Survey (consumptionsection) suggest that expenditure of households on health goods and servicesin that year was equivalent to about 2.2% of GDP.

2/ The work for the preparation of this note included interviews withrepresentatives of a number of professional associations. All of thesegroups' representatives indicated their concern about the poor quality of careprovided to many Pakistanis, including unnecessary care, ineffective or evendangerous therapies, and outright malpractice.

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(e) The concentration of trained private providers in urban andperiurban areas.

5.05 The development of the private health sector is also constrainedby the low level of development of the health insurance industry. The lack ofaccess to health insurance poses a major problem for the financing byhouseholds of privately-provided care for catastrophic episodes of illness orinjuries.

5.06 Taking into account these weaknesses of the private health sector,public sector intervention at this point in time is required in a number ofareas. The most important are:

(a) Providing public goods, such as health education, consumereducation, and any services conducive to a cleaner environment.3

Financing should be largely from general revenues.4

(b) Providing health care services in localities not adequately servedby trained private providers, with a focus on communicable diseases andmaternal and child services. Financing should be a combination ofgovernment subsidy and user charges.

(c) Providing for the treatment of catastrophic illnesses/injuries, whencost-effective interventions are feasible, in order to compensate forthe insurance market failure. Financing should be a combination ofgovernment subsidy and user charges, but the scope for cost recoverywould be limited (as a proportion of cost of treatment).

(d) Forming partnerships with the private sector to improve the skillsof private health sector personnel, improve the standards of healthcare, enhance attention to preventive care, and encourage a betterdistribution of private providers.

(e) Encouraging and guiding the development of the health insuranceindustry.

5.07 Over time, as the trained private health sector in Pakistanbecomes stronger and expands its reach into the rural areas, and as the healthinsurance industry develops, the public sector's role in (b) and (c) aboveshould gradually decline. On the other hand, the public sector should have apermanent role in (a), (d) and (e), although the contents of theseinterventions would change over time.

5.08 This chapter makes some suggestions concerning possible avenuesfor addressing private health sector weaknesses. It is hoped that thesesuggestions would serve as a point of departure for a more active discussionin Pakistan concerning public policy towards the private health sector. A

3/ "Providing" does not necessarily mean that the services would be produceddirectly by government employees. In certain cases the services could beproduced by private contractors (including NGOs), with the governmentarranging for this to happen, and paying for all or part of the cost. This isalso true for (b) and (c) below.

4/ User fees could be charged for some services such as garbage collection.

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common thread for the suggestions advanced in this report is that a strongerpartnership needs to be developed between the public and private sectors inthe health area.

B. Addressing Constraints Through Public/Private Partnerships

Improving the Level of Skills of Private Health Personnel

5.09 A first type of intervention for improving the quality of privatehealth care would be improving the level of skills of private healthpersonnel. This, in turn, could be accomplished by improving pre-servicetraining of health personnel and by improving continuing education.

5.10 Pre-service training, for both those who end up working in theprivate sector as well as the public sector, is mostly carried out ingovernment institutions, although some private training institutions alsoexist. There is consensus in Pakistan that pre-service training has manyweaknesses; for example, the education of doctors tends to emphasize thetreatment of complicated illnesses rather than the more common health problemsmost of them will have to deal with in practice. Also, nursing and otherparamedical training should have a much higher priority than has been thecase, as a long-term strategy to reduce the cost of health services. Adetailed analysis of the problems in pre-service training of health personnelexceeds the scope of this note. However, this is clearly an area in need offurther work and greater government attention, in close consultation with theprivate sector.

5.11 Improving pre-service training is important for the future qualityof services; however, it would not address the shortcomings of the currentstock of health workers. For the latter, a greater effort is needed in termsof continuing education. The most promising channel for such an effort arethe professional associations.5 Most of these associations have alreadylaunched their own continuing education programs for their members, fundedfrom dues or direct user charges for the seminars and other educationalprograms they offer. These efforts should be encouraged by the government.One form of government support could be the inclusion of continuing educationactivities by professional associations in future foreign-aided projects,which could be a suitable vehicle for technology transfer in this area.Another form of support could be for the government to link (via legislation)the successful completion of continuing education courses to the revalidationof the licenses of private practitioners (see below).

Licensing Health Care Practitioners

5.12 The government could pass legislation enabling the professionalassociations to manage the licensing of health care practitioners. Thisactivity could then be linked to continuing education. For example, thePakistan Society of Family Physicians could be empowered to: (a) establish the

5/ A number of these associations were interviewed for this report, includingthe Pakistan Medical Association, the provincial Colleges of Family Physiciansin Lahore and Karachi, the Dental Association, the Nursing Association, theAssociation of Paraprofessional Workers, the Private Hospital Association, theChristian Hospital Association, and the Druggists and Wholesale ChemistsAssociation.

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requirements that would have to be met for someone to be licensed as a familyphysician; (b) run continuing education programs whose successful completionwould be required to continue to hold a license to practice; and (c) takesteps to sanction those who continue to practice without a valid license.Sanctions could take the form of fines or other measures enforced through thecourts, or (more realistically, in view of the weaknesses of the justicesystem) by making the names of infractors readily available to the public.General practitioners in good standing (i.e., with a recognized degree, andhaving taken and passed the required continuing education courses) would be"certified" as such by the association, and this information would also bereadily available to the public.

Introducing Independent Accreditation of Health Facilities

5.13 A third possible avenue to improving the quality of private healthcare would be the introduction of a mechanism for the independentaccreditation of private clinics and hospitals.6 To this effect, anindependent accreditation entity would have to be established. Safeguardswould be needed to ensure the integrity of the process; for example, theaccreditation entity could include representation from major foreign hospitalsor universities.

5.14 Accreditation, if credible, could be a powerful force forimproving quality of care. Private hospitals and clinics would be asked tosubmit voluntarily to the accreditation process. Since they compete againsteach other, they would have an incentive to get accreditation. This would beespecially so once the public (and insurers, once the insurance industry isbetter developed) became familiar with the system. Competitive pressurestowards accreditation would also extend to government hospitals if they had todepend to a significant extent on selling their services for their financing.

5.15 Since accreditation would be voluntary, it is likely that no newlegislation would be needed to put it into effect. The public sector couldassist the process of establishing accreditation by working with interestedparties in the private sector to organize the accreditation process. Sometechnical assistance may be needed to define accreditation procedures. Also,since there would be some costs involved, it would be necessary to determinehow the accreditation work would be financed.

Enhancing Attention to Preventive Care

5.16 It is generally acknowledged in Pakistan that private health careproviders do not pay sufficient attention to preventive care. This is in partbecause of a curative bias in medical education, and in part because privatedemand for preventive services is weak among the bulk of the population.

5.17 Addressing the first cause should be part of efforts to improveboth pre-service and continuing education of health care providers.Addressing weak private demand is a longer term proposition. Improvement ofthe general level of education of the population, and especially of women, isone key factor. A more pointed intervention would be public campaigns of

6/ This suggestion was made in the USAID-supported report on Policy Optionsfor Financing Health Services in Pakistan, prepared by Abt Associates Inc.,September 1993. No follow up to the recommendations of this report has takenplace.

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health education highlighting the importance of preventive services. Thecombination of these interventions would lead over time to stronger privatedemand for preventive health services. In the meantime, preventive servicesshould be aggressively promoted by the public health services.

Improving Consumer Protection

5.18 The task of improving consumer protection in the health area canbe divided, for the sake of discussion, into two subtasks: (i) improvingconsumer protection from malpractice and fraud committed by health careproviders who have completed the relevant professional training; and (ii)protecting consumers from malpractice and fraud committed by untrainedpractitioners.

5.19 Trained Health Care Providers. Consumer protection would improvewith implementation of the above suggestions concerning licensing andaccreditation. These tools for consumer protection would to a large extentrely on market forces to exert their influence. Consumers already haverecourse to the courts in case of fraud and malpractice, although theconsensus in Pakistan seems to be that the courts cannot be relied upon toresolve such cases in a fair and efficient manner.

5.20 The public sector also operates some regulatory entities in thehealth sector. For example, the provincial Departments of Health employ druginspectors to inspect pharmacies and take samples of medicines which aretested in provincial drug testing laboratories. Cases of violation ofexisting rules for selling of pharmaceuticals are referred to the Drug QualityControl Board in each province. These boards are composed of experts from themedical and pharmaceutical fields and chaired by the Secretary of Health. Theboards may prosecute the violators or take administrative action, such asissue a warning or cancel or suspend licenses. By all accounts, however,public sector regulatory mechanisms are not doing a good job. This is in partdue to inadequate resources allocated to the task; the presence of corruptionwas also mentioned in many of the interviews with the private sector as animportant factor.

5.21 Untrained Health Care Providers. The most promising strategy forimproving consumer protection vis-a-vis untrained health care providers wouldseem to be public campaigns to educate consumers. The public sector shouldtake the lead in this respect, but the professional associations could alsoassist in this effort. It would be unrealistic to expect, however, thatpublic attitudes about untrained providers would change overnight.Improvement of the general level of education of the population would alsohelp consumers to make more informed choices about different types of healthcare providers.

Fostering the Development of the Insurance Industry

5.22 Availability of health insurance has been very limited so far.The major system is that of the Employee Social Security Institutions (ESSIs),which provide health insurance coverage to lower-income employees in theprivate sector.7 The ESSIs are quasi-public, operate under governmentordinances, and are managed as autonomous organizations at the provincial

7/ Government employees are entitled to health benefits as part of theircompensation.

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level. They are funded entirely by a contribution from employers equal to 7percent of salary. Government regulations require that establishments withmore than 10 employees register for ESSI coverage any worker earning less thanRs. 3,000 per month (about US$75). More than 500,000 employees (mostly urban)are registered.8 The ESSIs run their own network of health facilities andalso pay for some types of care in private and public facilities.

5.23 Several private insurance firms sell indemnity-type, third-partyhealth insurance coverage. Authorization to start such insurance schemes isrequired from the Commissioner of Insurance. Most existing packages coverhospitalization services, particularly surgical procedures and relateddiagnostic services. They offer a certain coverage up to a stipulated limitfor various types of medical interventions. This type of insurance is mostlypurchasied by private firms for their employees; typically, before buyinginsurance, the firms were contracting directly with various health careproviders. Indemnity insurance products now in the market benefit mainly thebetter-off. Present premiums generally range between Rs. 3,000-4,000 perenrolled person per year (US$75-100), with premiums varying according to ageand gender and health care consumption history.

5.24 Development of the health insurance industry would be an importantboost for the private health sector in Pakistan. One possibility would be toexpand the ESSI system, by for example allowing self-employed persons toenroll voluntarily.

5.25 Another possibility worth considering would be for the provincialgovernments to sponsor a pilot project with the private sector to develophealth-maintenance organizations (HMOs). In this model of health insurance,households which become members of an HMO pay a set fee per month and areentitled to free services within a defined "package" at the designatedfacilities owned and operated by the HMO. In other words, the HMO is bothinsurer and provider of services. Likely clients for HMOs may includeemployeles of private firms not covered by the ESSI system (i.e., employees infirms with less than 10 employees, or employees in firms with more than 10employees who earn more than the ESSI limit of Rs. 3,000 per month). Sincemany private firms (and parastatals) already have some form of health carebenefit for their workers, these employers may be willing to pay all or partof the HMO fee. Self-employed workers with steady incomes may also be amarket for HMOs.

5.26 The direct benefits from development of the health insuranceindustry would accrue mostly to better off-households. However, poorerhouseholds could also benefit indirectly. This is because such developmentwould enable a greater proportion of the population to purchase a broad rangeof health services privately, including care for catastrophic illnesses orinjuries. Since fewer people would then resort to government healthproviders, development of the health insurance industry should releasegovernment revenues which could be applied to improving health services forpoorer households with no access to health insurance. An important caveat isthat, for the full savings in government revenues to materialize as morepeople make use of private providers, the government must be ready to downsizeits own capacity for providing health services. This would mean the closingof certain facilities and reductions in personnel.

8/ Assuning six dependents on average per worker, this would give a total ofabout 3.5 million people covered, or about 2.5 percent of total population.

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5.27 As the health insurance industry develops, it will be importantfor the government to build up its capability to regulate the industry. Hencethis is another suitable area for public action complementary to privatesector development. Support for capacity building in this area may be asuitable component for future foreign-aided projects, as there would be asubstantial element of technology transfer involved.

Contracting With Private Entities for the Delivery of Government-FinancedHealth Services.

5.28 Another type of public/private sector partnership that deservesattention is the contracting of private providers to deliver government-financed health services. In Chapter IV, it was recommended that theGovernment expand its efforts to provide incentives for the creation andexpansion of health NGOs. It was further suggested that special emphasisshould be given to assisting the development of NGOs operated and staffed bywomen and focussing on maternal and child health care. But public/privatepartnerships of this type need not be restricted to NGOs. The possibility ofestablishing partnerships between government and non-NGO private health careproviders should also be explored.

5.29 One model that merits consideration would be the contracting bygovernment (provincial Departments of Health) with a professional associationof private physicians --such as the Pakistan Society of Family Physicians-- toprovide a basic package of primary health services (with a strong focus onhealth education and other preventive interventions) to an identifiedpopulation, on a prepaid capitation basis.9 It is recommended that theprovincial governments consider starting pilot projects to this effect,possibly targeted to urban slum populations. The contracts would have toensure that a suitable number of the providing physicians are women (so as tobe able to interact effectively with women patients and their young children),and that the physicians are complemented by an adequate cadre ofnurses/midwives and back-up diagnostic facilities. Suitable performancecriteria should be provided for in the contracts, together with arrangementsfor independent monitoring of compliance with contractual obligations,including ensuring acceptable quality standards. It would also be importantto ensure that the communities benefiting from the scheme are activelyinvolved in its governance. Other possible partners the government mayconsider include private "maternity homes" (which are found in most districtheadquarters and really serve rural women), and private health careorganizations built around ethnic/religious groups (e.g., Parsis, Ismaelis,etc.).

C. Conclusions and Recommendations

5.30 Survey data indicate that in Pakistan there is a thriving privatehealth care sector. This is a reality that public policy must acknowledge.The government needs to work with the private health sector in order to fosterits efficient development. The public policy goal should be to achieve anoptimal division of labor between the public and private health sectors.

9/ I.e., the professional association of physicians would receive a fixed feefrom the government per person covered per year. The association wouldsubcontract with a set of their members, and other required personnel, for theprovision of the contractual services.

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5.31 Private health services are diminished in their beneficial impactby serious deficiencies in the quality of care provided and insufficientattention paid to preventive interventions. A large portion of the public ispurchasing health services from providers who have not been trained to do thiswork. Qualified private health care providers are absent in many rural areas.While regulatory mechanisms have been set up in the public sector to protectconsumers, the consensus seems to be that they are not effective.

5.32 This chapter has made a number of suggestions to address theweaknesses of the private health sector and facilitate its development. Eachof these suggestions involves the formation of some sort of partnershipbetween the public and the private sectors. To summarize, we have suggestedthat the following initiatives be considered:

(a) Active encouragement by the public sector of the continuingeducation work being carried out by various professional associations ofhealth care providers.

(b) Empowerment of professional associations to manage a system oflicensing/certification for health care practitioners.

(c) Introduction of a voluntary accreditation system for private clinicsand hospitals.

(d) Enhancement of attention to preventive care in private health caretransactions through measures operating on both the supply side(correcting the curative bias of medical education) and the demand side(better informing the public about the benefits of preventive care).

(e) Public campaigns to educate consumers about the dangers of seekinghelp from untrained health care providers, and to help consumers toidentify various categories of providers.

(f) Initiatives to foster the development of the health insuranceindustry, including allowing the self-employed to enroll in the ESSIsystem, a pilot project to develop health-maintenance organizations, andcapacity-building work to strengthen the government's regulatorycapabilities in health insurance.

(g) A pilot project for provincial governments to contract with anassociation of private physicians for the provision of basic healthservices to a targeted urban slum population on a prepaid capitationbasis. Other modalities could be developed for contracting with otherprivate sector partners such as maternity homes and health servicesbuilt around religious/ethnic groups.

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PAKISTAN

TOWARDS A HEALTH SECTOR STRATEGY

ANNEXES

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY I I I I I I I I I I1ANNEX' 1- SUMMARY OF MA:IN RECOMMENDATIONS I

POLICY AREAS MAIN RECOMMENDATIONS REMARKS

A. GOVERNMENT HEALTH SERVICES

A.1. Service Priorities *The govemment should seek to achieve a sharper focus on service priorities, both in ^See Section III.Eterms of resources and of management focus.

*Govemment health services should seek to complement, rather than crowd out,private health services.

^Top priority should be given to: (i) health education, in such areas as nutrition, creafing *it should be possible to deliver most of thegreater awareness of the importance of immunization and other preventive interventions, top priority services through frontlineteaching basic hygiene practices, informing about AIDS and other sexually transmitted first-care health facilities linked to Idiseases, and producing better educated health consumers; (ii) control of communicable community-based health workers andinfectious diseases: and (iii) maternal and child health services including family planning, backed by lean referral services inpre- and post- natal care,deliveries by trained health workers, and management of the secondary hospitals.sick child, especially for diarrhea, respiratory infections and malnutrition. For (ii) and (iii). _

greater priority should be given to the rural areas, where trained private providers areoften not available. |

A.2. Cost Recovery ^The govemment should reconsider its cost recovery policy with a view to increasing *See Section III.Gthe percentage of costs recovered through user charges.

*Additional proceeds from enhanced user charges should accrue to collecting facilitiesas incremental resources.

*Any changes in cost recovery policy should be preceded by careful analysis, and|perhaps piloted first in a few districts.

A.3. Tertiary Hospital Autonomy *The trend towards tertiary hospital autonomy should be encouraged by the govemment. *See Section III.H

*But care should be exercised in the selection of the goveming boards, and the J lI_______ I_______ granting of autonomy should be accompanied by the introduction of a performancel_______ l___ ___ =agreement. lll | - -- l

|______ l______ *To forestall undesirable equity effects, the govemment contribution to the budgets ofl_______ l_______ the autonomous hospitals should be earmarked for subsidizing consumption ofI_______ I_______ ________ ________ services by the poor.

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGYANNEX 1- SUMMARY OF MAIN RECOMMENDATIONSPage2 2__

POLICY AREAS ______MAIN RECOMMENDATIONS REMARKS

A.4. Improving efficiency and man ementof govemment health servicesl

(a) Priorities Among Types of nputs 'The establishment of new govemment health facilities and upgradation of existing ones *See Sections III.E and III.Fshould be kept to a minimum for the next several years, and it should be subject in _each case to suitable criteria related to expected utilization and other relevant factors.

*Poorly located health facilities which have not been made operational should not bemade operational as health facilities.

The govemment should study the potential for rationalizing hospital inpatient facii tiesin view of low utilization rates in man govemment hospitals.

*Priority in the allocation of incremental resources available to the health authoritiesshould be given to providing for more adequate non-salary inputs for existing facilities.

*Generic drugs should be emphas'zed as opposed to branded drugs. |_ l__

*Provision of additional staff for existing facilities should be restricted to redressina_imbalances, particularly increasing the number of female paramedics.

'For other categories of staff, vacancies should not be filled automatically, but thecontinuing need for the positions should be examined first. In particular, thecategories of general medical officers and non-technical support staff would appearto deserve close scrutiny.

(b) Periodic Programs Review *The govemment should undertake periodic in-depth reviews of their ongoing healthl______ |programs in order to assess their continuing need and the adequacy of program |----- _ | ldesign.

.The school health program is an example of a govemment program in need of * See Annex 4being redesigned.

(c) Decentralization of Management *The process of decentralization of management of govemment health services ISee Section IV.Cto the district level and below, already initiated within provincial/area |_ __.

L I l Departments of Health, should be continued and deepened. l l_l__ _

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGYANNEX 1 - SUMMARY OF MAIN RECOMMENDATIONSPage 3 _

POLICY AREAS MAIN RECOMMENDATIONS REMARKS

(d) Health Boards 'Establish Health Boards at the provincial and district levels, with broad representation *See Section IV.Cfrom users of govemment health services and the private and public health sectors._

_ ~~~~~~~~~~~~~~then evolve over time towards incorporating a sector planning function, with real aufrTy ovrihe aliocalion od goveTnment resources within their respectve areas.

*he Health Boardscudeetal,eoeprhaigatoiisfralhatservices within a given area (probably the district level).III

(e) Community Involvement *The government health services should seek to involve the communitbes in the planning, *See Section IV.Cmanagement and support of service facilities.

l_______ l_______ ________ _______ *Community representatives should be broadly representatve of the various social andl_______ l_______ ethnic strata in the community. 1 ll_

*The formula for implementing community participation must be worked out and itcould vary by province and even within provinces. Different approaches could

________ ~~~~~be tried in the form of pilot projects.

(f) Contracting with NGOs I *The government should expand its efforts to support the development of health NGOs. *See Section IV.C

I_______ I_____ I^*It is suggested that the government focus its assistance on NGOs which are staffed II_______ I_____ Iand managed by women and whose focus is on the health of women and children.

(g) Human Resource Development *Implement the in-service technical and management training and supportive supervision *See Section IV.Cl_______ l_______ ________ processes along the lines defined in the Family Health Proiects, but add

l_______ l_______ l_______ ________ decentralization and community participabon to all training, particularly for managers. l

I_ _ _ _ I _ _ _ _ _ _ _ I I _ _ _ _ I _ _ _ _ I_ _ _ _ _ _ _ I_ I _ l _ I _Il_______ l_______ l_______ *Personnel management should focus more on setting standards and assessing l_lI_______ I_______ I_______ o______ erformance of staff in government health services. l l_l_I

________ I_______ i_______ _______ *Political interference with personnel management should stop.

PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGYANNEX 1 - SUMMARY OF MAIN RECOMMENDATIONS ;Page 4 _=_ ._=

POLICY AREAS MAIN RECOMMENDATIONS REMARKS

B. PRIVATE HEALTH SERVICES

B.1. Continuing Educa ion *The government should actively encourage the continuing education work being carried *See Chapter V.out by various professional associations of health care providers. One form of support The recommendationscould be the inclusion of continuing education activities by professional associations in this section referin future intemationally-assisted proojects, which could be a good vehicle for to various types oftechnol transfer in this area. p partnerships between

.__________________ ___________________ the public and theB.2. Licensing/Certification *Empower the professional associations to operate a system of licensing/certification private sectors.

______ ._ for health care pracitioners.

B.3. Accreditation * _ _ *Support the introduction of a voluntary accreditation system for private clinics andI_____ hospitals. I I I

B.4. Preventive Focus *Seek to strengthen the preventive focus of pdrivate health care services through measures_ _ l I .on the supply side (correcting the curative bias of medical education) and the demand________ _______ lside (public campaigns to inform the public about the benefits of preventive care). _ o

B.5. Consumer Education *Organize public campaigns to educate consumers about the dangers of seeking helpfrom untrained health care providers, and to help consumers to identifY various |

________ categories of providers.

B.6. Health Insurance *Examine possible initiatives to foster the development of the health insurance industrY(e.g., allowing the self-employed to enroll in the ESSI system, a pilot project todevelop health-maintenance organizations, strengthening the regulatory capability

________ _______ lin health insurance).

B.7. Contracting With Private Sector *The provincial governments should consider organizing pilot projects to contract with9_______ ________ associations of private physicians for the provision of basic health services to a

________ ________ _______ _targeted urban slum population on a prepaid capitation basis. Other modalitiescould be developed for contracting with other private sector partners, such asmaternity homes and health services built around religious/ethnic groups.

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Annex 2

Pakistan - Towards a Health Sector StrategyBibliography

Abt Associates Inc. (1993). Policy Options for Financing Health Services inPakistan. Report commissioned by USAID. Bethesda, Maryland, USA. Mimeo.

Alderman, Harold and Paul Gertler (1989). The Sustitutability of Public andPrivatie Health Care for the Treatment of Children in Pakistan. World BankLiving Standards Measurement Study Working Paper No. 57. Washington, D.C.

…-------- (1996). Family Resources and Gender Differences in Human CapitalInvestrments: The Demand for Children's Medical Care in Pakistan. In"Intrahousehold Resource Allocation in Developing Countries: Methods, Modelsand Policy", edited by Lawrence Haddad, John Hoddinott and Harold Alderman,Johns Hopkins University Press, 1997.

Ali, Shaukat (1994). Incidence of Taxes and Transfers in Pakistan. FinanceDivision, Islamabad. Mimeo.

Asian I)evelopment Bank (1996). Appraisal Report for the Social Action Program(Sector) Project II. Report No. PAK 28330. Manila.

Balochistan Department of Health (1996). Provincial Feedback Report of theHealth Management Information System for First Level Care Facilities, firstquarter 1996.

Brenzel, Logan and Akbar Zaidi (1996). Methods for the Cost Study of HealthServices in Pakistan. World Bank, Washington D.C., mimeo.

Collins, Charles (1994). Management and Organization of Developing HealthSystems. Oxford University Press, New York.

Dataline Services (Pvt.) Ltd. (1996). Report of the Health Focus GroupsDiscussions. Islamabad, mimeo.

Federal Bureau of Statistics (1996). Report of the Pakistan IntegratedHousehold Survey, 1995-96. Islamabad.

Government of Pakistan (various years). Provincial and federal budgetdocuments.

---------- (various years). Operational Plans of the Social Action ProgramProject for the federal Ministry of Health and provincial/area Departments ofHealth.

---------- (1996). Economic Survey 1995/96. Islamabad.

---------- (1996). Planning Document for the Social Action Programme ProjectII (19946-2000). Planning Commission, Federal SAP Secretariat, Islamabad.Mimeo.

----------- (1996). Draft Report of Chief Ministers' Committee on SAPP II(1996-2000). Planning and Development Division, Federal SAP Secretariat,Islamabad. Mimeo..

Griffin, Charles C. (1992). Health Care in Asia. World Bank Regional andSectoral Studies. Washington D.C.

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Hammer, Jeffrey (1996). Economic Analysis for Health Projects. World BankPolicy Research Working Paper No. 1611.

Kress, Daniel H. and William Winfrey (1997). Pakistan Private SectorPopulation Project: Contraceptive Demand and Pricing Study. The Futures GroupInternational UK, mimeo.

Ministry of Health (1995). Situation Analysis of Health Sector in Pakistan.Islamabad.

Ministry of Health and WHO (1993). Utilization of Rural Basic Health Servicesin Pakistan. Islamabad.

Multi Donor Support Unit to the Social Action Program (1995). SAP SectorStatistics, 1992/93 to 1995/96. Islamabad, mimeo.

---------- (1996). Report of the SAP II Preparation Workshop for the HealthSector, July 1996. Islamabad, mimeo.

Musgrove, Philip (1996). Public and Private Roles in Health: Theory andFinancing Patterns. World Bank, Human Development Department, mimeo.

Pakistan Medical Research Council (1996). Preliminary Report of the NationalHealth Survey of Pakistan. Islamabad, mimeo.

Pinto, Rogerio et al. (1994). Projectizing the Governance Approach to CivilService Reform. World Bank, Washington D.C.

Planning and Development Departments of Punjab, Sindh, NWFP and Balochistan;Federal SAP Secretariat, Planning and Development Division; and Multi DonorSupport Unit to SAP (1996). SAPP Field Review, February-April 1996.Islamabad, mimeo.

Planning and Development Division (1984). Evaluation of the Rural HealthProgram in Pakistan. Islamabad, mimeo.

Politzer, Robert et al. (1992). Commentary: The Traditional Public HealthApproach to Prevention and Risk Reduction. American Journal of PreventiveMedicine, Vol. 8, No.6.

Population Council (1995). 1994/95 Pakistan Contraceptive Prevalence Survey.Islamabad.

Punjab Department of Health (1995). Provincial Annual Feedback Report of theHealth Management Information System for First Level Care Facilities. Lahore.

Spohr, Mark (1997). Pakistan Burden of Disease Working Paper. World Bank,Washington D.C., mimeo.

The Futures Group International. Essential Drug Supply in Pakistan at thePrimary Level. Annex IV of Report on Public/Private Partnerships . Draftdated July 15, 1997. Washington D.C.

Tinker, Anne (1997). Improving Women's Health In Pakistan and Saving Lives.World Bank, mimeo. Washington D.C.

World Bank (1993). World Development Report 1993, Investing in Health.Washington D.C.

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---------- (1993). Pakistan Health Sector Study: Key Concerns and Solutions.Report: No. 10391-PAK.

---------- (1994). Staff Appraisal Report of the Pakistan Social ActionProgranm Project. Report No. 12588-PAK.

---------- (1995). World Development Report 1995. Washington D.C.

---------- (1995). Pakistan Poverty Assessment. Report No. 14397-PAK.

---------- (1995). Staff Appraisal Report of the Pakistan Population WelfareProgram Project. Report No. 13611-PAK.

---------- (1996). Staff Appraisal Report of the Pakistan Northern HealthProgram Project. Report No. 15133-PAK.

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Pakistan - Health Sector Strategy

ANNEX 3 - BURDEN OF DISEASE ESTIMATES

Availability of Data on Pakistan Health

Pakistan does not routinely collect information that could be used for burden of diseasecalculations. There is no systematic recording of birth and death statistics with consistent accuratehealth information. Government health service statistics collected through the HMIS are not veryuseful for gauging the extent of disease. "Disease specific" programs that monitor and treatspecific public health problems do collect some useful information for their area of responsibility.

The other health data that exists is from various health surveys and studies which have beenperformed by in -country organizations such as the Pakistan Medical Research Council and studiesthat have been performed by various aid agencies. These studies, even if they are of good quality,have not been designed to collect the disease incidence information necessary for a burden ofdisease calculation and therefore are of limited usefulness.

Fortunately, one of the largest and best quality health surveys that has been conducted is available.It is the National Health Survey of Pakistan (NHSP) which is a statistically well controlled healthsurvey questionnaire and examination.

National Health Survey of Pakistan Data

The National Health Survey of Pakistan was conducted by the PMRC and the Federal Bureau ofStatistics, with technical assistance from the National Center for Health Statistics of the U.S.Government. It is a large, well designed survey that consists of a health survey, medicalexamination, and laboratory component. It was not designed to collect information for a burden ofdisease study but it does contain information that can be used for these purposes.

Since the survey was not designed with the burden of disease calculation in mind, the diseasescovered do not include all of the most prevalent diseases and the questions asked do not necessarilyelicit the incidence, age, and disability information required for the BoD study.

The National Health Survey Pakistan (NHSP) was used for the largest proportion of data in theBoD study.

Statistical Significance of Data

The survey consists of a total of 18323 individuals which were selected from demographicsampling units to reflect the overall population of Pakistan. The households selected for the surveywere taken randomly from representative demographic units throughout the country. As such, thesurvey is an accurate reflection of the urban, rural, provincial, and male/female composition of thecountry.

The completion rates for the survey are excellent, with the frequency of non responders in mostcases less than 5%. The result of this is that the survey contains very accurate information for thequestions that were asked.

- 75 -

Because of the relatively large sample size, the data is significant at the 95% confidence level forquestions that have a positive response rate of as low as 0.05 % of the population (corresponding,where relevant, to an incidence of 50 per 100,000.)

Incidence of chronic diseases

The main limitations are in the calculation of the incidence of chronic diseases. Many of thequestions in the survey yield prevalence data. However, for many chronic diseases, the surveyasked "How old were you when you were told you had this disease?"

For these questions, we were able to calculate an incidence for chronic diseases as well as aprevalence. In calculating the incidence, we used the difference between the patient's present ageand their reported age when diagnosed. The number of people who were told one year ago, twoyears ago, etc. leads to an annual incidence. We feel this method yields an acceptable estimate ofthe incidence of these chronic diseases.

Incomplete Data in NHSP

Most of the data in the NHSP is accurate with a high percentage of completion. There are,however, a few crucial areas where the data are presently incomplete.

The following areas of data are important to the disease burden study. Data has been collected bythe NHSP in these areas. However, the data are currently incomplete, and were not available forthe burden of disease study.

Malaria

The study did collect malaria blood smears from most participants. However, these have not beenread and checked to the satisfaction of the study directors and so this data were not available at thetime of this study.

Hepatitis

The study did collect whole blood for hepatitis serology. However, the assay technique used givesan unacceptably high percentage of false positives with whole blood. The PMRC investigators areconsidering alternative assay techniques to obtain more accurate results for this importantparameter and hopefully this data will be available in the near future.

Important Disease Categories in Need of Better Information

The survey is not all inclusive and was not designed to collect information for a BoD calculation.For the calculation of the BoD, we need to have incidence data for all diseases that have asignificant disease burden. The following disease categories are important for the calculation of theBoD. However, the NHSP does not contain data that would allow determination of the incidence ofthese diseases:

Tropical cluster

These diseases are, in general, of low incidence and correspondingly low disease burden inPakistan. Malaria data were collected in the survey and should be available fairly soon.

- 76 -

Sexually transmitted diseases (Including HIV)

The survey contains no information on these diseases. It is difficult in any culture to collectaccurate information on this category of disease and the survey did not attempt to ask about thishighly sensitive topic.

Perinatal Causes

The only survey questions dealing with perinatal causes were several questions asking about thecolor and weight of the last child delivered. These are non-specific and were asked by lay people oflay people. It is difficult to impute neonatal conditions from them.

Maternal conditions

The questionnaire contained several non-specific questions regarding problems with the lastpregnancy. These were not useful in formulating a disease burden.

Malignant neoplasms

The survey does not contain information on neoplasms. It is difficult to collect this informationfrom patients due to the highly technical nature of the diagnoses. Better information can beobtained from a comprehensive tumor registry or death records which are filled out by trainedmedical personnel, neither of which currently exists in Pakistan.

Neuro-psychiatric

Epilepsy, psychoses, drug dependence, alcohol dependence, and dementias are important categoriesthat need better data since they may be important sources of disease burden and in some cases areamenable to disease control programs.

Cardiovascular

It was difficult to use the information in the NHSP to formulate cardiovascular disease incidenceinformation.

The NHSP does not contain significant information on cardiovascular disease. This is animportant disease category and additional efforts should be made to improve the quality of dataavailable for ischemic heart disease, hypertension, inflammatory cardiac disease, andcerebrovascular diseases.

Chronic respiratory disease

The NHSP contained several questions about chronic cough and shortness of breath but these arenon-specific and could not be used to impute respiratory disease.

This is an important disease category that needs improved information. The incidence ofemphysema and bronchitis have important public health implications for smoking, pollution, andindustrial health programs.

- 77 -

Additional Sources of Data for Burden of Disease Study

Tuberculosis

TB control program

STDs

STD control program

Studies of HIV prevalence in approximately 1.3 million blood donors and clinic patients haveuncovered approximately 1000 cases in the entire country. This corresponds to a prevalence ofapproximately 70/100,000. It is difficult to calculate incidence from this but it is probably lessthan 20% of the prevalence.

Malaria

Malaria control program

Published Data

Pakistan has a medical community that is fairly active in medical research and publication. It wasdifficult to assess the quality of the research in the published papers and most of the research thatwe could find was difficult to translate into information useful for the BoD calculation. Theresearch that we were able to locate was used to corroborate information from other sources.

Consultation with Pakistani Academic Clinicians

A workshop was held with Pakistani clinicians. This provided valuable information to fine tunethe age of onset and duration of disability calculations.

WHO Published Data

The data published by the WHO in "Global Comparative Assessments in the Health Sector" wasused as a reference and back up data source.

- 78 -

Disease Burden Report Date: 01122/97

Area: Pakistan

Disease Category Incidence DALY Percent/100,000 /100,000 of DALY

Communicable, maternal and perinatalInfectious and parasitic diseases

Tuberculosis 138.25 1,836.0 5.01Diarrhoeal diseases 169,999.00 4,567.9 12.48Meningitis 1,900.00 169.6 0.46Hepatitis 1,500.00 48.1 0.13Leprosy 3.00 22.5 0.06Trachoma 14.00 92.0 0.25Intestinal helminths 82,265.00 584.9 1.59Other Infectious and ParasXtic diseases 138.00 1.9 0.00Malaria 2,400.00 143.1 0.39

258,357.25 7,466.4 20.40Respiratory infections

Acute lower respiratory infection 89.740.00 2,684.2 7.33Acute upper respiratory infection 20,000.00 200.5 0.54Otitis media 14,932.00 95.9 0.26

124,672.00 2,980.7 8.14Maternal conditions

Hemorrhage - Pregnancy 200.00 69.7 0.19Sepsis - Pregnancy 500.00 65.5 0.17Abortion 1,000.00 116.5 0.31Complications of Pregnancy 561.00 761.5 2.08

2,261.00 1,013.5 2.77

Perinatal causesPerinatal causes 192.00 3,558.8 9.72

192.00 3,558.8 9.72

Sexually transmitted diseasesSyphilis 10,000.00 186.1 0.50Gonorrhoea 25,000.00 133.0 0.36HIV infection 2.00 25.3 0.06Chlamydia 7,800.00 250.2 0.68Pelvic inflammatory disease 4,000.00 214.1 0.58

46,802.00 808.9 2.21

Childhood clusterMeasles 24,000.00 739.5 2.02Pertussis 13,000.00 341.5 0.93Poliomyelitis 44.00 336.6 0.92Diphtheria 500.00 17.7 0.04Tetanus 31.70 1,020.8 2.79

37,575.70 2,456.2 6.71

Tropical clusterLeishmaniasis 100.00 169.4 0.46Lymphatic filariasis 600.00 194.2 0.53

700.00 363.6 0.99

470,559.95 18,648.3 50.97

Non-communicableMalignant neoplasms

Other malignant neoplasms 100.00 1,578.3 4.31

100.00 1,578.3 4.31

Diabetes mellitusDiabetes Mellitus 122.00 243.2 0.66

122.00 243.2 0.66

Nutritional/endocrineAnemias 4,935.00 697.0 1.90Protein-energy malnutrition 10,000.00 677.4 1.85

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Disease Burden Report Date: 01/22/97Area: Pakistan

Disease Category Incidence DALY Percent/100,000 /100,000 of DALY

Iodine deficiency 4,578.00 645.5 1.76Vitamin A deficiency 154.00 90.0 0.24

19,667.00 2,110.0 5.76

Neuro-psychiatricOther neuro-psychiatric 104.00 782.3 2.13Epilepsy 50.00 156.6 0.42

154.00 939.0 2.56

Sense organCataract-related blindness 102.00 769.9 2.10

102.00 769.9 2.10

Cardiovascular diseaseOther cardiovascular diseases 106.00 315.9 0.86Rheumatic heart disease 118.00 186.3 0.50Ischemic heart disease 593.00 1,724.9 4.71Cerebrovascular disease 134.00 484.9 1.32Inflammatory cardiac disease 87.00 215.2 0.58Hypertension 363.00 723.6 1.97

1,401.00 3,651.1 9.97

Chronic respiratory diseaseOther chronic respiratory disease 125.00 535.8 1.46Chronic obstructive lung disease 50.00 214.3 0.58Asthma 155.00 407.6 1.11

330.00 1,157.8 3.16Diseases of the digestive system

Other diseases of the digestive system 275.00 902.7 2.46Peptic ulcer disease 800.00 112.9 0.30Cirrhosis of the liver 50.00 214.3 0.58Haemorrhoids 437.00 5.8 0.01

1,562.00 1,235.9 3.37Genito-urinary

Other genito-urinary 3,316.00 50.3 0.13Nephritis/nephrosis 100.00 277.0 0.75Benign prostatic hypertrophy 30.00 39.0 0.10UTI 16,661.00 113.2 0.30

20,107.00 479.6 1.31

Skin diseasesSkin disease 1,000.00 27.9 0.07

1,000.00 27.9 0.07

Musculo-skeletal systemRheumatoid arthritis 20.00 48.5 0.13Osteoarthritis 20.00 49.4 0.13Other musculo-skeletal system 2,000.00 52.9 0.14

2,040.00 151.0 0.41

Congenital abnormalitiesCongenital abnormalities 175.00 1,278.2 3.49

175.00 1,278.2 3.49

Oral healthDental carries 3,847.00 49.7 0.13Peridontal disease 22,643.00 131.1 0.35

26,490.00 180.9 0.49

73,250.00 13,803.1 37.72

IniuriesUnintentional

Other unintentional 3,144.00 2,085.3 5.69Road traffic accidents 38.00 906.8 2.47

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Disease Burden Report Date: 01/22/97Area: Pakistan

Disease Category Incidence DALY Percent/100,000 /100,000 of DALY

Poisoning 793.00 16.2 0.04Falls 2,256.00 59.8 0.16Fires 146.00 4.7 0.01Occupational 6.00 143.1 0.39

6,383.00 3,216.1 8.79

IntentionalSelf-inflicted 2.30 67.5 0.18Homicide and violence 31.00 828.3 2.26War 0.76 22.3 0.06

34.06 918.2 2.50

6,417.06 4,134.4 11.30

Totals 550,227.01 36,586

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ANNEX 4: School Health Program

Background

1. The school health program was established in 1987, at a time whengovernment was under political pressure to create jobs for newly graduateddoctors. The idea was to post doctors in schools to provide health services.However, the exact role and functions of these doctors was not thoughtthrough clearly. No job descriptions were developed and practically no fundswere budgeted other than for doctors' salaries. In fact, few of the doctorshave done any work in schools since the start of the program. Most of thedoctors in the school health program are currently working in governmenthospitals and other government health facilities.

Analysis

2. Several roles/functions have been suggested for the doctors in theschool health program: immunization, growth monitoring, health screening andhealth education. An analysis of whether these are appropriate functions fordoctors to perform in schools follows.

3. Immunization. Childhood immunizations are an important means ofpreventing childhood disease. Standard immunization practice calls for DPT,OPV and BCG as a series that is best completed within the first year of life.A DT booster is recommended at age 5 and every 10 years thereafter.

4. In the United States and many other countries, all children enteringschool are required to submit proof that they have received all immunizations.This is largely a clerical function on the part of the schools.Immunizations are generally not administered in schools.

5. It is difficult to see how child immunization would fit into a schoolhealth program. Children should have received all of their immunizations byage one. By age five, when they enter school, children have passed theirgreatest risk for these diseases. It is recommended here that all children berequired to have their immunizations before entering school. However, due toproblems with the cold chain and logistics, it is not recommended thatchildren receive immunizations in school.

6. Growth Monitoring. The best indicator of child health and nutrition isgrowth. Child growth is measured by weight, head circumference, and height.There are well established norms for child growth, and children who fall belowthe 25th percentile should be targeted for special attention. The mostcritical period of child growth is the first three years of life. This is thetime when the greatest relative increase in size and functional development ofmajor body systems takes place. It is also the time when intervention (in theform of nutritional supplements, changes in diet, etc.) is most effective. Bythe time children enter school, most of the damage from malnutrition isirreversible.

7. Therefore, growth monitoring and nutritional intervention are mosteffective during the first three years of life. A school health program toperform these functions would be too late to have any significant effect onchild h(ealth. It is not recommended that schools undertake to provide agrowth monitoring function.

8. Health Screening. General health screening can discover some congenitaland developmental problems. Some of these are amenable to specialisttreatment to mitigate their ill effects. However, the incidence of these

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problems among school-age children is generally low. At any rate, generalhealth screening of school children could be carried out in governmentclinics, which would be a more appropriate setting for such activity.

9. Health Education. Health education covering topics such as sanitation,hygiene, clean water, proper nutrition, and (for older children) drug abuseand STD/AIDS avoidance is important and very cost effective in preventingillness. However, education is best done by teachers. Doctors are nottrained educators and they are not trained in health education curriculum.Use of doctors for health education is not a good use of their skills. It isnot recommended that doctors undertake to provide health education in theschools.

Conclusion

10. The above analysis fails to find any appropriate role for doctors inschools. While a strong program of health education in the schools would be ahigh priority, it should be conducted by the teachers themselves.

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PAKISTAN

TOWARDS A HEALTH SECTOR STRATEGY

ANNEX 5

GOVERNMENT HEALTH EXPENDITURE

- 84 -

Table 1PAKISTAN - TOTAL GOVERNMENT HEALTH AND POPULATION WELFARE EXPENDITURE, 1991/92 TO 1997/98Revised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/98

Figures in Rs. Million _

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

1. Federal Ministry of Health_ 1.1.Current 757 994 1119 1025 1104 1193 13581.2. Development 531 189 706 1573 2290 2324 21901.3. Total 1288 1183 1825 2598 3394 3517 3548

2. Northern Areas2.1. Current 70 69 79 92 99 125 1372.2. Development 29 49 42 40 42 52 1082.3. Total 99 118 121 132 141 177 245I I

3. Azad Jammu and Kashmir3.1. Current 206 223 237 307 312 409 4193.2. Development 58 58 60 104 92 99 1893.3. Total 264 281 297 411 404 508 608

4. FATA4.1. Current 95 92 141 201 193 1994.2. Development 58 34 63 63 131 1074.3. Total 153 126 204 264 324 306

5. Punjab5.1. Current 2584 3250 3683 3922 4524 5582 64305.2. Development 1022 1220 930 1522 1104 1343 23925.3. Total 3606 4470 4613 5444 5628 6925 8822

6. Sindhi6.1. Current 1557 1388 1559 1784 2468 2629 29566.2. Development 463 453 715 673 713 461 5206.3. Total 2020 1841 2274 2457 3181 3090 3476

7. NWFP7.1. Current 900 1022 1179 1414 1703 1972 21567.2. Development 440 406 629 847 590 492 2787.3. Total 1340 1428 1808 2261 2293 2464 2434

II8. Balochistan

8.1. Current 483 565 648 748 823 885 11228.2. Development 133 204 344 415 493 437 3828.3. Total 616 769 992 1163 1316 1322 1504

9. Total Government Health Expenditure9.1. Current ____6557 7606 8596 9433 11234 12988 147779.2. Development 2676 2637 3460 5237 5387 5339 61669.3. Total 9233 10243 12056 14670 16621 18327 20943

1 0. Ministry of Population Welfare 763 855 794 1077 1389 1460 2073

1 1. GDP at Market Prices 1211400 1341600 1564600 1866300 2214300 2503250 2932000

12. Total Government Health Expenditure I______as a Percentage of GDP 0.76 0.76 0.77 0.78 0.75 0.73 0.71

13. Population Welfare Expenditure asa Percentage of GDP 0.06 0.06 0.05 0.06 0.06 0.06 0.07

Notes: (a) From I993/94 onwards, the development expenditure figures include an estimate of expendturesfinanced with Foreign Project Assistance. I I i I(b) The figures in this table do not include health expenditures of local governments.lSuch information is not readily available in Pakistan.

Sources: Budget documents; Planning Division estimates (development expendRures); for ForeignProject Assistance, World Bank estimates and SAPP Operational Plans.

Table 2 PAKISTAN - CALCULATION OF INCREASES IN GOVERNMENT HEALTH EXPENDITUREIN REAL TERMS, AND IN REAL PER CAPITA TERMS, 1991/92 TO 1997/98

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

1. Total Government HealthExpenditure, Rs. Million, .Current Prices _ 9,233 10,243 12,056 14,670 16,621 18,327 20,943

2. GDP Deflator, 1990 = 100 124.5 135.2 152.9 175.6 193.2 214.5 238.1

3. Population, Millions 117.316 120.835 124.45 128.01 131.63 135.45 138.9

4. Total Government Health 00

Expenditure in Constant 1990 Prices,(a) In Rs. Million 7416 7576 7885 8354 8603 8544 8796(b) As an index, with 1991/92=100 100 102 106 113 116 115 119

5. Per Capita Government HealthExpenditure in Constant 1990 Prices

(a) In Rs. 63 63 63 65 65 63 63(b) As an index, with 1991/92=100 100 100 100 103 103 100 100

Sources: Budget documents; Planning Division estimates (development expenditures); Economic SurveyIfor population estimates. I

Table 3 | IProvincial Health Expenditure and Total Expenditure, 1991/92 to 1997/98Rs. Million I I I I I IRevised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/98

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

1. Punjab _

______ 1.1. Health Expenditure 3606 4470 4613 5444 5628 6925 88221.2. Total Expenditure 48422 56908 58358 72123 87376 88471 1003641.3. Health as a Proportion of Total 0.074 0.078 0.079 0.075 0.064 0.078 0.088

2. Sindh

2.1. Health Expenditure 2020 1841 2274 2457 3181 3090 34762.2. Total Expenditure 23616 25095 28271 38775 47142 47298 49821 x2.3. Health as a Proportion of Total 0.085 0.073 0.08 0.063 0.067 0.065 0.070

3. NWFP __

3.1. Health Expenditure 1340 1428 1808 2261 2293 2464 24343.2. Total Expenditure 17618 18468 21400 26665 27555 28161 330483.3. Health as a Proportion of Total 0.076 0.077 0.084 0.085 0.083 0.087 0.074

4. Balochistan

4.1. Health Expenditure 616 769 992 1163 1316 1322 15044.2. Total Expenditure 10815 11107 13234 13794 15587 16059 183624.3. Health as a Proportion of Total 0.057 0.069 0.075 0.084 0.084 0.082 0.082

Sources: Budget documents; Planning Division estimates (development expenditures); for ForeignProject Assistance, World Bank estimates and SAPP Operational Plans. I

____ ____Table 4|jj j j

SAP Health Expenditures and Total Health Expenditures, 1991/92 to 1997/98Rs. Million I I I I I rRevised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/98

1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98

1. SAP Health Expendi tures,National Total

1.1. Current 3143 3859 4534 5715 71591.2. Development 1684 3648 3708 3344 49661.3. Total . 4827 7507 8242 9059 12125

2. Total Government Health Expenditure,SAP plus non-SAP .F..

2.1.Current 6557 7606 8596 9433 11234 12988 147772.2. Development 2676 2637 3460 5237 5387 5339 61662.3. Total | 9233 10243 12056 14670 16621 18327 20943

3. SAP Health Expenditure as aProportion of Total Govt. Health Exp.

. I I I"13.3. Current j 0.37 0.41 0.40 0.44 0.483.2. Development 0.49 0.70 0.69 0.63 0.813.3. Total _0.40 0.51 050 0.49 0.58

GDP Deflator, 1993/94=100 100.00 114.84 126.35 140.28 155.72

4. SAP Health Expenditure in Constant. 1993/94 Prices, Rs. Million

4.1. Current ____._= 3143 3360 3588 4074 44.2. Of which non-salary _ 937 925 988 1207 13614.3. Development [ _ 1684 3177 2935 2384 31894.4. Total 4827 6537, 6523 6458 7786

5. SAP Health Expenditure in Constant1993/94 Prices, As an Index, with 1993/94=100

5.1. Current _ _ _ 100 107 114 130 1465.2. Of which non-salarv I 100 99 105 129 1455.3. Development | 100 189 174 142 1895.4. Total |___ 100 135 135 134 161

Sources: Budget documents; Planning Division estimates (development expenditures); Social ActionProgram Project Operational Plans. Figures in constant prices deflated _

by the GDP deflator. |_j___*

- 88 -

_______ _______ Table 5_____ -P SPASTAN - SAP EXPENDITURE IN THE HEALTH SECTOR, 1993194 TO 1997/98

Reuised Estimaltes or Provisiorml Acltuaks for 1993/941 97: t Budget Estiffates for 1997'98Figues In Rs. Muon

1993/94 1994/95 1995/96 1996/97 1997/98

1. Federal Mnstry of Healh_1.1. Cureni I 0 0 0 3 4

-Of wtich non-salay..... 0 0 0 0 11.2. Deve= ment 336 1200 1953 1450 2028

=_____ =_____ =_____ -Of whichbudget 336 12D0 1953 1450 1 890______ ______ ~~~~-Of wiNch FPA 0 90 96 148 138

1.3. Total SAP 336 1200 1953 1453 2032

12. Northern Areas2.1. Current 58 92 99 111 137

_____ ~~~~~~~~-Of wVchnonl-salay 8 1 3 39 33 39-Nor-salearyAotalctwrent 0.14 0.14 0.39 0.30 0.28

2.2. Development 26 29 23 15 100-Of whch tzdget 26 29 23 15 20-Oft wich FPA 0 0 0 0 80

2.3. Total SAP 84 121 122 12t 237

3. Azad Jarnru and Kashn ir3.1. Current [ 151 179 208 268 323

-Of which nor,salary 38 46 74 92 122-Non-salaryitotal crrent 0.25 0.26 0.36 0.34 0.38

3.2. Development 32 41 50 84 172-Of wNchtbuget 32 41j 50 84 112-Of _chnch FPA 0 0 230 2 60

F2= ~~~~~~~~~3.3. Total SAP 183 220 258 352 495

4. 1. Current 92 141 j 157 16' 199I I I I ~~~~~~~~-atwhchnna I I '° 301 35 45 46

-Non,salryitotal currentl 0.1 0.21 0.21 0.24 0.234.2. Devebopm,ent r 341 625 63 51 107

-O i vthch budge i_ | 341 62j 63 5t1 107-Of wich FPA 20 3 26 22

4.3. TotalSAP j_ j_|_i269 2036 220 231 306

7S. Purjab5.1. Current 1315 15771 1825 2610 3079

-Of which non-salary 364 468 513 825 319-Non-salryAotal cument 0.28 0.30 0.28 0.32 0.31

| 5.2. Deveoprment 34397 3 845 575 740 1597-Ofwnch budgetl 2981 5111 550 390 725

l l | |~~~~~~~~~O -wtnchFPA 99, 3341 25 350 872h g e 1 ~~~~~~~5.3. TotaltSAP 17121 2422} 2400 335C 4676

7 j 1 j ~~~~~~~6.1. Current j5967 866t1 11051 1078 .. 1608-Of whichnon-salary 135 170 2304 228 340-Non-salaryeotal current j__ 0.23 0.28 0.21 0.21 0.21

6.2. Daybrent 3184 6071 337 3434 4916__I ____ -of which budge 230 367 262 223 236

I____ i__ |_| -Of which FPA 688 140 75 920 1806.3. Total SAP Healh9148 1368| 1442 1421 2024

1 17. NV SFP | l l t r lI I j j ~~~~~~~7. 1. Current i i 4911 5t0 59 844 996

-0 Ah cnon-salary 2101 163j 186, 255 319

| |7.2. Devb | | 357 4531 153 °1390 0.32I I I -awn~~~-O Mich Wdget 2421 2711 93 40 150I [ |~~~~~~~o awNh cFPA | 115| 6| 6 150 64

l I I 1 ~~~~~~~7.3. Total SAP j j | 8481 9633 744 1034 1210

I I 1 16~~~~. Babchstan _8 .1. Curfrent | 4401 4991 549 616 813

l I l l -~~~~~~~~Nor,selaryAtotal ctrrent| 0.39 0.34i 031 02t5 0302L | 4 j ~~~~~~~8.2. Develcopment 1841 4211 458 323 332

j l l -awhichbuct-Of W j 118j 2311 258 167 226-Ofwhch FPA I 661 1901 200 156 106

|8.3. Total SAP | 624| 9201 1007 939 1145

I I 1~~9. Total SAP Government HeattEpedue

-Ofwhchnnon-salary 913'43 1062 14534 t5693 -2120j l j -~~~~~~NorselabryAoteb current 0.30 j 0.28 j 0.28 0.30 0.30

19.2. Developmnent f - I 16841 36481 3708 3344 4966I~~~~~~~~~~~~O w1e bL -w irn drgt | | 1316| 27127 3252 2420 3466r [ | -otwnich FPA | j j-O 368j 936j 456 924 1500

j | j ~~~~~9.3. TotalISAP Healt h 48271 75071 8242 9059 12125

| Sources: SAPP OperatonlaPlans, intemnal World Bark records, goverriment budg et docurnents