Ibrahim Kasirye makes his submission during a public dialogue on the Health Sector Budget for FY 2018/19. Photo by Mouris Opolot
The Principal Research Fellow Economic Policy Research Centre (EPRC), Dr. Ibrahim Kasirye has said the health sector budget for FY 2018/19 falls short in ensuring progress towards meeting the goal of Universal Health Coverage (UHC).
Kasirye was part of the panel discussion during a public dialogue on the Health Sector Budget for FY 2018/19 hosted at Kabira Country Club on August 2, 2018, by Makerere School 0f Public Health (MakSPH) under its SPEED (Supporting Policy Engagement for Evidence – based Decisions) Project.
The health sector received 2,308.4 Billion Shillings in the FY 2018/19. Responding whether the population health got a good deal, Kasirye says this is a marginal increment since the budget allocation to the health sector was 1,824.1 Billion Shillings in FY 2017/2018.
“Although this is seen as an improvement, it falls short of most standards for ensuring progress towards adequate healthcare financing, especially to meet the goal of Universal Health Coverage,” he said.
He added that in the current financial year, the health sector allocation constitutes 9.2% of the national budget, which is still below the 15% Abuja commitment.
In terms of recommended per capita public spending on health, Kasirye observed that Uganda still falls short of benchmark standards such as $34 (conservative figure), $60 or $86 per capita public spending on healthcare per year.
Per capita conversion of the current budget allocation to health (2,308.4 Billion Shillings) means that 60,700 Shillings will be spent per person. Kasirye says this is way below what is required to deliver the minimum health care package and Universal Health Coverage.
However, Kasirye believes that once the resources allocated to health and other sectors that influence health (e.g. sanitation, water & environment including education) are efficiently utilized with the lens of addressing health as a multi-sectoral issue; then current government financing for health and related sectors that influence health would go a long way in achieving our health aspirations and improving health outcomes.
Sanitation, water & environment, a critical sector which influences health, has been allocated 1,265.8 Billion Shillings in FY 2018/2019. Another related sector is education. The question then is whether these influential sectors recognize health as a multi sectoral issue that needs to be addressed by all relevant sectors.
Health plays a central role in human capital development. The population must be healthy to actively and productively contribute to the economy. Vast empirical evidence shows that health is critical for boosting per capita income, economic growth, and overall development through improvement of labour productivity. It is therefore paramount that the government adequately invests in the health of the population.
Leveraging future government funding for health
Remarking on how the health sector can leverage more funding from the government budget in the future, Kasirye raised the need to address critical resource management challenges related to; wastage, and inefficiencies in resource allocation and absorption in the health sector.
“First reduce resource wastage – corruption scandals, cases of drugs expiring due to inefficient systems of medical logistic management,” he said wondering whether the health sector has capacity to absorb more resources than what it currently gets.
According to Kasirye, innovative domestic resource mobilization could also support the health budget. “First, and broadly, improve domestic resource mobilization by improving tax-to-GDP ratio,” he said warning that this requires efficiency in tax administration and effective tax policies.
Kasirye also calls for more evidence-based advocacy on the importance of health to the economy and political will to improve population health.
Other innovative funding mechanisms and tax reforms include the use of “Sin Tax”, Private Public Partnership and promotion of resource pooling by government. The latter among others entails having National Health Insurance where funds are allocated to indigent persons.
Future health funding trajectories vis-à-vis projected national economic growth
Economic growth is expected to increase from 5.8% (FY 2017/18) to 6% (FY 2018/19). The growth is projected to average at about 6 – 7 percent over the medium term (2018/19 – 2022/23) (MFPED – BTTB FY 2018/19). This projected expansion in the economy implies that there will be an increase in resources available in the economy.
For example, government resource envelope for the FY 2018/19 (net of arrears, appropriation in aid, and debt repayment) is estimated at 17,358.7 Billion Shillings. This is projected to rise by about 57%, to 27,238.5 Billion Shillings by 2022/23.
Kasirye believes that the rise in available government resources can translate to increase in domestic funding for the health sector, and perhaps for other sectors as well.
He however says that the extent of increment in health funding will depend on a number of factors that have to be addressed. These include among others; political will to improve population health through increased public investment in health; and government prioritization of health besides competing needs from other sectors.
External health financing
Pertaining to external financing, the health sector has been (and is still) a beneficiary of very large amounts of external financing, as compared to other sectors.
However, the projected trajectory for overall external financing is not rosy. The estimate for overall external financing for the FY 2018/19 is 8,023.5 Billion Shillings, and in the medium term, this is projected to fall to 4,305.2 Billion Shillings by the FY 2022/23.
Kasirye says Ugandans should expect a declining trend in Development Aid for Health. “This points to the fact that sustainability challenges of external financing is real, and thus the government must bolster domestic financing mechanisms as a long term solution to healthcare financing,” he notes.