Budget in the health sector: expenditure or investment?

Parliamentarians should debate not only whether the doctor reached my village or not, Citamol reached or not, but also how to build the national health system. The health budget should be considered an investment, not an expense. It should be understood that health is not a technology, but a political agenda.

Baishak 28, 2082

Dr. Lochan Karki

Budget in the health sector: expenditure or investment?

We use Google Cloud Translation Services. Google requires we provide the following disclaimer relating to use of this service:

This service may contain translations powered by Google. Google disclaims all warranties related to the translations, expressed or implied, including any warranties of accuracy, reliability, and any implied warranties of merchantability, fitness for a particular purpose, and noninfringement.

An investment of $1 in childhood vaccinations yields a return of $16. A $1 investment in the prevention of serious non-communicable diseases yields a return of $7. An investment of $1 in the field of maternal and child health gives a return equal to $4.20.

1 dollar invested in the prevention of tuberculosis gives a return equivalent to 15 dollars . $1 invested in nutrition awareness yields a return of $12.20 . From the World Health Organization to the World Bank, studies conducted in the field of health at various times have shown the details of health expenses and their returns.

These details also confirm that spending in the health sector is not an expense but an investment. The investment will give many times more returns in the future . "Investment return in the health sector"  Even though the studies show the fact that the health budget in Nepal is still lost as expenditure. Because of this, the health sector has not been prioritized by the government and the budget has also been very low. 

In low-income countries like Nepal, government investment in health needs 86 US dollars per person, according to the study of the 'Global Framework for Health Financing'. However, according to the data of the Ministry of Health, the per capita expenditure of government investment in health in Nepal is only 20 US dollars. This shows that government investment in the health sector is less than 4 times .

The World Health Organization has been suggesting that at least 10 percent of the total budget should be allocated to the health sector. In Nepal, health gets only 4 to 5 percent of the total budget. The 'National Health Finance Strategy 2080-90' brought by the Government of Nepal has also emphasized that the health budget should be 10 percent. In the strategy, it is mentioned that at least 10 percent of the budget of the union, state and local levels will be invested in health. But there is a danger that this topic will be limited only to paper . Even after two years of passing the strategy, the government has not taken steps to increase the budget. It is difficult to find MPs who raise their voice in the parliament that the budget should be according to the said strategy. 

The budget session of the Federal Parliament is going on now. The government is preparing to submit the budget. As in previous years, health sector is not likely to be prioritized this year. Because the parliamentarians have not been able to raise their voices in the parliament on health issues related to life and death. This year too, health has received a ceiling of around four percent of the total budget. There are no parliamentarians who hit the table in the parliament saying that this ceiling is too low for the health sector . Due to the limited budget, it is becoming difficult to deliver quality health services to all citizens. It seems that the MPs have gone to the Ministry of Health to complain that doctors have not reached the district. But they are not interested in digging the reason behind it. 

There is a need to change the view of the health budget as only an expenditure . Investment in the health sector is a long-term investment in nation building. Healthy citizens are the main cornerstone of the country's economic and social development.

Although the constitution establishes health as a fundamental right of citizens, the reality is different. The budget of the health sector is less allocated and it is not an effective expenditure.  Due to the fact that the allocated budget cannot be spent, the traditional way of budgeting is to create programs accordingly. Because of this, it has become very difficult to achieve the goal of universal health access and quality health services.

Health budgeting is not based on evidence-based planning and identification of needs. The need for manpower, equipment, infrastructure and services is not analyzed scientifically. The budgeting work of the health sector should be based on 'Evidence' and 'Need'. But so far, the health budget is only being created based on the intentions of some division and department heads. Which is wrong practice . For example, the burden of non-communicable diseases has increased dramatically in Nepal recently. What kind of program will be done in which region of the country for its prevention and control? that  Needs identification and evidence-based planning not done . But the budget is put in full swing. There is a significant improvement in maternal mortality in Nepal. But in Lumbini province, many mothers are still dying. Budget and program should be made after identifying the reason for that. But here, the same budget and programs are made throughout the country . Because of this, a large part of the budget is spent in ineffective areas. 

Many developed countries in the world have reaped the benefits of high investment in the health sector . Countries such as Canada and the UK have implemented universal health care systems, where citizens receive free health care as needed. This has improved the living standards of the citizens there and has also contributed positively to the economic development of the country. Likewise, South Korea's investment in health research and development has made it a world leader in medical technology.

The GDP of countries that prioritize the health sector is also seen to be high . For example, the United States spends 17 percent of its total GDP on health care, creating the highest labor productivity rate in the world. Countries like Sweden, Norway, and Denmark have achieved economic growth due to a healthy population being more productive due to large investments in public health services.

The neighboring country of Bhutan has allocated a large part of its national budget to health care. Bhutan's health policy focuses on health equity. Special funds have been earmarked for remote areas . The government provides services to citizens even in the most inaccessible parts of the country . Bhutan provides citizens with most healthcare services free of charge and some at a very low cost.

The Covid-19 pandemic has further highlighted the importance of investing in strong health systems. Countries with adequate budgets have effectively dealt with the epidemic and managed to minimize economic losses . Countries such as South Korea, Germany, and New Zealand invested in strong public health systems, which reduced economic instability in those nations . Nepal, like other developing countries, faces significant challenges in health care financing . 

Health is the basis of any nation's social and economic development. However, spending in the health sector is often viewed as a financial burden, whereas it is a strategic investment . which increases productivity, reduces poverty and promotes long-term economic growth . 

According to the World Health Organization, global health spending reached $9 trillion in 2022. Which is about 11 percent of the total world GDP . Developed nations have considered health as an important investment, which has increased the average life expectancy of the population and improved labor productivity . 

Early investment in health sector reduces costs in the long run . Preventive services, vaccination campaigns and primary health care services reduce the risk of chronic and complex diseases and reduce treatment costs . Japan's universal healthcare system, which focuses on prevention and early treatment, has ensured a high average life expectancy and has managed to keep overall healthcare costs low compared to other developed nations.

Investing in the health sector seems to increase productivity, reduce poverty and maintain economic stability in the long term. Therefore, the government of Nepal needs to give more priority to the health budget, which will help ensure long-term economic and social benefits. Since only a strong health system will make any nation prosperous, it is necessary for Nepal to understand health expenditure as an investment and not an expense.

Now the traditional style of budgeting should be abandoned . The budget should equally cover all the three sectors like service delivery, education and research . Sectors such as drinking water, sanitation, nutrition, education, which are not directly related to the health sector but have an impact on the health of citizens, should also be given a proper place in the budget. For long-term solutions, investment in 'preventive' health services that prevent disease should be increased . Investments in areas such as public awareness programs, healthy lifestyle promotion and environmental improvements will help reduce future treatment costs . 

Health is not only a matter of health workers and the Ministry of Health . This is a political agenda . At this important stage of budget formulation, all the members of the parliament should strongly raise the need and importance of health budget . Everyone should remember that the investment in the health of the citizens is the investment in the future of the country. When the health budget is being discussed in the parliament, the parliamentarians should debate not only whether the doctor reached my village or not, Citamol reached or not, but also how to build the national health system . Health is not a technical agenda, but a political agenda . Therefore, it is expected that every political party will be able to hear the voices of increasing the health budget and building the system when the budget is discussed in the House.

(Professor Karki is the Dean of the National Academy of Medical Sciences .)

Dr.

Link copied successfully