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Nepal National Health Accounts 2003/04 to 2005/06 2009

Nepal National Health Accounts Second Round: 2003/4 to 2005/6

Health Economics and Financing Unit (HEFU) Ministry of Health and Population

Kathmandu, Nepal July 2009


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Published by: Ministry of Health and Population Government of Nepal Copyright © 2009 by Ministry of Health and Population This document may be freely copied and distributed on the understanding that full acknowledgement is made to the Ministry of Health and Population, Health Economics and Financing Unit, Contact For further information on the study please contact Health Economics and Financing Unit Policy Planning and International Cooperation Division Ramshahpath, Kathmandu, Nepal Ministry of Health and Population Email: [email protected] Tel: 00977 1 4262706


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Table of Contents

Preface ..................................................................................................................................... iii

Acknowledgements ................................................................................................................ iv

Acronyms ..................................................................................................................................v

Executive Summary .................................................................................................................1

Major findings ........................................................................................................................ 1

Recommendations .................................................................................................................. 3

Chapter I: Introduction ...........................................................................................................5

1.1 Background on the National Health Account .................................................................. 5

1.2 Definitions of National Health Accounts ......................................................................... 6

1.3 Rationale for the Study .................................................................................................... 7

1.4 Objectives of the Study .................................................................................................... 7

1.5 Outputs ............................................................................................................................. 8

1.6 Methodology: ................................................................................................................... 8

1.7 Limitation of the Study .................................................................................................. 11

Chapter II: Overview of Health Expenditure .....................................................................12

2.1 Introduction .................................................................................................................... 12

2.2 Total Health Expenditure ............................................................................................... 12

2.3 Total Health Expenditure Trend at Nominal and Real Price ......................................... 13

2.4 Health Care Expenditures in Relation to Gross Domestic Product (GDP) .................... 14

2.5 GDP Growth and Total Health Expenditure Trends ...................................................... 15

2.6 Effects of Exchange Rate fluctuation on Per-capita Income ......................................... 16

2.7 Comparative picture of Health Expenditure in SAARC Countries ............................... 16

Chapter III: Expenditures by Financing Source ................................................................18

3.1 Expenditure by Source ................................................................................................... 18


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3.2 General Government ...................................................................................................... 21

3.3 Private Sector Financing ................................................................................................ 21

3.4 Out-of-Pocket Payment .................................................................................................. 22

3.5 Rest of the World ........................................................................................................... 23

3.6 Health Care Expenditure by Funding Source and Function .......................................... 24

Chapter IV: Health Expenditure by Function ....................................................................31

4.1 Expenditure by Function ................................................................................................ 31

Chapter V: Health Expenditure by Provider ......................................................................40

5.1 Private Sector Providers ................................................................................................. 44

5.2 Non-Governmental Organization (NGO) Providers ...................................................... 46

5.3 Health Expenditure by Providers and Sources of Funding ............................................ 46

Chapter VI: Spending on Human Resource Development for Health..............................53

Chapter VI: Review and Analysis of Household Expenditure ..........................................55

7.1 Review of health in household expenditure ................................................................... 55

7.2 Household expenditure by category ............................................................................... 55

7.3 Household expenditure by Facility ................................................................................ 56

7.4 Inequality in Household Expenditure on Health ............................................................ 57

7.5 Household Expenditure by Gender and Age Group ...................................................... 58

7.6 Household Expenditure on Health by Geographical Region ......................................... 59

Chapter VIII: Conclusions ....................................................................................................61

References ...............................................................................................................................64

Annex 1: Classifications in the NNHA .................................................................................66

Annex 2 Total Health Expenditure by Sources, Function and Providers ........................73


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Preface

The report on Nepal’s National Health Accounts, 2003/04 – 2005/06, has been prepared by the Health Economics and Financing Unit (HEFU) and Ministry of Health and Population (MoHP) of the Government of Nepal. The HEFU and a number of other institutions have conducted studies to prepare the Nepal National Health Accounts. The main objective of the study is to compile, update, and present national health expenditures for Nepal in a systematic manner through the application of nationally and internationally recognized guidelines for data collection, interpretation, and analysis. The report presents disaggregated health expenditures from three perspectives: sources, providers, and functions of health care. The study covers the total national health expenditure for 2003/04 – 2005/06 by using primary and secondary data. The second round has attempted to produce separate accounts for human resource development. The data from the Nepal Living Standard Survey of 2003/04 has been used to estimate household expenditure on health care. The portion provided by other key providers – private for profit institutions and NGOs – has also been studied. I believe this report, as well as the database it has generated, will be extensively used by policy and decision makers, researchers, and academicians to gain a better understanding of the trends in health care financing, expenditure, and the target beneficiaries. I would like to thanks all the officials of HEFU and in the Policy, Planning, and International Cooperation Division of the MoHP for their efforts in undertaking this activity. I would like to thank Dr Y.B. Pradhan and his team for their efforts as coordinators and facilitators. Finally, I am grateful to the World Health Organization, Nepal for supporting the study. Dr. Dirgha Singh Bam Secretary Ministry of Health and Population Government of Nepal


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Acknowledgements

The second round of the NNHA incorporates the lessons learned from the second round of exercises. A number of new surveys have been carried out: Private Medical, Nursing and Paramedical Schools surveys, Private Hospital and Nursing Home surveys, DDC and VDC surveys on health expenditures, a health expenditure survey of State-Owned Enterprises (SoEs) and Autonomous Bodies, and a Donors' Expenditure Survey. To capture household expenditure on health care, data from the Nepal Living Standard Survey 2002/03 were analyzed and extrapolated. In the context of preparing this second round of NNHA, I would also like to thank Mr. Yogendra Chauchan, Undersecretary of Finance, Mr. Giri Raj Subedi, Senior Public Health Officer, and Prabha Baral, Statistical Officer at HEFU for their support and facilitation. I would like to convey my sincere appreciation to Mr. Babu Ram Shrestha, National Consultant; and Devendra Prasad Gnawali, GAVI for their excellent work. Once more, I do commend the hard work done by the writers to complete the first round of NNHA. I wish for its continuation in publishing future versions of the NNHA. The Ministry gratefully acknowledges the support, cooperation, and information provided by the external development partners (EDPs) and local governments: DDCs, VDCs, and Municipalities; and also the SoEs and private for-profits and not-for-profit institutions. Finally, the Ministry would like to extend their appreciation to the World Health Organization for its support in preparing the second round of the Nepal National Health Accounts. Dr Y.B. Pradhan Chief Policy, Planning, and International Cooperation Division, and Chairperson, National Health Accounts Committee, Ministry of Health and Population


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Acronyms

DDA Department of Drug Administration

DDC District Development Committee

DoHS Department of Health Services

EDP External Development Partners

EHCS Essential Health Care Services

EPI Expanded Programme on Immunization

EU European Union

FC Functions Code

FP Family Planning

GDP Gross Domestic Product

GP General Practice

HEFU Health Economics and Financing Unit

HERTI Health Education, Research, and Training Institutions

HH Household

HRD Human Resource Development

ICHA International Classification of Health Accounts

MCH Maternal and Child Health

NCF Nepal National Health Accounts Codes for Functions

NCP Nepal National Health Accounts Codes for Providers

NCS Nepal National Health Accounts Codes for Source of Funding

NEC NNHA Expenditure Classification

NGO Non Governmental Organization

NHE National Health Expenditure

NLSS Nepal Living Standard Survey

OECD Organization for Economic Cooperation and Development

OECD-SHA OECD - System of Health Accounts

OOP Out-Of-Pocket

PPP Purchasing Power Parity


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SHA THE System of Health Accounts THE

SIDA Swedish International Development Cooperation Agency

SNA-93 System of National Accounts

SoE State Owned Enterprise

STD Sexually Transmitted Disease

TCHE Total Current Expenditure on Health

THE Total Health Expenditure

THE OOP Total Health Expenditures of Out-Of-Pocket

THE PP Total Health Expenditure of Private Providers

TPF Total Public Funding

UHC Urban Health Clinics

USAID United States Agency for International Development

USD United States Dollars

VDC Village Development Committee

WB World Bank

WHO World Health Organization


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Executive Summary

Presently, analysis of the adequacy of health financing is examines the expense incurred by the Ministry of Health and Population (MoHP) alone. In fact, many other agencies are involved in Nepal’s health care financing as well. It is, however, not known to what extent these agencies are investing in health care. Without a better understanding of the sources and uses of health care in both the private and public sectors, it is difficult to determine how the government should respond to people’s increasing health care needs, and with what resources. National Health Accounts (NHA) is recognized as a useful tool for policymakers and managers to track public and private health care expenditures, from the sources of funding to where it goes, what kind of goods and services people purchase, and whom they benefit. This information will be of great help to the public, policymakers, and researchers in assessing the performance of the national health care system, in evaluating policies related to health expenditure, and in resource planning in the context of the government’s present free health care policy. The present study (2003/04 - 2005/06) is the second round of the Nepal National Health Accounts (NNHA), prepared by the Health Economics and Financing Unit (HEFU) of the MoHP. The report reviews and analyzes how funds are spent in Nepal’s health system from the perspective of providers, sources of financing, and functions. The NNHA provides national estimates of health expenditures for 2003/04, 2004/05, and 2005/06 of the three basic aggregates of national health accounting: National Health Expenditure (NHE), Total Health Expenditure (THE), and System of Health Accounts THE (SHA THE). NHE represents national health expenditures for all health care functions. Total health expenditure (THE) includes NHE plus the capital formations of all health care providers and expenditures on education and research. SHA THE is defined as THE minus expenditures on education and research.

Major findings

• Total health expenditure (THE), at nominal price, showed a rising trend throughout the review period (2000/01-2005/06). THE, at real price, also showed an increase up to 2004/05, but dropped to NRs. 27,355 million in 2005/06, down from NRs. 29,465 million in 2005/06.

• Analysis of sources showed government share in THE accounting for 23.7 percent, external development partner (EDP) contributions at 20.8 percent, and private sector contributions at 55.6 percent, in 2005/06. The share of out-of-pocket (OOP) expenditure of THE dropped from 62 percent in 2002/03 to 50 percent in 2005/06.


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• In total private financing, private household OOP expenditure alone accounts for around 90 percent of total private expenditure, with non-governmental organizations providing about seven percent, in 2006.

• International/non-governmental organizations (I/NGOs) contributions to THE rose to 17 percent in 2005/06 from only 2 percent in 1994/95 (Hotchkiss et al 1998).

• THE as a percentage of GDP was at 5.6 percent in 2004/05, but fell slightly to 5.3 percent in 2005/06. Despite this, private household out-of-pocket expenditures compared to GDP remained the primary source of expenditure. In 2005/06 the percentage of private expenditure stood at 3 percent of GDP while that of EDPs contributed at a rate of 1.1 percent of GDP. The share contributed by the government compared to GDP, on the other hand, is rising gradually and reached 1.3 percent in 2005/06 compared to less than 1 percent in 2000/01.

• The per capita health expenditure is estimated at NRs. 1355 in 2005/6, equivalent to USD 18.09, compared to NRs. 1,004 (USD 13.4) in 2002/03. In 2005/6 the per capita government expenditure on health care stood at NRs. 321 (USD 4.28), private per-capita expenditure at 753 ( USD 10.04), and the rest of the world at NRs. 281 (USD 3.75). The per capita out-of-pocket expenditure on health stood at NRS 675 (USD 9.0).

• In terms of function, medical goods dispensed to outpatients form the largest component in THE, followed by health-related functions, preventive health care and public health services, curative care services, and health programme administration, health insurance, and ancillary services.

• Analysis of provider data shows the expenditure made at the retail outlets and other providers of medical goods constituted the greatest portion of THE. A trend of growing expenditure is seen in hospitals and providers of ambulatory health care.

• As per the Nepal Living Standard Survey (NLSS) II, health expenditure accounted for 5.7 percent of total household expenditure in 2003/04. Additionally, a clear disparity exists by income group. As a percent of total household expenditure, the richest spend 7 percent on health while the poorest spend around 4 percent.

• The NLSS II shows that the household health expenditure is not fairly distributed. The poorest, it was found, were spending NRs. 124 on health whereas the richest were spending NRs. 2,046. These disparities in health expenditure exist across rural/urban areas and ecological regions.

• NGOs play important roles in health development, as the volume of their expenditure on health has increased significantly over the years. As a percent of THE, NGOs contributed 4 percent during the review period, primarily for essential health care services (EHCS).


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• Spending on human resource development increased dramatically from NRs. 4,836 million in 2003/04 to NRs. 6,145 million in 2005/06, mainly indicating an increase in the number of medical, nursing, and paramedical schools which saw a 62 percent increase in spending. The amount spent on human resource development compared to THE remains at 18 percent for 2005/06.

Recommendations

Nepal spends over 5.6 percent of its GDP on health. Although health outcomes have changed markedly in the last decade, the greater challenge is to increase the efficiency of the health system. Sri Lanka spends only 3.4 percent of GDP on health yet has a much better health outcome than Nepal: the neonatal mortality rate is 8 per 1000 live births, the infant mortality rate is 11 per 1000 live births, and the under-five mortality rate is 13 per 1000 live births; in Nepal, the neonatal mortality rate is 32, the infant mortality rate is 46, and the under-five mortality rate is 59 per 1000 live births. It is, however, worth noting that Sri Lanka’s GDP is more than triple that of Nepal while it has only two thirds the population. Furthermore, conditions in Sri Lanka and Nepal are vastly different, which makes the import of this comparison debatable. Nonetheless, the point is well taken that there is a need of improving the efficiency of the health system by reducing cost and/or improving the health outcomes. Although both I/NGO and government contributions to THE rose and out-of-pocket expenditures fell, there is still a need to continue and strengthen this trend by increasing general government and donor contributions. On a related note, as I/NGOs spending increases, as it has for the last ten years, there is a growing need to regulate their activities to assure equitable and efficient distribution of services. Some sort of regulatory framework is needed to maximize the service outputs of NGOs. Out-of-pocket expenditure was estimated based on the NLSS II conducted in 2002/03, but there are conflicting explanations for the decrease in out-of-pocket expenditures, including supply factors such as the rapid proliferation of private hospitals and nursing homes. On one hand, access to health care increased and one would expect a corresponding increase in out-of-pocket expenditure. On the other hand, user fees have been abolished for many services and products (such as IMCI, kala-azar, deworming, and family planning commodities) which should lead to a decrease in out-of-pocket expenditure. Additionally, the Department of Drug Administration estimated that drug consumption grew at an annual rate of 16 percent 2005, but one year later found a 15 percent reduction in drug consumption. Experts disagree on the cause of this. Finally, the Nepal Living Standard Survey was supposed to be conducted in 2007/08, but has not yet delivered the new data, further complicating an accurate estimate of out-of-pocket expenditures. In any case, what is clear is the current data is unreliable and that a survey will be needed to accurately measure out-of-pocket expenditure.


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The present NNHA study benefited significantly from the framework provided by the first round Nepal National health Account, which was developed according to OECD guidelines. Although this framework has been beneficial, there are still some challenges to further integration of the SHA. Some health transactions or services common in other countries are not available in Nepal, including day care services, social security, and to a large extent, private health insurance. Additionally, there is some confusion surrounding the functional codes, which lacks clarity in general and needs to more accurately reflect the reality on the ground. There are some health activities which do not fit in any of the functional codes. In the absence of specific functional codes, activities were categorized according to best guess. It is in this context the following recommendations are made:

• In the context of the new roles of the health system, the functional code for each NHA function should be made clear to avoid confusion in assigning the given health activities to the appropriate functional code.

• Prevention and public health functions included in the ICHA-HC do not cover all fields of public health, in the broadest sense. These broadly defined public health functions, such as emergency plans, environmental protection, water supply and sanitation, and so forth, are not included as health expenditures, but they certainly affect the quality of life. Thus, it stands to reason to consider these functions in the context of public health.

• Prevention and promotive programmes should be given a separate a sub-functional code under HC 6 itself. Preventive programmes might consist of child health, reproductive health, and disease control. Promotive programmes, on the other hand, might include nutrition programmes, human resources development, environmental health programmes, and non-communicable disease programmes.

• Because a great deal of information from out side the MoHP is needed in compiling the NNHA, a system will have to be developed to collect and compile health-related expenditure data from other areas.

• Periodic surveys of VDCs, municipalities, and DDCS would be both costly and time-consuming. Instead, a coordination mechanism should be developed at the central and local level enabling a regular flow of information from local bodies in coordination with the Ministry of Local Development (VDCs, Municipalities and DDCS) and DPHOs to produce and update the NNHA.

• Institutionalization of the NNHA is critical, so the attention it has been getting from policymakers is encouraging. This makes it especially important for the HEFU to update the NNHA on a regular basis, and HEFU staff should be trained accordingly.


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Chapter I: Introduction

1.1 Background on the National Health Account

The Government of Nepal has recognized health care as a basic human right, as acknowledged in the Interim Constitution of Nepal 2063 (2007), and has declared that it s the state's responsibility to ensure people's health. The vision of an inclusive society, where people of all races and ethnic groups, genders, castes, religions, political beliefs, and socioeconomic status live in peace and harmony, and enjoy equal rights without discrimination, as outlined in the Interim Constitution, is the guiding principal for all policies plans and programmes of the Ministry of Health and Population (MoHP). This has placed increasing pressure on the government to improve the delivery of health services, quantitatively and qualitatively, down to the grassroots levels. In with the spirit of those commitments, the MoHP has produced the 10-Points Position Paper for achieving higher standards of health for all Nepali people, with priority given to economically and socially marginalized individuals, genders, ethnic groups, and geographical areas. The Three-Year Interim Plan also emphasizes primary health care for poor and excluded groups, aiming to eliminate geographical, economic, gender-based, and cultural barriers to ensure access to health care services for all. As a result, universal free care has been adopted as the strategy for increasing access to and utilization of quality health services. The government has intensified its efforts to formulate appropriate policies, developing and strengthening the required institutional frameworks and programmes for effective health service delivery. Lobbying for development aid and poverty alleviation has also been stepped up. The government has adopted a long-term plan for fostering an atmosphere conducive to providing quality health services to the people. The interim plan has adopted a strategy of preparing policies allowing for the involvement of different types of private and cooperative organizations in the health sector. These steps are expected to increase people's demand for health services dramatically, the financial implications of which may be substantial. Consequently, resource plan must be developed. But in order for that to take place, there is an urgent need to understand how health care is currently financed and how efficiently funds are used in light of the limited resources. Presently, the analysis of the adequacy of health care financing is done exclusively from the perspective of expenditures funded by the MoHP. In fact, many other agencies are also involved in Nepal’s health care financing. Apart from the MoHP, a number of other ministries and private agencies operate health facilities. It is not, however, known to what extent these agencies are investing in health care. Without a better understanding of the sources and use of health care funding in both the private and public sectors, it is difficult to determine how the government should respond to increasing resource limitations and changing donor commitments. No mechanism has yet been used to regularly track such


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public and private health expenditures. The National Health Accounts (NHA) will thus be a useful tool for policymakers and managers involved in health sector planning and reforms. The NHA provides answers to four basic questions:

• Where do the resources come from? • Where do the resources go? • What kind of services and goods do they purchase?

• Whom do they benefit?

The above information will be useful for the public, policymakers, and researchers in assessing the performance of the national health care system, evaluating policies related to health expenditure, and for resource planning in the context of the government’s free health care policy.

1.2 Definitions of National Health Accounts

There is no internationally accepted definition of what constitutes health expenditures, but for the purpose of this study it is defined as all expenditures or outlays for prevention, promotion, rehabilitation, and care; population activities; as well as nutrition and emergency programmes for the specific objective of improving health. The NHA constitutes a systematic, comprehensive, and consistent monitoring of resource flows in the country's health system. It is a tool specifically designed to inform the health policy process, including policy design and implementation, policy dialogue, and the monitoring and evaluation of health care interventions. It provides the evidence to help policymakers, non-governmental stakeholders, and managers to make better decisions in their efforts to improve health system performance. Implemented on a regular basis, the NHA can track health expenditure trends, an essential element in heath care monitoring and evaluation. National accounts are used to present the trend of countries’ health economy, which can serve as the basis of design of health care reform policies that have the purpose of improving the efficiency and financial viability of health care delivery. The Nepal National Health Accounts (2000/01-2002/03) was the first officially produced report that provided national estimates of health expenditure for the years 2000/01, 2001/02, and 2002/03. It has already served as a basis for suggesting future reforms within the health care sector. The present study is the second round of the Nepal National Health Accounts (NNHA) as part of the regular update. As with the first round, this study provides estimates of health expenditures by source, by functional use, by provider, and by consumer, on an aggregate basis. It also provides national estimates of health expenditure in Nepal with an extensive breakdown of public and private spending, including donor expenditure by health care


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function. Health expenditure in this NNHA has been estimated using a National Health Accounts approach, in accordance with the latest international practices and developments. As with the first round, the second round will also produce a set of internationally compatible and acceptable health expenditure estimates, as per the conceptual framework of the NNHA, that address the needs of policymakers and managers. Financing information is an essential input for strengthening policies to improve the functioning of health systems. However, an NHA is not the answer to all health policy questions. NHAs focus on the financial dimensions of a health system, and NHA data covers health expenditures. The accounts themselves do not distinguish between effective and ineffective expenditures. To answer many policy questions, NHA information must be combined with non-financial data from sources such as epidemiological studies, population surveys, and the like.

1.3 Rationale for the Study

The first round of the Nepal National Health Accounts took place in December 2006 and has been used as a tool for formulating health sector policy and for the implementation of the policies. But new data are needed to assist policymakers and planners in formulating new policies and implementing them. The NHA helps the government and the private sector to manage national health expenditures more efficiently and effectively, strengthens public trust and confidence in government policies, and builds on the national health system by making programmes needs-based and practical. In essence, it helps:

• To evaluate health care expenditures in relation to Nepal’s Gross Domestic Product

• To provide baseline and trend data for monitoring the effect of health sector reform on resource allocation

• To improve efficiency in the use of scarce resources • To improve equity in financing and care utilization

• To compare Nepal’s experiences with those of other countries • To identify information gaps and needs

1.4 Objectives of the Study

The overall objective of this study was to develop the second round of the NHA. The specific objectives are as follows:

• To retrieve the data from the public expenditure survey and enter it into the NNHA framework


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• To retrieve the data from the drug expenditure survey conducted by the Department of Drug Administration (DDA) and enter it into the NNHA framework

• To estimate the household out-of-pocket expenditure on health on the basis of the NLSS 2003/04

• To prepare the expenditure data of for-profit and not-for-profit medical schools, nursing schools, and paramedical schools for the NNHA framework

• To retrieve the expenditure data of for-profit and not-for-profit private hospital/nursing homes

• To analyze all data on the basis of sources, functions, and providers classifications, according to the NNHA framework

• To prepare the report of the second round NNHA

1.5 Outputs

• Acceptable NNHA report 2003/04/-2005/06 • Updated datasheets of the NNHA

1.6 Methodology:

The Nepal National Health Accounts, 2000/01-2002/03 endeavours to provide a nationwide estimate of basic aggregates of national health accounting. These are: (a) National Health Expenditure (NHE), representing the health expenditures of the nation during the accounting years comprising expenditures on all health care functions; and (b) Total Health Expenditure (THE), which comprises NHE plus capital formations of all health care providers as well as expenditures on health education and research during the accounting period. NNHA estimates are based on the concepts and accounting framework of the Organization for Economic Cooperation and Development-System of Health Accounts (OECD-SHA) manual. Availability of the World Health Organization-World Bank-United States Agency for International Development (WHO-WB-USAID) -funded "Guide to Producing National Health Accounts" also facilitated in creating the NNHA. The compiled accounts are internationally comparable, as the Nepal National Health Accounts coding is an adaptation of the OECD-SHA framework. However, strict adherence to International Classification for Health Accounts (ICHA) occasionally led to the possibility of omission of some locally relevant expenditure flows. These kinds of limitations are expected to be resolved in the next round of NHA in Nepal. The compilation of the NNHA was largely data driven, involving extensive efforts in data collection, inventorying, evaluation, and analysis. This activity of national health accounting made critical use of all available public data sources and made the best use of all available


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secondary data. The NNHA is based on several national representative surveys to generate comprehensive data on public sector corporations, local government bodies, NGOs, private for-profit providers, private firms and insurance companies, private medical schools, drug retailers, and not-for-profit agencies. In brief, the following methodologies were used in producing the second round of the NNHA:

Retrieval of Data from the Financial Management Information System (FMIS)

The data on government health expenditures was retrieved from the government’s Financial Management Information System (FMIS). The FMIS data was verified using MoHP data.

DDC/VDC and Municipality Survey

A total of 15 out of 75 districts were selected based on random sampling and probability proportional to size (PPS) representative of the various ecological and development regions. The table below shows the randomly selected districts and their corresponding ecological/ development regions.

Table 1.1: Selected districts for field survey

Ecological/ Development Region

Eastern Central Western Mid-Western

Far Western

Total Selected Districts

Mountain Districts - Rasuwa Kalikot - 2

Hill Districts Ilam, Udaypur

Kavre, Nuwakot

Palpa, Magdi Kaski Surkhet Doti 9

Terai Districts Jhapa Chitwan - Banke Kailali 4

Total Selected Districts 3 4 3 3 2 15

The required data was collected from all 15 DDCs, all 14 municipalities, and 30 VDCs (almost two from each) of the selected districts.

Donor Expenditure Survey

The study team collected information from the offices of each donor. Additionally, the study team used other sources of information such as the DoHS Annual Report, the Annual Report of Auditor General, and the FMIS to cover the maximum numbers of donors. The survey covered all bilateral, multilateral, and UN agencies (21 in all) who have a presence in Nepal.


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Expenditure of Autonomous Bodies/State-Owned Enterprises

A total of 15 out of 38 state-owned enterprises (SoEs) were selected for the survey. The following institutions were captured in this survey: Nepal Agriculture Development Bank, Citizen Investment Trust, Dairy Development Corporation, Gorkhapatra Corporation, Janak Education Materials Centre, National Insurance Company, Nepal Housing Development Finance company, Nepal Oil Corporation, Nepal Television, National Water Supply Corporation, Rastriya Banijya Bank, and Nepal Drugs Limited, among others. Tribhuvan University Teaching Hospital is an autonomous university.

I/NGOs Expenditure Survey

INGOs working in the health sector that are registered with the Social Welfare Council were used as a sample frame for sampling purposes. All the INGOs were grouped into two strata (US-based and non-US-based), and a total of 10 INGOs were proposed as a sample for survey; five US-based and five non-US-based INGOs were selected using random sampling for the study. To estimate the national parameters required for the study, a total of 70 samples NGOs were proposed for study, and a total of 65 NGOs were accessed for information. The survey covered 12 large, 14 medium, and 272 small NGOs.

Private Hospital and Nursing Home Survey

Altogether, 25 sample private hospitals and nursing homes from eight districts (Kathmandu, Lalitpur, Dolakha, Morong, Rupandehi, Chitwan, Banke and Kaski) were selected to generate the required information for the study. But only 22 private hospital and nursing homes provided information. Considering the variation in their size in terms of beds, volume of transactions, and number of patients served, for the purpose of the survey the private hospitals and nursing homes were organized into four strata, according to the number of beds.

Table 1.2: Distribution of Samples

Strata Number of Beds Sample

1 100 or more 4

2 50- 99 beds 8

3 20- 49 beds 5

4 Up to 19 beds 8

Total 25


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Furthermore, private hospitals and nursing homes were grouped according to whether they were based in Kathmandu or outside Kathmandu.

Medical and Nursing School Expenditure Survey

Ten medical schools out of 11, and 45 nursing schools and paramedical schools out of 157 were selected for the study. Extrapolation of health expenditure was based on the size of schools.

Retrieval of data from the drug expenditure survey conducted by DDA

Data on drug expenditures weas retrieved from the Report on Consumption of Antibiotics and other Medicines prepared for the DDA by Pharmaceutical Horizon of Nepal (PHON) in 2006 and 2007. These two reports provided actual data for the fiscal year 2004/05 (2061/62) and 2005/06 (2062/63). Extrapolation was used for estimating the data for 2006/07 (2063/64). The data was entered into Excel where primary analysis was conducted. The obtained data were summarized in terms of number, percentage, and rate, ratio, mean and median.

1.7 Limitations of the Study

No other surveys such as a private health insurance survey or private for-profit employers’ expenditure surveys were carried out as in the previous round. Instead, extrapolation was used to estimate their expenditures.


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Chapter II: Overview of Health Expenditure

2.1 Introduction

Macro-economic performance of the country remained poor, affecting the availability of resources during the period under review (2000/01-2005/06). Low GDP growth has also affected revenue mobilization. Revenue, as a percent of GDP, increased just marginally by 1 percent from 11 percent in 2001/02 to 12 percent in 2005/06, resulting in a skewed distribution of resources in the productive sector in general, particularly in the health sector. In the following section, an attempt has been made to review the health expenditure trend in terms of macroeconomic performance and its effect on the NNHA. The NNHA also displays nationwide estimates of the three basic aggregates of national health accounting, insluding National Health Expenditure (NHE), Total Health Expenditure (THE), and System of Health Account THE (SHA THE). NHE represents national health expenditures during the accounting period comprising expenditures on all health care functions. Total Health Expenditure (THE) includes NHE plus capital formation of all health care providers and expenditure for education and research during the accounting period. SHA THE is defined as THE minus expenditures on education and research during the accounting period.

2.2 Total Health Expenditure

Total expenditure on health (TEH) has in recent years shown a marked improvement over the previous study period (2001-2003). THE jumped to NRs. 32,960 million in 2004/05, up from NRs. 24,913 million in 2002/03, an increase of 32 percent. The growth trend in health expenditure seen during the first round continued during the second round as well. Total health expenditure during this period (2003/04 - 2005/06) rose by 30 percent from NRs. 33,931 million in 2003/04 to NRs. 40,775 million in 2005/06. The table below provides a summary of health expenditure trends by THE, NHE, and SHA THE during the years 2000/01 to 2005/06.


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Table 2.1: Total Health Expenditures (THE), 2003/04-2005/06

Indicator 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06

Total Health Expenditure (THE) (in millions of NRs.) 21,953 23,960 24,913 30,650 32,960 34,796

National Health Expenditure (NHE) (in millions of NRs.) 19,588 20,926 21,899 24,774 26,563 26,452

SHA THE (in millions of NRs.) 20,907 22,653 23,570 28,865 30,617 32,254

Total Health Expenditure (THE) (in millions of USD) 294.1 307.2 333.3 431 464 490

National Health Expenditure (NHE) (in millions of USD) 262.4 268.3 293.0 349 374 372

SHA THE (in millions of USD) 280.1 290.4 315.3 406 431 454

GDP (in millions of NRs.) 394,052 406,138 437,546 536,749 589,412 654,055THE as a percentage of GDP* 5.6 5.9 5.7 5.7 5.6 5.3

The Growth Rate of GDP 4.0 7.1 9.0 9.8 11.0

The Growth Rate of THE (%) 9.1 4.0 23.0 7.5 5.6

The Growth Rate of NHE (%) 6.8 4.6 13.1 7.2 -0.4The Growth Rate of SHA THE (%) 8.4 4.0 22.5 6.1 5.3

Share of Government to THE (%) 16.0 19.5 16.8 17.3 19.8 23.7

Share of out-of-pocket payments to THE (%) 59.7 60.8 62.5 61.5 60.5 55.6

Share of EDPs to THE (%) 24.3 19.6 20.7 21.1 19.7 20.8

Average Exchange Rate (NRS/ USD) 73.70 76.25 77.83 73.17 71.50 71.06

* This is worked out on the basis of new GDP series published by CBS with 2000/01 as the base year, hence it may not tally with the original figure published in Nepal National Health Accounts (2001-2003)

2.3 Total Health Expenditure Trend at Nominal and Real Price

Every attempt has been made to present the change THE in nominal and real terms, as well as in US dollars. The table below shows that in nominal and real terms. THE increased by 58.5 percent from NRs. 21,953 million in 2000/01 to NRs. 34,796 million in 2005/06, average annual growth of 11.7 percent . But in real term, THE increased by 36.8 percent from NRs. 21,953 million in 2000/01 to NRs. 30,029 million in 2005/06, with average annual growth of 7.35 percent. In US dollars, THE stood at USD 490 million at the nominal price and USD 423 million at the real price in 2005/06. In 2001/02 these figures were USD 294 million at the nominal price.


14

Table 2.2: Total Health Expenditure at Nominal and Real Prices

Year Nominal Price (millions of NRs.)

Real Price (millions of NRs.)

Nominal Price (millions of USD)

Real Price (millions of USD)

2000/01 21,953 21,953 294 294

2001/02 23,960 23,052 319 307

2002/03 24,913 23,255 356 333

2003/04 30,650 27,464 432 387

2004/05 32,960 29,465 463 414

2005/06 34,796 30,029 490 423

The figure below illustrates the trend of growth for THE at nominal and real prices.

Figure 2.1: Trends in Total Expenditure on Health, 2000/01-2005/06

2.4 Health Care Expenditures in Relation to Gross Domestic Product (GDP)

Changes in the annual rate of THE growth compared to the changes in GDP were inconsistent from 2000/01 to 2005/06, using current prices. The annual rate of growth for THE did not meet the GDP’s growth rate in 2002/03, 2004/05, or 2005/06, but was above the GDP growth rate in 2001/02 and 2003/04. With the exception of 2001/02, THE as a percentage of GDP remained relatively constant throughout the review period (2000/01 to 2004/05), showing a slight decline from 5.6 percent in 2004/05 to 5.3 percent in 2005/06. The contributions of public sector, private sector, and donors to THE as a percentage of GDP is presented below in Figure 2.2. It shows that the primary source of health care expenditure


15

comes from private households, but that the rate of household contributions is falling. Private household out-of-pocket payment, which reached 3.5 percent in 2003/04, fell to 3.0 percent in 2005/06. EDP contribution to THE compared to GDP also is falling. The government, on the other hand, has increased the proportion it contributes to THE, with its contribution as a percentage of GDP rising gradually to 1.3 percent in 2005/06 from less than 1 (0.8 percent) percent in 2000/01. This can be attributed to the implementation of the government’s free health care policy.

Figure 2.2: Health Expenditure as a Percentage of GDP

2.5 GDP Growth and Total Health Expenditure Trends

Figure 2.3 presents the change in the annual growth rate of GDP compared to THE. It shows that THE remaining below the GDP growth rate except in 2003/04. Rising from 9 percent in 2001/02, THE reached its peak at 23 percent in 2003/04, then dropped to 7.5 percent in 2004/05, and then fell further to 5.6 percent in 2005/06. The GDP growth trend, on the other hand, remained smooth throughout this period, growing from 3.1 percent in 2000/01 to 11 percent in 2005/06, at current prices. Increasing health expenditure is bound to influence the per capita expenditure as well. Table 2.3 shows an improved per-capita health expenditure during the review period, particularly in 2005/06 when per capita spending on health rose by 45 percent from NRs. 932 in 2000/01 to NRs. 1,355 in 2005/06, an average annual rate of 9 percent. Table 2.3 below presents per capita expenditure on health observed during the review period. In terms of US dollars, per-capita health expenditure grew from USD 12.50 in 2000/01 to USD 19 in 2005/06, an average growth rate of 11.84 percent. Fluctuation in exchange rates seems to have greatly affected the per-capita health expenditure.


16

Table 2.3: Per Capita Health Expenditure Trend, 2003/04-2005/06

Per capita health expenditure 2003/04 2004/05 2005/06

THE, in millions of NRs. 30,650.42 32,960.02 34,795.63

Population, in millions 24.82 25.08 25.67

Per capita health expenditure, in NRs. 1,234.91 1,313.99 1,355.71

Per capita health expenditure, in USD 16.69 18.38 19

Exchange rate 73.97 71.50 71.06

The per capita government expenditure stood at NRs. 318 (USD 4.5), private per-capita expenditure at NRs. 747 (USD 10.5), and the rest of the world NRs. 280 (USD 3.9) on health in 2005/06.

2.6 Effects of Exchange Rate fluctuation on Per-capita Income

Fluctuations in the exchange rate of Nepalese rupees vis-à-vis foreign currency, particularly US dollars, has greatly affected Nepal’s total health expenditure. The exchange rate of one US dollar ranged from NRs. 73.70 to 76.25 during the first round of study, which in later years depreciated to between NRs. 73.17 to 71.06 during the second round of study. The per-capita expenditure in US dollars presented in 2002/03 would be quite different if they were calculated at the exchange rate effective in 2005/06. The exchange rate of US dollars to Nepalese rupees in 2002/03 was USD 77.83, but fell to NRs. 71.06 in 2005/06. As a result, the per-capita health expenditure in terms of USD will not give an accurate picture.

2.7 Comparative picture of Health Expenditure in SAARC Countries

In SAARC countries, this level of expenditure as a proportion of GDP is higher than in Afghanistan, Bangladesh, Bhutan, India, Pakistan and Sri Lanka, but less than in the Maldives. The Maldives also had the highest per capita health expenditure in the region. Nepal lagged behind Afghanistan, Bhutan, China, and India, but was ahead of Bangladesh and Pakistan in terms of per capital health expenditure.


17

Table 2.4: Total health expenditure as percentage of GDP in SAARC countries

Country

Total health expenditure as % of GDP Per capita health expenditure in terms of USD

2001 2002 2003 2004 2005 2001 2002 2003 2004 2005

Afghanistan 3.3 3.6 4.4 4.4 5.2 3 11 13 16 20

Bangladesh 3.2 3.1 3.1 3.1 2.8 11 11 12 13 12

Bhutan 5.7 4.5 4.1 4.2 4 48 41 43 48 52

China 4.6 4.8 4.8 4.7 4.7 48 54 62 71 81

India 4.6 4.8 4.8 4.9 5 21 22 26 30 36

Maldives 6.8 6.6 7.2 7.8 12.4 153 151 174 208 316

Nepal 5.3 6.1 5.8 5.7 5.8 12 13 13 14 16

Pakistan 2.3 2.3 2.2 2.2 2.1 10 11 12 13 15

Sri Lanka 3.8 3.8 3.9 4.2 4.1 32 34 38 45 51

Source: WHO, 2008


18

Chapter III: Expenditures by Financing Source

3.1 Expenditure by Source

Total health expenditure is funded from several sources. Among these sources, the largest single source of health care financing is the private sector which accounts for 56 percent of the total health expenditure in 2005/06. General government financing is the second largest source of funds, contributing to 23.7 percent, while EDPs contributed 20.8 percent of the total in 2005/06. Table 3.1 gives the estimated national health account for Nepal from 2003/04 to 2005/06 by funding sources.

Table 3.1: Composition of Source of Funding 2003/04-2005/06 (In Million NRs.)

2003/04 2004/05 2005/06

NS Code

Health care Funding Source Amount Percent Amount Percent Amount Percent

NS 1 General government 5,312.41 17.33% 6,535.30 19.83% 8,239.20 23.68%

NS 2 Private sector 18,857.05 61.52% 19,935.84 60.48% 19,332.67 55.56%

NS 9 Rest of the World 6,480.97 21.14% 6,488.89 19.69% 7,223.76 20.76%

Total 30,650.43 100.00% 32,960.03 100.00% 34,795.63 100%

The figure below presents the annual change in the share of individual agencies in total health expenditure from 2000/01 to 2005/06. The private sector, at its peak in 2002/03 contributed 63 percent, which fell to 56 percent in 2005/06. Similarly, the contribution by EDPs fell to 21 percent in 20050/6 from 24 percent in 2003/04. The government’s contribution, on the other hand, grew, suggesting the government’s commitment to implementing the pro-poor policy as reflected by increased budget allocations to the health sector.


19

Figure 3.1: Total Health Expenditure Trend by Source, 2000/01-2005/06

The sources of health care funding include: the general government, household out-of-pocket expenditures, including other household out-of-pocket expenditures and not-for-profit institutions serving households other than social insurance, all corporations other than health insurance, official donor agencies including all foreign funds, and international not-for-profit agencies. The contribution of each agency to health financing is given below.

Table 3.2: Contribution to health care funding by agencies (in millions of NRs.)

Funding Source 2003/04 2004/05 2005/06

General government (excluding social security) 5,312.41 6,535.30 8,239.20

Private household (out-of-pocket expenditure) 17,071.08 17,740.39 17,325.09

Other private household out-of-pocket expenditure 49.11 54.03 59.43

Official donor agencies 2,672.48 2,099.41 2,759.25

NGOs 1,397.63 1,391.96 1,484.47

INGOs 3,802.06 4,382.51 4,454.55

All the other foreign funding sources 6.43 6.97 9.96

All corporations 339.23 749.46 463.69

Total 30,650.42 32,960.02 34,795.63


20

The pattern of funding by each source for 2003/04-2005/06 is presented in the following figure, which shows that the government share of total health expenditure is growing whereas private out-of-pocket expenditure is gradually falling.

Figure 3.2: Trend of Total Health Expenditure by source 2003/04-2005/06

Figure 3.3 presents the contribution of each individual agency to THE in 2005/06. Private out-of-pocket expenditure continued to be the single largest source, accounting for 50 percent THE, followed by government, with 24 percent, international not-for-profit agencies at 13 percent, and official donor agencies at 8 percent. Not–for-profit institutions serving households contributed 4 percent of THE, and all corporations other than health insurance contributed a negligible 1 percent.

Figure 3.3: Total Health Expenditure by Source for 2005/06


21

3.2 General Government

Most general government health expenditures are principally undertaken by the central government and funded mainly through general taxation. Table 3.3 shows the sources of revenue along with the percentage of expenditure based on that source. Tax revenue continues to be the single largest source of income, and accounted for over 90 of money spent during the review period (2003/04 to 2005/06). Furthermore, tax revenue is an increasingly important revenue source, and was the source for 93 percent of expenditures in 2005/06. The volume of general tax revenue increased by 61 percent, from NRs. 4,795 million in 2003/04 to 7,714 million in 2005/06. Local government in Nepal is represented by 75 District Development Committees (DDCs), 3,915 Village Development Committees (VDCs), and 58 municipalities. Local bodies are entitled to spend a part of their budget on providing health care services at the district and sub-district level. The data shows that the contribution made by local bodies is definitely rising. However, their share in general expenditure remained quite small. The percentage contributed by local bodies to general government expenditure remained at less than 1 percent throughout the review period.

Table 3.3: General Government Expenditure by Source (in millions of NRs.)

Source 2003/04 2004/05 2005/06

Amount Percent Amount Percent Amount Percent

General government excluding social security 236.03 4.44 288.18 4.41 397.01 4.82

Central government 259.84 4.89 214.90 3.29 94.69 1.15

General tax revenues 4795.30 90.27 6003.14 91.86 7714.29 93.63

Local governments/municipalities 21.23 0.00 29.08 0.44 33.21 0.40

Total 5312.41 100.00 6535.30 100.00 8239.20 100.00

3.3 Private Sector Financing

Private financing is the primary funding mechanism for Nepal’s health system. This consists enterprises, household out-of-pocket expenditure, non-profit institutions (NGOs/trusts), and all other corporations and autonomous bodies and social insurance. Out-of-pocket expenditure alone accounted for 90 percent of total private sector spending on health care during the review period (2003/04 to 2005/06), nearly the same level as in the previous study period (2000/01 to 2002/03).


22

Non-governmental organizations (NGOs) remained the second largest source of funding within the private sector, contributing around 7 percent of total private financing, on average, during the review period (2003/04-2005/06). Corporations in Nepal are divided into five broad categories: financial, industrial, social services, commercial, and public utilities. Almost all of these corporations have health-related expenditures. Most of them operate their own health care facilities, primarily offering ambulatory health care to employees and their families. Several provide medical benefits in the form of reimbursement to their staff for costs incurred by hospitalization or treatment. These expenditures constitute between 2 and 6 percent of total private sector spending during the review period. These expenditures were significantly larger in 2004/05 (4 percent) but fell significantly in 2004/05 to 2.3 percent. Corporate expenditure is mainly in the form of reimbursement for employees.

Table 3.4: Private spending by source (in millions of NRs.)

2003/04 2004/05 2005/06

Private Financing Source Amount Percent Amount Percent Amount Percent

Social insurance enterprises 0 0 0 0 0

Other private household out-of-pocket 49 0.3 54 0.3 59 0.3

Private Household out-of-pocket 17,071 90.5 17,740 89 17,325 89.6

Non-profit institutions 1,398 7.4 1,392 7 1,484 7.7

All corporation 339 1.8 749 3.8 464 2.4

Total 18,857 100 19,935 100 19,332 100

3.4 Out-of-Pocket Payment

Out–of-pocket expenditure forms an integral part of private financing. It accounts for 90 percent of all private financing, and accounted for 50 percent of THE in 2005/06. Out-of-pocket payments have dropped continuously from 62.5 percent in 2002/03 to 61.5 percent in 2003/04, 60.5 percent in 2004/05, and finally 50 percent in 2005/06. It is estimated that a total of NRs. 17,384 million for health care was paid for out-of-pocket in 2005/06, a figure derived by triangulating data from the NLSS II, the drugs consumption survey, the private hospitals nursing homes survey, and the medical and nursing school surveys. Household expenditure on health care was estimated at 5.7 percent of total household expenditure, yielding a total of NRs. 19,948 million in funds derived from out-of-pocket


23

expenditure, according to NLSS II data. There is, however, a discrepancy between the NLSS estimates and other surveys which estimated out-of-pocket expenditure at NRs. 17,384 million. The difference might be explained by the fund s reimbursed by the government, and medical benefits provided by the government.

3.5 Rest of the World

This includes the spending from official donor agencies and international non-governmental organizations (INGOs). Their assistance to Nepal is a significant source of financing in the health sector. Funding from this source is particularly important in areas such as family health, safe motherhood, family planning, immunization, tuberculosis and leprosy control, STDs, prevention and management of communicable diseases, and capital formation of health care provider institutions. Table 3.5 shows a breakdown of donor contributions.

Table 3.5: Donor Spending by Source (in millions of NRs.)

Source Code Donors by Source 2003/04 2004/05 2005/06

NS9.1 Official donor agencies 2,672 2,099 2,759

NS9.2 International not-for-profit agencies 3,802 4,383 4,455

NS9.3 All the other foreign funds 6 7 10

Total 6,481 6,489 7,224

Percentage Share

NS9.1 Official donor agencies 41.2 32.4 38.2

NS9.2 International not-for-profit agencies 58.7 67.5 61.7

NS9.3 All the other foreign funds 0.1 0.1 0.1

Total 100.0 100.0 100.0

The above table shows how donor spending on health care has fluctuated over time. Donor expenditure as a whole rose to NRs. 7,224 million in 2005/06, up 11 percent from NRs. 6,481 million in 2004/05. Among donor agencies, INGOs remained the top contributor, accounting for 62 percent of donor contributions to THE in 2005/06. Official donor agencies were the second-greatest contributor, accounting for 38 percent of the rest of the world’s contribution in 2005/06. However, official donor agencies’ contribution in 2005/06 was lower than in 2003/04. Official donor agencies, as a percent of total spending, fell to 32 percent in 2004/05, then grew to 38 percent in 2005/06. The increase in total donor spending can be largely attributed to increased spending by INGOs.


24

3.6 Health Care Expenditure by Funding Source and Function

Table 3.6 shows THE by function and source, and shows that NRs. 26,442 million (71 percent) is used by all health care providers under National Health Expenditure, and NRs. 8,342 (29 percent) million is used for health-related functions that include capital formation of health care provider institutions, education and training of health personnel, research and development in health, drinking water and sanitation, administration and provision of social services to those living with disease and impairment, and all other health-related functions. A total of NRs. 32,244 million excluding NRs. 2,426 million spent in education and training of health personnel and research and development in health has been used under the System of National Health Accounts. An important feature of health expenditure in Nepal is that out-of-pocket payment forms the single largest source. A total of NRs. 19,332 million derives from out-of-pocket payments constituting 56 percent of THE in 2005/06. Funds from out-of-pocket payments have been used largely on allopathic medicine (NRs. 8,301 million), capital formation of health care provider institutions (NRs. 4,133 million), education and training of health personnel (NRs. 1,954 million), allopathic hospital inpatient care (NRs. 1,370 million), allopathic hospital outpatient curative care (NRs. 184 million), and basic medicine diagnostic services (NRs. 6 million) in 2005/06. The general government, the second-largest source of financing, contributed NRs. 8,239 million, constituting 24 percent of THE in 2005/06. Of this amount, financing from the central government accounted for 95 percent of general government expenditure. Government spending has been used mostly for capital formation of health care provider institutions, followed by basic medical and diagnostic services, inpatient curative health care, and allopathic inpatient hospital care. Government money was also used for maternal and child health, tuberculosis and leprosy control, STDs, all other public health-related services, government administration of health, and health related social security. Other important functions financed by government sources include patient transport and emergency rescues. Expenditure by local government and corporations in health remained very small, and covered only limited areas such as outpatient care, prescription medicines, preventive health care, public health services, and so on. Expenditure by corporations was seen mostly in basic medical and diagnostic services, allopathic inpatient hospital care, and outpatient care. A total of NRs. 7,224 million (21 percent of the total health expenditure) from rest of the world was applied to several health-related functions under national health expenditure and health related functions in 2005/06. Within this expenditure category, INGOs contributed about 62 percent while official donor agencies contributed the remaining 38 percent. INGO spending was used particularly in family health and reproductive health services, prevention and management of communicable disease, education and training of health personnel, and on capital formation of health care providers. Official donor agencies spent resources on


25

immunization, STDs, and in the government administration of health and health related social security functions, but like INGOs, spent very little on capital formation of health care provider institutions. Funding for safe motherhood services, including newborn care and family planning, seems to get funding from official donor agencies only. Some health care programmes like tuberculosis and leprosy control and immunization programmes only make use of government and donor funding. For immunization, the ratio of donor agency funding to government funding remained at 55:45. In tuberculosis and leprosy control government sources financed 66 percent while donors contributed the remaining 44 percent. The use of funds for STDs from official donor agencies and INGOs combined reached as high as 63 percent, with the government contributing 37.


26

Table 3.6: Functions of Health Care by Source of Funding Expenditures, 2005/06 (in millions of NRs.)

General Government Private sector Rest of the

World

Gra

nd T

otal

NCF Code NNHA Function of Health Care G

ener

al G

over

nmen

t, ex

clud

ing

soci

al

secu

rity

Cen

tral

Gov

ernm

ent

Gen

eral

Tax

Rev

enue

Loca

l gov

ernm

ents

/ m

unic

ipal

ities

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of

-poc

ket e

xpen

ditu

re

NG

Os

serv

ing

HH

s (o

ther

than

soc

ial

insu

ranc

e)

All

corp

orat

ions

(oth

er

than

hea

lth in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

National Health Expenditure

NF1.1 Inpatient curative care - -

367

- - -

-

-

5

-

372

NF1.1.1 Allopathic hospital inpatient care - -

906

-

22

1,370

-

29 -

-

2,326

NF1.1.2 Allopathic hospital outpatient care - -

-

-

15

616

-

41 -

-

672

NF1.1.3 Non-allopathic hospital inpatient care - -

18

0 - -

-

- -

-

19

NF1.1.4 Non-allopathic hospital outpatient care - -

5

- - -

-

- -

-

5


27

NF1.3 Outpatient curative care -

3

1

5 -

184

-

- -

-

193

NF1.3.1 Basic medical and diagnostic services -

90

1,818

0 -

6

7

340 -

-

2,261

NF1.3.3

All other discipline-specific specialized medical care services - -

79

- - -

-

- -

-

79

NF1.3.4 Non-allopathic medicine and other health care services - -

142

- - -

-

- -

-

142

NF4.1 Clinical laboratory services - -

30

- - -

-

- -

-

30

NF4.2 Diagnostic imaging - -

-

- - -

24

- -

146

170

NF4.3 Patient transport and emergency rescue - -

247

3 - -

25

- -

104

379

NF4.9 All other ancillary services - -

-

0 - -

12

- -

-

12

NF5.1 Pharmaceuticals and other medical non-durables - -

8

- - -

-

- -

-

8

NF5.1.1 Prescription medicines -

10

5

1 - -

-

- -

-

16


28

NF5.1.2.1 Allopathic medicines - -

42

- -

8,301

-

-

57

-

8,401

NF5.1.2.2 Non-allopathic medicines - -

-

- -

761

-

- -

-

761

NF6.1

Family health (MCH and FP) and reproductive health services -

32

149

3 - -

552

-

48

898

1,683

NF6.1.1

Safe motherhood services including newborn care and family planning - -

-

- - -

-

-

254

-

254

NF6.1.2 Infant and child health - -

16

- - -

-

-

65

-

80

NF6.1.5 Other reproductive health - -

-

- - -

-

- -

-

-

NF6.2 School health services - -

-

0 - -

-

- -

-

0

NF6.3 Prevention and management of communicable diseases - -

1

0 - -

13

- -

475

489

NF6.3.1 Immunization (except EPI) -

7

525

5 - -

-

-

419

-

955

NF6.3.2 Water and food borne disease control - -

67

- - -

-

- -

-

67


29

NF6.3.3 Tuberculosis and leprosy control - -

152

- - -

-

-

79

-

231

NF6.3.4 STDs - -

130

2 - -

117

-

236

184

670

NF6.3.5 Vector-borne diseases - -

50

- - -

-

-

85

-

135

NF6.3.6 Other communicable diseases - -

-

- - -

-

-

1

-

1

NF6.4

Prevention and management of non-communicable diseases -

1

50

- - -

155

- -

264

470

NF6.5 Occupational health care -

0

4

- - -

-

54 -

-

59

NF6.9 All other public health services -

28

867

5 - -

15

- -

75

989

NF7.1

Government administration of health and health-related social security -

10

428

0 - -

-

-

1,500

-

1,938

NF7.2 Private health administration and health insurance -

5

-

0

22 -

468

- -

2,079

2,574

Total National Health Expenditure - 186

6,108

26 59 11,238

1,387

464 2,749

4,224

26,442


30

Health-Related Expenditure

NF R.1 Capital formation of health care provider institutions 122

66

1,190

7 -

4,133

35

-

9

29

5,592

NF R.2 Education and training of health personnel 115

2

147

0 -

1,954

7

-

1

201

2,426

NF R.3 Research and development in health - -

62

- - -

53

- -

-

115

NF R.4 Drinking water and sanitation - -

14

- - -

-

- -

-

14

NF R.5

Administration and provision of social services to those living with disease and impairment - -

193

- - -

-

- -

-

193

NF R.9 All other health-related expenditures - -

-

- - -

2

- -

-

2

Total Health Expenditure (THE) 238

254

7,714

33

59

17,325

1,484

464

2,759

4,455

34,786

SHA THE 122 252

7,505

33 59 15,371

1,424

464 2,759

4,254

32,244

Source: NNHA, 2008

Nepal National Health Accounts 2003/04

31

Chapter IV: Health Expenditure by Function

4.1 Expenditure by Function

Total health expenditure by health care function is shown in Table 4.1, where health care functions have been divided into eight groups. As no expenditure information on rehabilitative care services and long-term nursing care was available, they are referred to herein as not available (NA). Medical goods dispensed to outpatients forms the largest single component, using 26 percent of THE in 2005/06. This component includes pharmaceuticals and other medical non-durables, prescription medicines, allopathic medicines, and non-allopathic medicines. Allopathic medicines claimed the largest portion of resources in this component while very little was spent on non-allopathic medicines. The second-largest expenditure was in health-related functions, accounting for 24 percent of THE in 2005/06. This component includes capital formation of health care provider institutions, education and training of health care personnel, research and development in health, drinking water and sanitation, administration and provision of social services to those living with disease and impairment, and all other health-related expenditures. The greatest proportion of funds within this component went to capital formation of health care provider institutions, followed by education and training of health personnel.

Figure 4.1: Total Health Expenditure by Function, 2005/06


32

Preventive health care and public health services remained other important NNHA functions, constituting around 18 percent of THE in 2005/06. This component includes family health and reproductive health services, safe motherhood services including newborn care and family planning, infant and child health, family planning services, other reproductive health, school health services, prevention and management of communicable disease, immunization, water and food borne disease control, tuberculosis and leprosy control, STDs, and vector-borne diseases. The largest proportion of funds was committed to family planning and reproductive health services, followed by immunization and STDs. Health programme administration and health insurance constituted around 13 percent of THE in 2005/06. This component, among others, is comprised of government administration of health and health-related social security, and private health administration and health insurance. Private health administration and health insurance used the majority of funds, followed by government administration of health and health related social security.

Table 4.1: Health Care Expenditure by Functions (in millions of NRs.)

NCF code NNHA Functions 2003/04 2004/05 2005/06

NF1 Curative care services 5096.61 5940.12 6069.70

NF2 Rehabilitative care services 0.00 0.00 0.00

NF3 Long-term nursing care 0.00 0.00 0.00

NF4 Ancillary health care services 430.57 633.69 591.27

NF5 Medical goods dispensed to outpatients 10667.25 10917.07 9188.56

NF6 Preventive health care and public health services 5085.74 5148.92 6090.29

NF7 Health programme administration and health insurance 3493.53 3923.55 4512.32

NF R Health-related functions 5876.73 6396.68 8343.50

THE 30650.42 32960.02 34795.63

4.2 Health Expenditure by Functions and Providers Total Health Expenditure (THE) and National Health expenditure (NHE) by health care functions cross-classified by provider are presented in Annex III. The NNHA classification of health care is also matched with providers in this table. As seen in Annex III, allopathic medicines provided from retail sale outlets and other providers under medical goods


33

dispensed to outpatients was the highest of all expenditures by functional categories in the NNHA. The figure reached NRs. 8,401 million in 2005/06. The second largest source of expenditure was for capital formation for health care provider institutions, at NRs. 5,592 million. Hospitals also spent a large amount on capital formation of hospitals, as well as on research and training within hospitals. Hospitals in Nepal also provide prevention and management of non-communicable disease, with expenditure amounting to NRs. 470 million in 2005/06. All expenditures for safe motherhood services and immunization were provided under the provision and administration of public health programmes, alone. Large expenditures for family health (MCH and FP) and reproductive health services were provided by ambulatory care providers and from various public health programme units. Other major expenditures under functions by providers were basic medical and diagnostic services with NRs. 2,261 million spent by providers of ambulatory health care, and about NRs. 2,574 million on private health administration and health insurance provided by general health administration and insurance. Functions by providers of health expenditure in detail are presented in Table 4.2


34

Table 4.2: Functions by Providers of Health care Expenditures, 2005/06 (in millions of NRs.)

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

110000 NF1.1 Inpatient curative care 372 - - - - - - -

372

111000 NF1.1.1 Allopathic hospital inpatient care 1,710 - - - - - - 616

2,326

112000 NF1.1.2 Allopathic hospital outpatient care 631 - 41 - - - - -

672

113000 NF1.1.3 Non-allopathic hospital inpatient care 13 - 5 - 0 - - -

19

114000 NF1.1.4 Non-allopathic hospital outpatient care 5 - 0 - - - - -

5

130000 NF1.3 Outpatient curative care - - 193 - 0 - - -

193

131000 NF1.3.1 Basic medical and diagnostic services 90 - 1,825 - - 340 6 -

2,261


35

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

133000 NF1.3.3

All other discipline-specific specialized medical care services 79 - - - - - - -

79

134000 NF1.3.4 Non-allopathic medicine and other health care services 3 - 139 - - - - -

142

410000 NF4.1 Clinical laboratory services - - 30 - - - - -

30

420000 NF4.2 Diagnostic imaging - - 170 - - - - -

170

430000 NF4.3 Patient transport and emergency rescue - - 132 - 247 - - -

379

490000 NF4.9 All other ancillary services - - 12 - 0 - - -

12

510000 NF5.1 Pharmaceuticals and other medical non-durables - - - - - 8 - -

8


36

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

511000 NF5.1.1 Prescription medicines - - - 20 - - - -

20

512100 NF5.1.2.1 Allopathic medicines - - - 8,397 - 4 - -

8,401

512200 NF5.1.2.2 Non-allopathic medicines - - - 761 - - - -

761

610000 NF6.1 Family health (MCH and FP) and reproductive health services - - 1,248 - 435 - - -

1,683

611000 NF6.1.1

Safe motherhood services including newborn care and family planning - - - - 254 - - -

254

612000 NF6.1.2 Infant and child health - - 0 - 80 - - -

80

615000 NF6.1.5 Other reproductive health - - - - - - - -

-


37

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

620000 NF6.2 School health services - - - - 0 - - -

0

630000 NF6.3 Prevention and management of communicable diseases - - - - 489 - - -

489

631000 NF6.3.1 Immunization (except EPI) - - - - 958 - - -

958

632000 NF6.3.2 Water and food borne disease control - - - - 67 - - -

67

633000 NF6.3.3 Tuberculosis and leprosy control - - - - 102 129 - -

231

634000 NF6.3.4 STDs - - 301 - 252 120 - -

672

635000 NF6.3.5 Vector borne diseases - - - - 135 - - -

135

636000 NF6.3.6 Other communicable diseases - - - - 1 - - - 1


38

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

640000 NF6.4 Prevention and management of non-communicable diseases 230 - 167 - 70 - 2 -

470

650000 NF6.5 Occupational health care - - 25 - 0 29 4 -

59

690000 NF6.9 All other public health services - - 0 - 990 - - -

991

710000 NF7.1

Government administration of health and health-related social security - - 35 6 1,646 251 - -

1,938

720000 NF7.2 Private health administration and health insurance 5 - - - 0 2,569 - -

2,574

810000 NF R.1 Capital formation of health care provider institutions 3,170 - 1,374 7 35 1,007 - -

5,592

820000 NF R.2 Education and training of health personnel 938 - 1,155 - 332 - 2 -

2,426


39

Func

tion

code

NC

F co

de

NN

HA

Fun

ctio

ns o

f H

ealth

car

e

All

hosp

itals

Nur

sing

and

re

side

ntia

l car

e fa

cilit

ies

Prov

ider

s of

am

bula

tory

hea

lth c

are

Ret

ail s

ale

outle

ts a

nd

othe

r pro

vide

rs o

f m

edic

al g

oods

Prov

isio

n an

d ad

min

istr

atio

n of

pu

blic

hea

lth

pro g

ram

mes

Gen

eral

hea

lth

adm

inis

trat

ion

and

insu

ranc

e

Oth

er in

dust

ries

(res

t of

the

Nep

ales

e ec

onom

y)

Res

t of t

he w

orld

Gra

nd T

otal

830000 NF R.3 Research and development in health - - - - 115 - - -

115

840000 NF R.4 Drinking water and sanitation - - - - 14 - - -

14

850000 NF R.5

Administration and provision of social services to those living with disease and impairment - - - - 38 155 - -

193

890000 NF R.9 All other health-related expenditures - - - - - 2 - -

2

Total Health Expenditure (THE) 7,246 - 6,852 9,190 6,263 4,613 15 616

34,796

SHA THE 6,309 - 5,697 9,190 5,816 4,613 13 616

32,254


40

Chapter V: Health Expenditure by Provider

Health care providers in Nepal can be subdivided into three broad categories: Public, Private, and NGOs. Table 5.1 identifies the key health providers under the government, private and NGO sectors. The summary expenditures as classified in framework are given in Table 5.2.

Table 5.1: Key Health care Providers in Nepal

Public Sector Organizations Private For-Profit Organizations

NGOs

Central hospitals (general and specialized hospitals)

Private hospitals and nursing homes

NGO hospitals

University-teaching hospitals and medical colleges

Mission hospitals

Regional hospitals Private clinics NGO clinics

District hospitals Private diagnostic laboratories

Primary health care centers Private drug retail outlets

Health posts Private unqualified providers

Sub health posts Traditional healers

PHC outreach clinics Private practitioners

Urban health clinics (UHCs) Private retail sale of other medical goods

Other government facilities

Total Health Expenditure (THE) by providers is presented according to ICHA categories in Table 5.2. THE by providers continued to rise during the review period (2003/04 to 2005/06). Among providers, the majority of THE was through retail sale outlets and other providers of medical goods, although expenditures made under this component fell from NRs. 10,922 million in 2004/05 to NRs. 9,190 million in 2005/06. Funds from retail sale outlets and other providers of medical goods, as a percentage of THE, fell from 34 percent in 2003/04 to 26 percent in 2005/06. A trend of growing expenditure was seen at hospitals and providers of ambulatory health care services throughout the review period, where expenditures incurred by hospitals increased by 18.9 percent from NRs. 5,788 million in 2003/04 to NRs. 7,246 million in 2005/06, and


41

expenditures by ambulatory health care providers increased by 18 percent from NRs. 5,506 million in 2003/04 to NRs. 6,852 million in 2005/06. Expenditures on the provision and administration of public health programmes remained significant during the review period, growing by 28 percent from NRs. 4,885 million in 2003/04 to NRs. 6,263 million in 2005/06. Provision and administration of health programmes as a percentage of THE increased from 16 percent in 2003/04 to 18 percent in 2005/06. Expenditure funded by external resources (rest of the world) declined during the review period, falling by 2 percent from NRs. 629 million in 2003/04 to NRs. 616 million in 2005/06. External resources as a percent of the THE stood at 2 percent in 2005/06.

Table 5.2: Total Health Expenditure by Provider 2003/04-2005/06 (in millions of NRs.)

NCP code NNHA Provider of Health Care 2003/04 2004/05 2005/06

NP1 All hospitals 5,788.37 6,277.29 7,246.43

NP2 Nursing and residential care facilities 0 0 0

NP3 Providers of ambulatory health care (primary care providers) 5,505.31 6,141.59 6,852.05

NP4 Retail sale outlets and other providers of medical goods 10,655.50 10,922.12 9,190.04

NP5 Provision and administration of public health programmes 4,884.58. 4,972.62 6,262.91

NP6 General health administration and insurance 3,174.79 4,013.03 4,613.31

NP7 Other industries (rest of the Nepalese economy) 11.57 10.56 154.58

NP9 Rest of the world 629.30 622.80 616.30

Total 30,650 32,960 34,796

Percentage of THE

NP1 All hospitals 18.9 19.0 20.8

NP2 Nursing and residential care facilities 0.0 0.0 0.0

NP3 Providers of ambulatory health care (primary care providers) 18.0 18.6 19.7

NP4 Retail sale outlets and other providers of medical goods 34.8 33.1 26.4

NP5 Provision and administration of public health programmes 15.9 15.1 18.0


42

NCP code NNHA Provider of Health Care 2003/04 2004/05 2005/06

NP6 General health administration and insurance 10.4 12.2 13.3

NP7 Other industries (rest of the Nepalese economy) 0.0 0.0 0.0

NP9 Rest of the world 2.1 1.9 1.8

Total 100.0 100.0 100.0

Provider expenditure in all categories of THE for 2005/06 is presented in Figure 5.1. It shows that as a percentage of THE, retail sales outlets and others remained on the top, accounting for 26 percent of THE in 2005/06, followed by hospitals and providers of ambulatory health care services.

Figure 5.1: Total Health Expenditure by Providers, 2005/06

Public Sector Providers

According to the NNHA framework, Nepal has the following major public sector providers of health care:

• Government of Nepal (central government)

• Local Bodies (local government) • District Development Committees (DDCs)

• Municipalities • Village Development Committees (VDCs)


43

• External Development Partners (EDPs)

• State-Owned Enterprises (SOEs)

• Public autonomous bodies and universities

The trend in public spending for the review period (2003/04 – 2005/06) remained encouraging. From NRs. 7,534 million in 2003/04, public spending jumped to NRs. 10,553 million, an increase of 40 percent, in 2005/06. The central government remained the main contributor to total public spending. The central government’s share of contributions also rose, from 63 percent in 2003/04 to 73 percent in 2004/05 and 2005/06. External development partners (EDPs) appear to be the second-largest providers of health care expenditure during the review period. EDPs’ share in total public spending was somewhat erratic during the period under review, beginning at NRs. 2,672 million in 2003/04, then declining by 20 percent to NRs. 2,099 million in 2004/05, and again rising by 31 percent to NRs. 2,759 million in 2005/06. The percentage of EDP funding to total public spending moved from 36 percent in 2003/04 to around 26 percent in 2004/05 and 2005/06. Likewise, EDP contributions as a percentage of THE also declined, moving from 9 percent in 2003/04 to 6 percent in 2004/05 and then back up to 8 percent in 2005/06. State-owned enterprises’ contribution to THE remained insignificant during these years, as did contributions by local government.


44

Table 5.3: Health Expenditures by Public Sector Providers, 2003/04-2005/06 (in millions of NRs.) Source of financing 2003/04 2004/05 2005/06

Amount % Amount % Amount %

Government of Nepal (Central government) 4,760 63.18 5,970 72.97 7,694 72.91

Local bodies (local government) of which: 51 0.68 56 0.68 50 0.47

District Development Committees (DDCs) 51 0.68 56 0.68 50 0.47

Municipalities 0 0.00 0 0.00 0 0.00

Village Development Committees (VDCs) 0 0.00 0 0.00 0 0.00

External Development Partners (EDPs) 2,672 35.47 2,099 25.66 2,759 26.14

State-Owned Enterprises 0 0.00 0 0.00 0 0.00

Autonomous Bodies and Universities 0 0.00 0 0.00 0

Grand Total Public Spending 7,534 100 8,181 100 10,553 100

Total Health Expenditure 30,650 32,960 34,796

Central Government Expenditure as the Percent of Total Public Funding (TPF) 64 73 73

Central Government Expenditure as the Percent of THE 16 18 22

Official donors’ expenditure as the Percent of TPF 36 26 26

Share of Official donors’ expenditure as the Percent of THE 9 6 8

Share of Total Public Funding as the Percent of THE 24 25 30

5.1 Private Sector Providers

The private sector providers of health care in Nepal, studied in the course of compiling the NNHA, are as following:

• Private hospitals and nursing homes/private medical schools

• Private clinics • Private health insurance agencies

• Private pharmacies (drugs retailers) • Private employers (firms) expenditures

• Health expenditures by Health Education, Research and Training Institutions (HERTI) - Private medical schools

Table 5.4 shows that THE of private providers (THE PP) in Nepal rose during the review period (2003/04 to 2005/06). THE PP increased marginally from NRs. 16,750 million in


45

2003/04 to NRs. 17,465 million in 2004/05, then declined to NRs. 17,124 million in 2005/06. The largest percentage of THE was provided by private pharmacies (drug retailers), constituting 61 percent of THE PP in 2004/05, down to 53 percent in 2005/06. Private hospitals and nursing homes remained the second-largest contributors. The contributions of private clinics, private health insurance, and private employers (firms) to THE PP were less significant.

Table 5.4: Health Expenditures of Private Sector Providers, 2003/04-2005/06 (in millions of NRs.) Provider of Health Care 2003/04 2004/05 2005/06

Amount % Amount % Amount %

Private Hospitals and Nursing Homes 1,166 6.96 1,467 8.40 1,712 10.00

Private Clinics 210 1.25 231 1.32 255 1.49

Private Health Insurance 49 0.29 54 0.31 59 0.34

Private Pharmacies (drugs retailers) 10,561 63.05 10,731 61.44 9,062 52.92

Private Employers (firms) 52 0.31 63 0.36 76 0.22

Health Education, Research and Training Institutions (HERTI) - Private Medical Schools 4,712 28.13 4,919 28.16 5,960 34.80

Total Health Expenditure of Private Providers (THE PP) 16,750 100 17,465 100.00 17,124 100

Total Health Expenditure (THE) 30,650 32,960 34,796

Share of Private Hospitals and Nursing Homes as a percentage of THE PP 7.0 8.4 10.0

Share of Private Clinics as a percentage of THE PP 1.3 1.3 1.5

Share of Private Pharmacies (drug retailers) as a percentage of THE PP 63.0 61.4 52.9

Share of Private Medical Schools (HERTI) as a percentage of THE PP 28.1 28.2 34.8

Expenditure of Private Hospitals and Nursing Homes as a percentage of THE 3.8 4.5 4.9

Expenditure of Private Clinics as a percentage of THE 0.7 0.7 0.7

Expenditure of Private Drug Pharmacies (drug retailers) as a percentage of THE 34.5 32.6 26.0

Expenditure of Private Medical Schools (HERTI) as a percentage of THE 15.4 14.9 17.1


46

5.2 Non-Governmental Organization (NGO) Providers

Non-governmental organizations, also known as not-for-profit institutions have played a prominent role in the delivery of health services in Nepal for years. The contribution of NGOs' expenditure to THE was only 2 percent in 1994/95 (Hotchkiss et al 1998), but constituted a significant 16-18 percent between 2003/04 and 2005/06. Table 5.5 reveals that NGO spending increased by 24 percent from NRs. 6,522 million in 2003/04 to NRs. 6,366 million in 2005/06. International NGOs continued to contribute the largest overall expenditures on health during the review period. Among NGOs, spending by small NGOs made the greatest contribution, followed by larger NGOs.

Table 5.5 Expenditure of Non-Governmental Organizations 2004-2006 (in millions of NRs.)

Type of NGO 2004 2005 2006

INGOs 3,726 4,324 4,412

Large NGOs 301 295 388

Medium NGOs 38 38 38

Small NGOs 1,059 1,214 1,527

Sub-total 1,398 1,547 1,953

TOTAL 5,124 5,871 6,365

THE 30,650 32,960 34,796

NGO Expenditure as a % of THE 16.72 17.81 18.29

5.3 Health Expenditure by Providers and Sources of Funding

In Nepal, the government, the private sector, and INGOs are the three main sources for health care. The largest source of health care expenditure in Nepal is in the form of out-of-pocket payments from private households. As is evident from Table 5.6, the largest proportion of household expenditures in the context of health care go to purchasing of drugs and medicines, including both modern and traditional medicines. Allopathic pharmacies and dispensaries used household out-of-pocket payments amounting to NRs. 8,301 million in 2005/06; secondary hospitals used NRs. 3,584 million, tertiary hospitals NRs. 1,712 million, and other providers of ambulatory health care used NRs. 2,090 million. Non-allopathic pharmacies and dispensaries used very little funding from out-of-pocket payments, amounting only to NRs. 761 million.


47

Government financing is the second-largest source of health care funding in Nepal, deriving almost exclusively from general tax revenues (NRs. 11,536 million). The largest proportion of tax revenue was spent on public health programmes (NRs. 2,290 million), followed by general outpatient care (NRs. 1,823 million), government administration of health (NRs. 1,022 million). Expenditures incurred by local government and corporations were very small, and were incurred through selected providers of health care. Out of a total of NRs. 33 million spent by local government in 2005/06, NRs. 16 million were used for the provision and administration of public health programmes. Similarly, a total of NRs. 464 million from corporations was used by several health care providers. Of this total, all other providers of private sector health used only NRs. 340 million. External development partners including official donor agencies and international not-for-profit agencies remained the third largest source of health care. The combined expenditure of these agencies amounted to NRs. 7,224 million (NRs. 2,759 million from official donor agencies, NRs. 4,465 million from international not-for profit agencies) in 2005/06. A large proportion of funds from official donor agencies (NRs. 2,650 million) and international not-for-profit agencies (NRs. 1,095 million) was used for the provision and administration of public health programmes in 2005/06. Resources from international not-for-profit agencies have also been used by all other providers of health administration (NRs. 2,079 million). Family planning centres also used funding from international not-for-profit agencies and NGOs serving households, amounting to NRs. 551 million and NRs. 552 million, respectively. For further details, please see in Table 5.6.


48

Table 5.6 Providers by Source of Funding Health care Expenditures, 2005/06 (in millions of NRs.)


World

Gra

nd T

otal

NC

P C

ode

NNHA Providers of Health care Gen

eral

gov

ernm

ent e

xclu

ding

so

cial

sec

urity

Cen

tral

gov

ernm

ent

Gen

eral

tax

reve

nues

Loca

l gov

ernm

ents

/mun

icip

aliti

es

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of-p

ocke

t ex

pend

iture

NG

Os

serv

ing

HH

s (o

ther

than

so

cial

insu

ranc

e)

All

corp

orat

ions

(oth

er th

an

heal

th in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

NP1.1 Hospitals - - 196 - 37 - - 29 15 - 276

NP1.1.1 Tertiary hospitals - 95 499 - - 1,712 - - - - 2,306

NP1.1.2 Secondary hospitals - - 328 - - 3,584 - - - - 3,912

NP1.1.3 Primary hospitals - - 171 0 - - - - - - 171

NP1.3 Speciality hospitals - - 335 - - - 85 - - 145 565

NP1.9 All other hospitals - - 16 - - - - - - - 16

NP3.3 Other registered allopathic health care providers - - - - - 255 - 66 - - 320

NP3.4 Registered non-allopathic health care providers - - 40 - - - - - - -

40


49


World

Gra

nd T

otal

NC

P C

ode


eral

gov

ernm

ent e

xclu

ding

so

cial

sec

urity

Cen

tral

gov

ernm

ent

Gen

eral

tax

reve

nues

Loca

l gov

ernm

ents

/mun

icip

aliti

es

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of-p

ocke

t ex

pend

iture

NG

Os

serv

ing

HH

s (o

ther

than

so

cial

insu

ranc

e)

All

corp

orat

ions

(oth

er th

an

heal

th in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

NP3.6 Outpatient care providers -

1

0

4 -

- - - - -

5

NP3.6.1 General outpatient care providers -

68

1,823

10 -

-

124 - -

189

2,214

NP3.6.2 Family planning centres - -

144 - -

-

552 -

2

551

1,248

NP3.6.3 Outpatient mental health and substance abuse centres - - - - -

-

62 - -

105

167

NP3.7 Medical and diagnostics laboratories - -

30 - -

-

24 - -

146

200

NP3.9 Other providers of ambulatory health care 238 - - - -

2,090 - - - 48 2,375


50


World

Gra

nd T

otal

NC

P C

ode


eral

gov

ernm

ent e

xclu

ding

so

cial

sec

urity

Cen

tral

gov

ernm

ent

Gen

eral

tax

reve

nues

Loca

l gov

ernm

ents

/mun

icip

aliti

es

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of-p

ocke

t ex

pend

iture

NG

Os

serv

ing

HH

s (o

ther

than

so

cial

insu

ranc

e)

All

corp

orat

ions

(oth

er th

an

heal

th in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

NP3.9.1 Ambulance services - - -

1 -

-

25 - -

103

129

NP3.9.2 Blood and organ banks - - - - -

-

12 - - -

12

NP3.9.3 Providers of all other ambulatory health care services - -

139

1 -

- - - -

0

141

NP4.1.1 Allopathic pharmacies/dispensaries -

10

49

1 -

8,301 - -

57

4

8,423

NP4.1.2 Non-allopathic pharmacies/dispensaries - -

6 - -

761 - - - -

767

NP5 Provision and administration of public health programmes -

80

2,290

16 -

-

131 -

2,650

1,095

6,263


51


World

Gra

nd T

otal

NC

P C

ode


eral

gov

ernm

ent e

xclu

ding

so

cial

sec

urity

Cen

tral

gov

ernm

ent

Gen

eral

tax

reve

nues

Loca

l gov

ernm

ents

/mun

icip

aliti

es

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of-p

ocke

t ex

pend

iture

NG

Os

serv

ing

HH

s (o

ther

than

so

cial

insu

ranc

e)

All

corp

orat

ions

(oth

er th

an

heal

th in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

NP6.1 Government administration of health - -

1,022 - -

- - -

35 -

1,057

NP6.2 Social security funds - -

155 - -

- - - - -

155

NP6.3 Other social insurance - - - - -

- -

29 - -

29

NP6.4 Other (private) insurance - - - - 22

- - - - -

22

NP6.5 All other providers of health administration - -

461 - -

-

469

340 -

2,079

3,350

NP7.1 Providers of occupational health care services - -

4 - -

- -

0 - -

4


52


World

Gra

nd T

otal

NC

P C

ode


eral

gov

ernm

ent e

xclu

ding

so

cial

sec

urity

Cen

tral

gov

ernm

ent

Gen

eral

tax

reve

nues

Loca

l gov

ernm

ents

/mun

icip

aliti

es

Oth

er p

rivat

e ho

useh

old

OO

P ex

pend

iture

Priv

ate

hous

ehol

d ou

t-of-p

ocke

t ex

pend

iture

NG

Os

serv

ing

HH

s (o

ther

than

so

cial

insu

ranc

e)

All

corp

orat

ions

(oth

er th

an

heal

th in

sura

nce)

Offi

cial

don

or a

genc

ies

Inte

rnat

iona

l not

-for-

prof

it ag

enci

es

NP7.2 Private households (classified as providers of home care) - - - - -

6 - - - -

6

NP7.3 All other industries (classified as secondary providers of health care) - -

4 - -

- - - - -

4

NP9 Rest of the world - - - - -

616 - - - -

616

THE

238

254

7,714

33 59

17,325

1,484

464

2,759

4,465

34,796

Nepal National Health Accounts 2003/04

53

Chapter VI: Spending on Human Resource Development for Health

Human resource development (HRD) for health is a major function of the health system. Many countries have treated production costs of human resources as an educational rather than a health expenditure. In Nepal, private medical colleges offer health care services to the general public, therefore it is treated as health expenditure. With the introduction of the government’s liberalization policy in the 90s, the role of producing human resources for health was divided into the public and private sectors. Total spending on HRD increased markedly during the review period from NRs. 4,800 million in 2003/04 to NRs. 6,100 million in 2005/06. Spending on HRD as a percentage of THE grew from 16 percent in 2003/04 to 18 percent in 2005/06, indicating an increase in human resource development activities. Medical, nursing, and paramedical schools have witnessed a rapid rate of growth, while there were no private medical colleges in Nepal prior to the liberalization policy. The growth rate of spending on HRD increased from 6 percent in 2004/05 to 20 percent in 2005/06. The role of the private sector in human resource development was instrumental and carried out most pre-service education and trainings as well as some in-service trainings. The share of the private sector to the total HRD expenditure was as high as 97 percent in 2005/06. Government spending on HRD made up the remaining 3 percent, as the public sector engaged mostly in in-service trainings and education.

Table 6.1: Indicators for HRD in Health Indicator 2003/04 2004/05 2005/06

Total Health Expenditure (THE) (in millions of NRs.) 30,650 32,960 34,796

Total spending on HRD 4836 5131 6144

Expenditure on HRD as a percentage of THE 16 16 18

Growth rate of HRD NA 6 20

General government spending on HRD 124.15 211.12 184.63

General government spending on HRD as a percentage of total HRD spending 2.57 4.11 3.00

Total private spending on HRD 4,712 4,919 5,960

Private spending on HRD as a percentage of total HRD spending 97.43 95.89 97.00

Household (out-of-pocket) expenditure is the biggest source of funding for the production of health care providers. It increased from NRs. 4,500 million in 2003/04 to NRs. 5,700 million in 2005/06. Private household spending accounts for over 91 percent of total spending on HRD. The general government accounts for 5-7 percent of total spending on HRD, while official donor agencies contributed another 5-7 percent during the review period.


54

Table 6.2 Spending on HRD by sources

2003/04 2004/05 2005/06

Code Source Amount Percent Amount Percent Amount Percent

NS1.1 General government, excluding social security 265 5.48 374 7.29 422 6.87

NS2.3 Private household out-of-pocket expenditure 4500 93.05 4684 91.31 5675 92.35

NS9.1 Official donor agencies 71 1.47 72 1.40 48 0.78

Total 4836 100 5130 100.00 6145 100.00

Huge capital investments are required in initial years to establish medical and nursing schools. Capital investment increased from NRs. 3,330 million in 2003/04 to NRs. 3,890 million 2005/06 due to the increasing number of medical, nursing and paramedical schools in the private sector. Spending on capital formation ranged from 60-70 percent of total spending on HRD. Spending on education and training of health personnel increased from 31 percent in 2003/04 to 37 percent in 2005/06. Spending on research and development in health remained negligible (less than 1 percent). Details may be found in Table 6.3.

Table 6.3 Spending on HRD by Function

Code Function

2003/04 2004/05 2005/06


NFR.1

Capital formation of health care provider institutions 3346 69.19 3129 60.98 3867 62.94

NFR.2 Education and training of health personnel 1483 30.67 1983 38.65 2270 36.95

NFR.3 Research and development in health 7 0.14 19 0.37 7 0.11

Total 4836 100 5131 100 6144 100

Medical schools are the biggest provider of human resource development, accounting for 58-61 percent of total spending on HRD. Spending on medical schools has increased from 2,950 million in 2003/04 to 3,590 million in 2005/06. Paramedical and nursing schools are the second-biggest providers, accounting for 37-39 percent of total spending on HDR. Other


55

providers include national and regional health training centres, which offer the trainings to medical, nursing, and paramedical personnel. The share of others is less than 5 percent.

Table 6.4: Spending on HRD by providers

Provider

2003/04 2004/05 2005/06


Medical schools 2947 60.94 2958 57.65 3584 58.33

Paramedic and Nursing

Schools 1765 36.5 1962 38.24 2375 38.66

Others 124 2.56 211 4.11 185 3.01

Total 4836 100 5131 100 6144 100

Chapter VI: Review and Analysis of Household Expenditure

7.1 Review of health in household expenditure

The main source of household expenditure data is the Nepal Living Standard Survey (NLSS 2003/04) published by the Central Bureau of Statistics. The household health expenditure figure in the NLSS II more or less corresponds to private household out-of-pocket expenditures on health (NRs. 17,120 million) recorded in the present survey.

7.2 Household expenditure by category

Household expenditure is grouped into two categories: food and non-food expenditures. Of the total household expenditure, 59 percent goes to non-food consumption, including rent, education expenditures, health expenditures, and other non-food expenditures. Table 7.1 presents the distribution of household expenditures by expenditure category. This table shows households giving much importance to health than education, in terms of non-food expenditure: education accounted for 2.8 percent while health got 5.7 percent. Expenditure on all food and non-food categories varies by location and income group. The percentage of household expenditure spent on food in urban areas was just 29 percent whereas in rural areas it is as high as 63 percent. Urban dwellers give much importance to education while those in rural areas spend much more on health. A disparity in consumption patterns determined by income becomes apparent in examining the data. While the wealthiest spent 40 percent of their income on food, the poorest spent 73 percent. Furthermore, the data shows that both the richest and poorest groups gave greater


56

priority to health than education. Spending in health and education, however, vary by income group: as a percentage of total household expenditure, the richest spent 7 percent on health while the poorest spent around 4 percent.

Table 7.1: Nominal household consumption and its distribution, by expenditure category

Household Consumption (in millions of NRs.)

Percentage Distribution

Food

Ren

t

Educ

atio

n

Hea

lth

Oth

er n

on-

food

Tota

l

Urban 126,557 39.1 18.5 5.6 4.3 32.6 100

Rural 223,424 62.9 7.7 2.3 6 21.1 100

Wealth Quintile

Poorest 21,704 73 5.8 1.3 3.7 16.2 100

Second 32,611 66.9 6.8 1.8 5 19.5 100

Third 44,478 64.8 7.4 2.3 5.4 20 100

Fourth 64,666 58.1 9.4 3.2 6.7 22.6 100

Richest 186,523 40.1 15.5 4.8 7 32.6 100

National 349,981 59 9.5 2.8 5.7 23 100

7.3 Household expenditure by Facility

The total cost of treatment at a government health facility (NRs. 698) is comparable to the cost at a private health institution (NRs. 662). By disaggregating the total cost, it emerges that diagnostic and other services cost slightly more at private health facilities (NRs. 136 versus NRs. 99 at a government facility). On the other hand, medical costs are higher at a government facilies (NRs. 538 versus NRs. 465 at a private institution). Travel costs are similar to both types of facilities. Consultations in urban areas are generally more expensive than in rural areas. Treatment costs by facility shows that households of all income categories spend more at government facilities than at private facilities. However, analysis of the treatment cost at government and private health facilities shows that expenditure varies by income group, with the richest spending 16 times more in government health facilities than at private facilities,


57

while the poorest spend 6 times more than at private facilities. These disparities are mirrored in medical and travel costs as well.

Table 7.2: Household expenditure on the most recent consultation at government or private institution for acute illness (in NRs.)

Expenditure Category

Government Institution Private Institution

Diagnostic & other service cost

Medicine cost

Travel cost

Total cost

Diagnostic & other service cost

Medicine cost

Travel cost

Total cost

Wealth Quintile

Poorest 6 116 2 1,24 23 171 50 199

Second Poorest 29 181 14 2,24 21 245 11 277

Third 24 2,15 20 2,59 37 295 34 366

Fourth 38 400 520 4,90 1,12 415 450 572

Richest 3,45 1518 183 2046 338 873 148 1359

Urban 254 1278 80 1612 263 602 66 931

Rural 78 436 58 572 1,12 439 61 612

Nepal 99 538 610 698 1360 465 62 663

7.4 Inequality in Household Expenditure on Health

The breakdown of household expenditure on health by quintile shows great variations between the various income quintiles. Table 7.3 shows that the richest quintile spends about NRs. 255 while the poorest spends NRs. 10.75 – 24 times lower than that of the richest quintile.


58

Table 7.3: Per capita household expenditure on health per month, by wealth quintile

7.5 Household Expenditure by Gender and Age Group

Like with income groups, a breakdown of household expenditure on health by gender and age also shows great variation. Women were found o spend less share of their household budget compared to their male counterparts except in 0-5 year and 6-15 year age group. This is especially unfortunate in the case of women of child bearing age (aged 16-50, and indicates the inequality in the distribution of health care expenditure.

Wealth Quintile

Modern medicine and health care (code=237)

Tradition medicines and health care (code=238)

Total health expenditure

Poorest Quintile

Mean expenditure per person NRs. 10.34 0.41 10.75

Share of household budget spent on health (%) 2.42 0.09 2.63

Second Quintile



Third Quintile



Fourth Quintile



Richest Quintile



Total 75.88 1.38 77.26



59

Table 7.4: Per capita household expenditure on health by age and sex

Age group Males Females

0-5 years

Mean expenditure per person NRs. 48.78 49.45

Share of Household Budget spent on health (%) 5.01 5.08

6-15 years



16-50 years



Over 50 years



7.6 Household Expenditure on Health by Geographical Region

Table 7.5 presents per-capita household expenditure by the three ecological belts and five development regions of Nepal. Households in Terai region spend more than households in the Hill or Mountain regions. Per capita spending on health in the Mountain region is NRs. 19.43 compared to NRs. 63.88 in the Hill region and NRs. 96.46 in the Terai region.


60

Table 7.5: Per capital household expenditure on health (in NRs.)

Mountain Region Hill Region Terai Region Total

Description Mea

n Ex

pend

iture

Shar

e of

hou

seho

ld

budg

et o

n he

alth

ca

re (%

)

Mea

n Ex

pend

iture

Shar

e of

hou

seho

ld

budg

et o

n he

alth

ca

re (%

)

Mea

n Ex

pend

iture

Shar

e of

hou

seho

ld

budg

et s

pent

on

heal

th c

are

(%)

Eastern

Total health expenditures (items 237 & 238) 24.74 2.47 42.28 4.26 91.46 8.42 71.2

Central

Total health expenditures (items 237 & 238) 25.00 2.89 55.29 2.35

105.30 10.37 7.1

Western

Total health expenditures (items 237 & 238) NA NA 65.48 4.06

108.76 8.55 82.04

Mid-Western

Total health expenditures (items 237 & 238) 2.79 0.31

115.24 11.34

114.86 10.34 104.28

Far Western

Total health expenditures (items 237 & 238) 16.75 1.83 59.08 7.00 34.71 3.75 37.07

Total 19.43 63.88 96.46 77.266


61

Chapter VIII: Conclusions

The Nepal National Health Accounts, 2004-2006 is the second attempt by the HEFU to produce an NHA. The major conclusions are as follows:

• Total health expenditure (THE), at nominal prices, continued a trend of growth throughout the review period. THE at real prices was also rising up to 2004/05, but dropped to NRs. 27,355 million in 2005/06 from NRs. 29,465 million in 2004/05.

• The government’s contribution to THE accounted for 23.7 percent, donors contributed 20.8 percent, and the private sector contributed 55.6 percent in 2005/06. Out-of-pocket expenditure as a percentage of THE has been decreasing, dropping from 62 percent in 2002/03 to 50 percent in 2005/06.

• In 2006, private household outlays alone accounted for about 90 percent of total private financing, while NGOs contributed around 8 percent. NGO contributions to THE rose from 2 percent in 1994/95 to over 16 percent in 2005/06.

• THE as a percentage of GDP was estimated at 5.3 percent in 2005/06, dropping from 5.6 percent in 2004/05. Out-of-pocket payments as a percentage of GDP stood at 3 percent while that of EDPs stood at 1.1 percent in 2005/06. The government is increasing its share compared to the GDP, and its contribution rose from less than 1 percent in 2000/01 to1.3 percent in 2005/06.

• THE as a percentage of GDP is relatively high in Nepal compared to other SAARC countries, with the exception of the Maldives. Nepal lagged behind Afghanistan, Bhutan, China, India, but was ahead of Bangladesh and Pakistan in terms of per capita health expenditure.

• Per capita health expenditure is estimated at NRs. 1,574, equivalent in 2005/06 to USD 23.59, up from NRs. 1,004 (USD 13.40) in 2002/03. Government per capita expenditure on health stood at NRs. 318 (USD 4.50), private per-capita expenditure was NRs. 747 (USD 10.50), with the rest of the world contributing NRs. 280 (USD 3.90) to health in 2005/06.

• Total health expenditure by function shows medical goods dispensed to outpatient forming the largest component in terms of expenditure, followed by health-related functions, preventive health care and public health services, curative care services, and lastly, health programme administration and health insurance, and ancillary services.

• THE by provider also rose during the review period. Among providers, the majority of THE was the result of retail sale outlets and other providers of medical goods. A trend of increasing expenditure was seen at hospitals and providers of


62

ambulatory health care services, as well as for the provision and administration of public health programmes.

• As provider general health administration and insurance has its own importance in the context when social health insurance is not existed in Nepal. In the absence of social health insurance, the government will have to take on the role of health care provider, as directed by the free health care policy, and greater expenditure is to be expected in this regard.

• According to the NLSS II, health expenditure accounted for 5.7 percent of total household expenditure. Disparities in expenditure patterns mirror income levels, with the richest spending 7 percent of household expenditure on health while the poorest spend 4 percent.

Recommendations

Nepal spends over 5.6 percent of its GDP on health, yet health outcomes changed only marginally. Nepal will need to improve the efficiency of the health system by reducing costs and improving health outcomes. The share of I/NGOs' expenditure as a percentage of THE rose to 17 percent in 2005/06 from 2 percent in 1994/95; - Likewise, government expenditure rose from 16 percent to 24 percent, and out-of-pocket expenditure decreased from 71 in percent 2004/05 to 50 percent in 2005/06. Nonetheless, out-of-pocket expenditures are still too high and will need to be reduced by further I/NGO and government inputs. Since I/NGOs have increased their contributions markedly in the last ten years, there should be greater oversight of their activities to ensure equitable and efficient distribution of services. Because there are conflicting opinions on how best to reduce out-of-pocket expenditures, a survey should be conducted with this goal specifically in mind. Some health services common in other countries such as day care services, social security, and widely available private health insurance are not available in Nepal. Despite this, it would be helpful to create components for them since such services are expected to emerge in the course of time In resource-poor settings like Nepal, EDPs help reduce the resource gap. Nonetheless, EDP funding is not a sustainable source of financing, and efforts need to be made to increase government funding by boosting the GDP growth rate. Periodic surveys of VDCs, municipalities, and DDCS would be both costly and time-consuming. Instead, a coordination mechanism should be developed at the central and local


63

level enabling a regular flow of information from local bodies in coordination with the Ministry of Local Development (VDCs, Municipalities and DDCS) and DPHOs to produce and update the NNHA. The present NNHA study benefited significantly from the framework provided by the first round Nepal National health Account, which was developed according to OECD guidelines. Although this framework has been beneficial, there are still some challenges to further integration of the SHA. There is some confusion surrounding the functional codes, and it lacks clarity in general. Additionally, there are some health activities which do not fit in any of the functional codes. These are issues that should be addressed in future studies. Prevention and public health functions included in the ICHA-HC do not cover all fields of public health, in the broadest sense. These broadly defined public health functions, such as emergency plans, environmental protection, water supply and sanitation, and so forth, are not included as health expenditures, but they certainly affect the quality of life. Thus, it stands to reason to consider these functions in the context of public health. Prevention and promotive programmes should be given a separate a sub-functional code under HC 6 itself. Preventive programmes might consist of child health, reproductive health, and disease control. Promotive programmes, on the other hand, might include nutrition programmes, human resources development, environmental health programmes, and non-communicable disease programmes.

Institutionalization the NNHA is critical, and the attention it has been getting from policymakers is encouraging. This makes it especially important for the HEFU to update the NNHA on a regular basis, and HEFU staff should be trained accordingly.


64

References

Data International (2003). Bangladesh National Health Accounts, 1999-2001. Report Prepared for Government of the People’s Republic of Bangladesh, Ministry of Health and Family Welfare, Health Economics Unit. Data International. Nepal Health Economics Association & Institute of Policy Studies (2002). Equity in Financing and Delivery of Health Services in Bangladesh, Nepal and Sri Lanka: Results of the Tri-Country Study. Report prepared for European Union (EU). HMG/Nepal, DoHS, Ministry of Health (2005). Annual Report of Department of Health Services, 2060/61 (2003/04). 2005. HMG/Nepal, Ministry of Health (Nepal], New ERA, ORG Macro (2002). Nepal Demographic and Health Survey( 2001). Calverton, Maryland, USA; Family Health Division, Ministry of Health; New ERA; and ORG Macro. HMG/Nepal, Ministry of Health, District Health Strengthening Project (2004), HMG/N-DFID, British Council, Public Expenditure Review of Health Sector. HMG/Nepal, Ministry of Health, District Health Strengthening Project (2004). HMG/N-DFID, British Council, Framework for Nepal National Health Accounts. HMG/Nepal, National Planning Commission, Central Bureau of Statistics (2004). Nepal Living Standard Survey 2003/2004. Hotchkiss DR, Rous J, Karmacharya K and Sangraula P. (1998). Household Health Expenditures in Nepal: Implications for Health Care Financing Reform. Health Policy and Planning 1998; 13(4): 371-383. Institute of Policy Studies of Sri Lanka, Ministry of Health (2001). Sri Lanka National Health Accounts/Sri Lanka, National Health Expenditures: 1990 – 1999. Musgrove P, Zeramdini R, Guy Carrin G (2002). Basic patterns in national health expenditure, Bulletin of the World Health Organization. 2002; 80(2): 134-146. Organization for Economic Co-operation and Development (OECD, 2000). A System of Health Accounts (SHA), Version 1.0. OECD. 2000.


65

Partners for Health Reformplus (PHRplus 2003). Understanding National Health Accounts: Methodology and Implementation Processes. Abt Associates Inc. Maryland, USA, URL: www.PHRplus.org 2003. Pharmaceutical Horizon of Nepal (2006) Report on Consumption of Antibiotics and Other Medicines. Submitted to the Department of Drug Administration. Kathmandu. Pharmaceutical Horizon of Nepal (2006) Report on Qualification of Drug Consumption in Nepal. Submitted to the Department of Drug Administration. Kathmandu. Prasai DP, Karki D, Ganwali D, Subedi GR, Singh AB (2006) Nepal National Health Accounts, 2001-2003, Government of Nepal/Ministry of Health. Kathmandu. Rannan-Eliya, R., et al (2001). Equity in Financing and Delivery of Health Services in Bangladesh, Nepal and Sri Lanka, Sri Lanka: Institute of Policy Studies. Swedish International Development Co-operation Agency (SIDA, 2001). National Health Accounts: Where are we today? Issue Paper prepared by Catharina Hjortsberg for Department for Democracy and Social Development, Health Division. Health Division Document 2001:6. 2. World Bank (2000). Nepal Operational Issues and Prioritization of Resources in the Health Sector. Health, Nutrition and Population Unit, South Asia Region. Report No. 19613. World Health Organization (WHO, 2003). Guide to producing national health accounts with special applications for low-income and middle income countries. World Health Organization (WHO, 2001), Macroeconomics and health: Investing in health for economic development, Report of the commission on macroeconomics and health, World Health Organization. World Health Organization (WHO, 2006). What are national health accounts? Accessed at: http://www.who.int/nha/what/en/ ; Accessed on: 16 January 2006. World Bank (2005) State-in-conflict -- Resilient People: An Assessment of Changes in Poverty in Nepal between 1995-96 and 2003-04


66

Annex 1: Classifications in the NNHA

Classification of Sources of Health Care Funding in Nepal

Source code

NCS code NCS label SHA HF

code

1000 NS1 General government HF.1

1100 NS1.1 General government excluding social security HF.1.1

1110 NS1.1.1 Central government HF.1.1

1111 NS1.1.1.1 General tax revenues HF.1.1

1112 NS1.1.1.2 Earmarked taxes (health tax on alcohol and tobacco) HF.1.1

1120 NS1.1.2 Local governments/municipalities HF.1.1

1200 NS1.2 Social security/National health insurance funds HF.1.2

2000 NS2 Private sector HF.2

2100 NS2.1 Social insurance enterprises HF.2.1

2200 NS2.2 Other private household out-of-pocket expenditure HF.2.2

2300 NS2.3 Private household out-of-pocket expenditure HF.2.3

2400

NS2.4

Non-profit institutions serving households (other than social insurance)

HF.2.4

2500 NS2.5 All corporations (other than health insurance) HF.2.5

9000 NS9 Rest of the world HF.3

9100 NS9.1 Official donor agencies

9200 NS9.2 International not-for-profit agencies

9300 NS9.3 All the other foreign funds


67

Table A1.2 Classification of Health Care Providers in Nepal

Provider code

NCP code NCP label SHA HF

code

10000 NP1 All hospitals HP.1

11000 NP1.1 Hospitals HP.1.1

11100 NP1.1.1 Tertiary hospitals HP.1.1

11200 NP1.1.2 Secondary hospitals HP.1.1

11300 NP1.1.3 Primary hospitals HP.1.2

12000 NP1.2 Psychiatric hospitals HP.1.2

13000 NP1.3 Speciality hospitals HP.1.2

19000 NP1.9 All other hospitals HP.1.3

20000 NP2 Nursing and residential care facilities HP.2

21000 NP2.1 Nursing care facilities HP.2.1

22000 NP2.2 Residential mental health/substance abuse facilities HP.2.2

23000 NP2.3 Community care facilities for the elderly HP.2.3

29000 NP2.9 All other residential care facilities HP.2.9

30000

NP3

Providers of ambulatory health care (Primary care providers)

HP.3

31000 NP3.1 General practices (GP clinics) HP.3.1

32000 NP3.2 Dental clinics HP.3.2

33000 NP3.3 Other registered allopathic health care providers HP.3.3

34000 NP3.4 Registered non-allopathic health care providers HP.3.3

35000 NP3.5 Unregistered health providers HP.3.3

36000 NP3.6 Outpatient care providers HP.3.4


68

Provider code


code

36100 NP3.6.1 General outpatient care providers HP.3.4

36200 NP3.6.2 Family planning centres HP.3.4.1

36300 NP3.6.3 Outpatient mental health and substance abuse centres HP.3.4.2

36400 NP3.6.4 Free-standing ambulatory surgery centres HP.3.4.3

36500 NP3.6.5 Dialysis care centres HP.3.4.4

36900 NP3.6.9 All other outpatient multi-speciality centres HP.3.4.5

37000 NP3.7 Medical and diagnostics laboratories HP.3.5

38000 NP3.8 Providers of ambulatory health care services HP.3.6

39000 NP3.9 Other providers of ambulatory health care HP.3.9

39100 NP3.9.1 Ambulance services HP.3.9.1

39200 NP3.9.2 Blood and organ banks HP.3.9.2

39300 NP3.9.3 Providers of all other ambulatory health care services HP.3.9.9

40000

NP4

Retail sale outlets and other providers of medical goods

HP.4

41000 NP4.1 Pharmacies HP.4.1

41100 NP4.1.1 Allopathic pharmacies/dispensaries HP.4.1

41200 NP4.1.2 Non-allopathic pharmacies/dispensaries HP.4.1

42000

NP4.2

Retail sales outlets and other suppliers of optical glasses and other vision products

HP.4.2

49000

NP4.9

Retail sales outlets and other suppliers of hearing aids, medical appliances (other than vision products), and all other pharmaceutical and medical goods

HP.4.9


69

Provider code


code

50000

NP5

Provision and administration of public health programmes

HP.5

60000 NP6 General health administration and insurance HP.6

61000 NP6.1 Government administration of health HP.6.1

62000 NP6.2 Social security funds HP.6.2

63000 NP6.3 Other social insurance HP.6.3

64000 NP6.4 Other (private) insurance HP.6.4

65000 NP6.5 All other providers of health administration HP.6.9

70000 NP7 Other industries (rest of the Nepalese economy) HP.7

71000 NP7.1 Providers of occupational health care services HP.7.1

72000 NP7.2 Private households (classified as providers of home care) HP.7.2

73000

NP7.3

All other industries (classified as secondary providers of health care)

90000 NP9 Rest of the world HP.9

Table 2.5 Classification of Health care Functions in Nepal

Function code NCF code NCF label

SHA HC code

100000 NF1 Curative care services HC.1

110000 NF1.1 In-patient curative care HC.1.1

111000 NF1.1.1 Allopathic hospital inpatient care HC.1.1

112000 NF1.1.2 Allopathic hospital outpatient care HC.1.1

113000 NF1.1.3 Non-allopathic hospital inpatient care HC.1.1

114000 NF1.1.4 Non-allopathic hospital outpatient care HC.1.1


70


SHA HC code

115000 NF1.1.5 Other inpatient curative care HC.1.1

120000 NF1.2 Day cases curative care HC.1.2

130000 NF1.3 Outpatient curative care HC.1.3

131000 NF1.3.1 Basic medical and diagnostic services HC.1.3.1

132000 NF1.3.2 Outpatient dental care HC.1.3.2

133000

NF1.3.3

All other discipline-specific specialized medical care services

HC.1.3.3

134000

NF1.3.4

Non-allopathic medicine and other health care services

HC.1.3.9

139000 NF1.3.9 Curative home care services HC.1.4

200000 NF2 Rehabilitative care services HC.2

210000 NF2.1 In-patient rehabilitative care HC.2.1

220000 NF2.2 Day-cases of rehabilitative care HC.2.2

230000 NF2.3 Outpatient rehabilitative care HC.2.3

240000 NF2.4 Rehabilitative home care HC.2.4

300000 NF3 Long-term nursing care HC.3

310000 NF3.1 In-patient long-term nursing care HC.3.1

320000 NF3.2 Day-cases of long-term nursing care HC.3.2

330000 NF3.3 Long-term nursing care (home care) HC.3.3

400000 NF4 Ancillary health care services HC.4

410000 NF4.1 Clinical laboratory services HC.4.1

420000 NF4.2 Diagnostic imaging HC.4.2

430000 NF4.3 Patient transport and emergency rescue HC.4.3

490000 NF4.9 All other ancillary services HC.4.9


71


SHA HC code

500000 NF5 Medical goods dispensed to outpatients HC.5

510000 NF5.1 Pharmaceuticals and other medical non-durables HC.5.1

511000 NF5.1.1 Prescription medicines HC.5.1.1

512000 NF5.1.2 Over-the-counter medicines HC.5.1.2

512100 NF5.1.2.1 Allopathic medicines HC.5.1.2

512200 NF5.1.2.2 Non-allopathic medicines HC.5.1.2

513000 NF5.1.3 Other medical non-durables HC.5.1.2

520000 NF5.2 Therapeutic appliances and other medical durables HC.5.2

521000 NF5.2.1 Glass and other vision products HC.5.2.1

522000 NF5.2.2 Orthopaedic appliances and other prosthetics HC.5.2.2

529000 NF5.2.9 All other miscellaneous medical durables including hearing aids and medico-technical devices, such as wheelchairs HC.5.2.9

600000 NF6 Preventive health care and public health services HC.6

610000 NF6.1 Family health (MCH and FP) and reproductive health services HC.6.1

611000 NF6.1.1 Safe motherhood services including newborn care and family planning HC.6.1

612000 NF6.1.2 Infant and child health HC.6.1

613000 NF6.1.3 Family planning services HC.6.1

614000 NF6.1.4 Young people's sexual and reproductive health HC.6.1

615000 NF6.1.5 Other reproductive health HC.6.1

620000 NF6.2 School health services HC.6.2

630000 NF6.3 Prevention and management of communicable diseases HC.6.3

631000 NF6.3.1 Immunization (except EPI) HC.6.3

632000 NF6.3.2 Water and food borne disease control HC.6.3


72


SHA HC code

633000 NF6.3.3 Tuberculosis and leprosy control HC.6.3

634000 NF6.3.4 STDs HC.6.3

635000 NF6.3.5 Vector borne diseases HC.6.3

636000 NF6.3.6 Other communicable diseases HC.6.3

640000 NF6.4 Prevention and management of non-communicable diseases HC.6.4

650000 NF6.5 Occupational health care HC.6.5

690000 NF6.9 All other public health services HC.6.9

700000 NF7 Health programme administration and health insurance HC.7

710000 NF7.1 Government administration of health and health-related social security HC.7.1

720000 NF7.2 Private health administration and health insurance HC.7.2

800000 NF R Health-related functions HC.R

810000 NF R.1 Capital formation of health care provider institutions HC.R.1

820000 NF R.2 Education and training of health personnel HC.R.2

830000 NF R.3 Research and development in health HC.R.3

840000 NF R.4 Drinking water and sanitation HC.R.4

850000 NF R.5 Administrative and provision of social services to those living with disease and impairment HC.R.6

860000 NF R.6 Administrative and provision of health related cash benefits HC.R.7

890000 NF R.9 All other health-related expenditures


73

Annex 2 Total Health Expenditure by Sources, Function and Providers

Table A2.1: Total Health Expenditure by Source of Funding, 2003/04-2005/06 (in millions of NRs.)

NCS code NNHA Source of Health care Funding 2003/04 2004/05 2005/06

NS1 General government

NS1.1 General government excluding social security 236.03 288.18 397.01

NS1.1.1 Central government 259.84 214.90 94.69

NS1.1.1.1 General tax revenues 4,795.30 6,003.14 7,714.29

NS1.1.1.2 Earmarked taxes (health tax on alcohol and tobacco) - - -

NS1.1.2 Local governments/municipalities 21.23 29.08 33.21

NS1.2 Social security/National health insurance funds - - -

Sub-total General government 5,312.41 6,535.30 8,239.20

NS2 Private sector - - -

NS2.1 Social insurance enterprises - - -

NS2.2 Other private household out-of-pocket expenditure 49.11 54.03 59.43

NS2.3 Private household out-of-pocket expenditure 17,071.08 17,740.39 17,325.09

NS2.4 Non-profit institutions serving households (other than social insurance) 1,397.63 1,391.96 1,484.47

NS2.5 All corporations (other than health insurance) 339.23 749.46 463.69

Sub-total Private sector 18,857.05 19,935.84 19,332.67

NS9 Rest of the world - - -

NS9.1 Official donor agencies 2,672.48 2,099.41 2,759.25

NS9.2 International not-for-profit agencies 3,802.06 4,382.51 4,454.55

NS9.3 All the other foreign funds 6.43 6.97 9.96

Sub-total Rest of the world 6,480.97 6,488.89 7,223.76

236.03 288.18 397.01


74

NCS code NNHA Source of Health care Funding 2003/04 2004/05 2005/06

THE 259.84 214.90 94.69

Share of Sources

NS1 General government 17% 20% 24%

NS2 Private sector 62% 60% 56%

NS9 Rest of the world 21% 20% 21%

Total 100% 100% 100%

Total Health Expenditure by Providers, 2003/04-2005/06 (in millions of NRs.)

Provider code

NCP code NNHA Providers of Health care 2003/04 2004/05 2005/06

10000 NP1 All hospitals 5,788 6,277 7,246

20000 NP2 Nursing and residential care facilities 0 0 0

30000 NP3 Providers of ambulatory health care (Primary care providers) 5,506 6,142 6,852

40000 NP4 Retail sale outlets and other providers of medical goods 10,656 10,922 9,190

50000 NP5 Provision and administration of public health programmes 4,885 4,973 6,263

60000 NP6 General health administration and insurance 3,175 4,013 4,613

70000 NP7 Other industries (rest of the Nepalese economy) 12 11 15

90000 NP9 Rest of the world 629 623 616

Total Health Expenditure (THE) 30,650 32,960 34,796

Source: NNHA, 2008


75

Table A2.2 Health Expenditure by Providers of Health Care (2003/04 – 2005/06)

Provider 2004 2005 2006

10000 NP1 All hospitals 5,788,371,867 6,277,294,686 7,246,426,951

20000 NP2 Nursing and residential care facilities - - -

30000 NP3 Providers of ambulatory health care (Primary care providers) 5,506,309,420 6,141,594,812 6,852,054,780

40000 NP4 Retail sale outlets and other providers of medical goods

10,655,502,868

10,922,117,716 9,190,044,886

50000 NP5 Provision and administration of public health programmes 4,884,582,489 4,972,618,258 6,262,913,468

60000 NP6 General health administration and insurance 3,174,786,589 4,013,032,222 4,613,305,711

70000 NP7 Other industries (rest of the Nepalese economy) 11,569,765 10,562,923 14,584,047

90000 NP9 Rest of the world 629,300,000 622,800,000 616,300,000

Total 30,650,422,997

32,960,020,616

34,795,629,843

10000 NP1 All hospitals 5,788,371,867 6,277,294,686 7,246,426,951

10000 NP1 All hospitals - - -

11000 NP1.1 Hospitals 280,922,846 228,269,950 276,124,161

11100 NP1.1.1 Tertiary hospitals 1,883,852,927 2,057,230,594 2,306,102,298

11200 NP1.1.2 Secondary hospitals 3,107,998,233 3,264,388,207 3,911,840,191

11300 NP1.1.3 Primary hospitals 107,954,055 211,681,956 171,350,887

12000 NP1.2 Psychiatric hospitals - - -

13000 NP1.3 Speciality hospitals 393,809,638 500,756,364 564,733,222

19000 NP1.9 All other hospitals 13,834,168 14,967,614 16,276,192

20000 NP2 Nursing and residential care facilities - - -

21000 NP2.1 Nursing care facilities - - -


76

Provider 2004 2005 2006

22000 NP2.2 Residential mental health/substance abuse facilities - - -

23000 NP2.3 Community care facilities for the elderly - - -

29000 NP2.9 All other residential care facilities - - -

30000 NP3 Providers of ambulatory health care (Primary care providers) 5,506,309,420 6,141,594,812 6,852,054,780

30000 NP3 Providers of ambulatory health care (Primary care providers) - - -

31000 NP3.1 General practices (GP clinics) - - -

32000 NP3.2 Dental clinics - - -

33000 NP3.3 Other registered allopathic health care providers 238,991,019 333,738,021 320,384,864

34000 NP3.4 Registered non-allopathic health care providers 25,558,398 29,976,898 40,137,029

35000 NP3.5 Unregistered health providers - - -

36000 NP3.6 Outpatient care providers 4,815,660 4,903,770 4,730,452

36100 NP3.6.1 General outpatient care providers 1,873,694,187 2,078,594,701 2,213,993,192

36200 NP3.6.2 Family planning centres 1,019,977,424 1,096,335,793 1,248,039,799

36300 NP3.6.3 Outpatient mental health and substance abuse centres 136,327,222 150,130,154 167,409,798

36400 NP3.6.4 Free-standing ambulatory surgery centres - - -

36500 NP3.6.5 Dialysis care centres - - -

36900 NP3.6.9 All other outpatient multi-speciality centres - - -

37000 NP3.7 Medical and diagnostics laboratories 219,556,173 223,020,547 200,222,637

38000 NP3.8 Providers of ambulatory health care services - - -


77

Provider 2004 2005 2006

39000 NP3.9 Other providers of ambulatory health care 1,764,751,957 1,961,666,643 2,375,298,096

39100 NP3.9.1 Ambulance services 106,111,224 119,928,361 129,393,076

39200 NP3.9.2 Blood and organ banks 9,046,021 8,951,771 11,852,310

39300 NP3.9.3 Providers of all other ambulatory health care services 107,480,134 134,348,154 140,593,527

40000 NP4 Retail sale outlets and other providers of medical goods

10,655,502,868

10,922,117,716 9,190,044,886

41000 NP4.1 Pharmacies - - -

41100 NP4.1.1 Allopathic pharmacies/dispensaries 9,900,769,824 9,990,724,305 8,422,870,598

41200 NP4.1.2 Non-allopathic pharmacies/dispensaries 754,733,044 931,393,411 767,174,289

42000 NP4.2

Retail sales outlets and other suppliers of optical glasses and other vision products - - -

49000 NP4.9

Retail sales outlets and other suppliers of hearing aids, medical appliances (other than vision products), and all other pharmaceutical and medical goods - - -

50000 NP5 Provision and administration of public health programmes 4,884,582,489 4,972,618,258 6,262,913,468

60000 NP6 General health administration and insurance 3,174,786,589 4,013,032,222 4,613,305,711

60000 NP6 General health administration and insurance - - -

61000 NP6.1 Government administration of health 244,720,182 189,262,426 1,057,114,079

62000 NP6.2 Social security funds 69,651,942 73,729,177 154,897,209

63000 NP6.3 Other social insurance 3,042,950 14,571,336 28,956,604


78

Provider 2004 2005 2006

64000 NP6.4 Other (private) insurance 18,477,224 20,324,946 22,357,441

65000 NP6.5 All other providers of health administration 2,838,894,291 3,715,144,337 3,349,980,378

70000 NP7 Other industries (rest of the Nepalese economy) 11,569,765 10,562,923 14,584,047

71000 NP7.1 Providers of occupational health care services 2,889,070 2,745,658 4,308,448

72000 NP7.2 Private households (classified as providers of home care) 4,076,439 4,076,439 5,918,989

73000 NP7.3 All other industries (classified as secondary providers of health care) 4,604,256 3,740,826 4,356,610

90000 NP9 Rest of the world 629,300,000 622,800,000 616,300,000

TOTAL 30,650,422,997

32,960,020,616

34,795,629,843


79

Table A2.3 Functional Classification

Function Code Classification 2004 2005 2006

100000 NF1 Curative care services

5,096,609,257 5,940,117,949 6,069,703,279

110000 NF1.1 In-patient curative care 490,876,320 375,638,169 372,414,567

111000 NF1.1.1 Allopathic hospital inpatient care

1,707,348,794 2,034,158,817 2,326,236,258

112000 NF1.1.2 Allopathic hospital outpatient care 460,476,667 570,180,767 672,453,021

113000 NF1.1.3 Non-allopathic hospital inpatient care 15,383,207 17,538,578 18,505,480

114000 NF1.1.4 Non-allopathic hospital outpatient care 4,138,693 5,670,053 5,400,511

115000 NF1.1.5 Other inpatient curative care - - -

120000 NF1.2 Day cases curative care - - -

130000 NF1.3 Outpatient curative care 162,446,452 180,113,317 192,770,761

131000 NF1.3.1 Basic medical and diagnostic services

2,118,681,261 2,575,068,982 2,260,720,058

132000 NF1.3.2 Outpatient dental care - - -

133000 NF1.3.3

All other discipline-specific specialised medical care services 27,487,058 45,317,976 78,717,841

134000 NF1.3.4 Non-allopathic medicine and other health care services 109,770,805 136,431,290 142,484,783

139000 NF1.3.9 Curative home care services - - -

200000 NF2 Rehabilitative care services - - -

210000 NF2.1 In-patient rehabilitative care - - -

220000 NF2.2 Day-cases of rehabilitative care - - -

230000 NF2.3 Outpatient rehabilitative care - - -


80


240000 NF2.4 Rehabilitative home care - - -

300000 NF3 Long-term nursing care - - -

310000 NF3.1 In-patient long-term nursing care - - -

320000 NF3.2 Day-cases of long-term nursing care - - -

330000 NF3.3 Long-term nursing care (home care) - - -

400000 NF4 Ancillary health care services 430,570,070 633,689,101 591,265,417

410000 NF4.1 Clinical laboratory services 38,457,057 38,825,263 30,444,171

420000 NF4.2 Diagnostic imaging 179,837,117 182,414,284 169,778,467

430000 NF4.3 Patient transport and emergency rescue 203,067,935 403,251,454 378,900,470

490000 NF4.9 All other ancillary services 9,207,961 9,198,100 12,142,310

500000 NF5 Medical goods dispensed to outpatients

10,667,248,97

1

10,917,070,934 9,188,560,461

510000 NF5.1 Pharmaceuticals and other medical non-durables 7,166,395 - 7,699,382

511000 NF5.1.1 Prescription medicines 13,409,023 15,724,439 19,557,203

512000 NF5.1.2 Over-the-counter medicines - - -

512100 NF5.1.2.1 Allopathic medicines

9,903,118,368 9,982,417,349 8,400,588,555

512200 NF5.1.2.2 Non-allopathic medicines 743,555,185 918,929,147 760,715,322

513000 NF5.1.3 Other medical non-durables - - -

520000 NF5.2 Therapeutic appliances and - - -


81


other medical durables

521000 NF5.2.1 Glass and other vision products - - -

522000 NF5.2.2 Orthopaedic appliances and other prosthetics - - -

529000 NF5.2.9

All other miscellaneous medical durables including hearing aids and medico-technical devices, such as wheelchairs - - -

600000 NF6 Preventive health care and public health services

5,085,735,672 5,148,921,414 6,090,288,617

600000 NF6 Preventive health care and public health services

1,558,184,479 1,511,928,890 1,682,884,273

610000 NF6.1 Family health (MCH and FP) and reproductive health services 810,284,000 62,520,000 254,453,577

611000 NF6.1.1

Safe motherhood services including newborn care and family planning 89,483,372 165,109,622 80,403,454

612000 NF6.1.2 Infant and child health - - -

613000 NF6.1.3 Family planning services - - -

614000 NF6.1.4 Young people's sexual and reproductive health - - -

615000 NF6.1.5 Other reproductive health 37,715,000 - 210,856

620000 NF6.2 School health services 419,332,406 478,899,284 489,155,855

630000 NF6.3 Prevention and management of communicable diseases 803,109,475 826,841,265 957,506,132

631000 NF6.3.1 Immunization (except EPI) 15,264,748 46,410,250 67,086,357

632000 NF6.3.2 Water and food borne disease control 215,020,649 275,981,078 231,055,979

633000 NF6.3.3 Tuberculosis and leprosy control 310,964,262 545,240,099 672,409,427


82


634000 NF6.3.4 STDs 44,508,492 90,407,598 135,210,670

635000 NF6.3.5 Vector borne diseases 869,697 9,940,847 838,219

636000 NF6.3.6 Other communicable diseases 390,139,957 433,489,997 469,917,189

640000 NF6.4 Prevention and management of non-communicable diseases 6,844,909 91,957,731 58,628,574

650000 NF6.5 Occupational health care 384,014,226 610,194,752 990,528,056

690000 NF6.9 All other public health services - - -

700000 NF7

Health programme administration and health insurance

3,493,527,451 3,923,545,131 4,512,316,205

700000 NF7

Health programme administration and health insurance - - -

710000 NF7.1

Government administration of health and health-related social security

1,236,249,996 1,383,391,727 1,938,158,228

720000 NF7.2 Private health administration and health insurance

2,257,277,455 2,540,153,404 2,574,157,977

800000 NF R Health-related functions

5,876,731,577 6,396,676,086 8,343,495,864

810000 NF R.1 Capital formation of health care provider institutions

4,001,414,674 3,933,598,728 5,592,411,736

820000 NF R.2 Education and training of health personnel

1,689,907,402 2,208,248,584 2,426,397,432

830000 NF R.3 Research and development in health 95,147,580 135,194,587 115,312,387

840000 NF R.4 Drinking water and sanitation 6,230,071 9,523,465 14,383,908


83

850000 NF R.5

Administrative and provision of social services to those living with disease and impairment 82,400,170 108,486,621 193,378,890

860000 NF R.6 Administrative and provision of health related cash benefits - - -

890000 NF R.9 All other health-related expenditures 1,631,680 1,624,100 1,611,510

TOTAL

30,650,422,99

7

32,960,020,616

34,795,629,843

Documents

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