Falling healthcare investment is hurting economy, says analyst

How does the healthcare industry influence the economy?

An increase in health care costs might prompt governments to raise taxes, increase borrowing or reduce investments in other critical sectors such as education and infrastructure, suppressing economic growth and affecting both businesses and households. That is why we are calling for greater accountability in managing the health sector, especially where public resources are involved.

This brings me to the issue of accountability, how it distorts service delivery and its impact on the economy. What are your thoughts?    

We are concerned about the state of transparency and accountability in the management of resources of the country’s health sector. According to a study undertaken by Uganda Debt Network  on accountability for health sector resources, whereas the health sector has registered significant increase in its funding from Shs1.3trilion in Financial Year (FY) 2015/16 to Shs3.3 trillion in 2021/22, public spending on health remains inadequate.

Note that the national health spending as a proportion of total government spending is estimated at 7 per  cent  in FY 2021/22 and total health expenditure per capita is estimated at $36.9 compared to the minimum recommended $86 by the World Health Organisation for low income countries.

Fast forward, in FY 2021/22, the largest portion of the health budget (45 percent) is to be retained at the centre under the Ministry of Health vote while local governments, where the bulk of services are delivered constitutes only 22 per cent of the health budget. Moreover, government support to the health budget has decreased by 14 per cent from 74 per cent in FY 2011/12 to 60 per cent in FY 2021/22.

Furthermore, 93 per cent of government contribution to health is allocated to recurrent expenditure and only 7 per cent to development expenditure. This implies that the development component of the health budget is largely funded by health development partners. This should not be the case, considering the ripple effect of the sector to not only livelihoods but also the economy. 

What kind of healthcare is the public getting?

There is still so much to be done in this regard. We are not convinced that majority of our people are treated to the best quality health care available. Look, the quality of service delivery, according to the National Development Plan NDP III is inadequate.

The country’s development blue print discloses that there is inadequate functionality of health facilities despite significant increase in access to health services. This pauses a question on quality of services accessed by the population in view of the inadequate functionality of the health facilities.

If you look at the Auditor General’s report (FY 2020/21), it says in regard to functionality and availability of medical equipment in seven key departments in Mulago National Referral Hospital, some vital medical equipment was in poor working condition, while others were not fully functional and required replacement.This was attributed to the limited funding provided under the capital development budget of the hospitals. These are the issues we keep pointing out.

So how does all these affect the health sector?

Whatever we say is informed by either research or thorough analysis. Many of our observations point to a dysfunctional health system. But let me use the Auditor General’s finding whose work is to conducts audits, investigations and assess the efficiency, effectiveness, and accountability of public resources.  These findings reveal our accountability concerns. In the report, the Auditor General highlighted issues that have adversely affected performance of the health sector including; overpayments and irregular expenditure totaling to Shs920.9 billion. This was noted during payment for construction works of the Health Centre IIs in Local Government and municipalities. Furthermore, Shs209.17 billion was made without providing the breakdown of work items being certified.

In the same report, Mulago National Referral Hospital had liabilities of Shs2.95 billion from the previous year (FY 2019/20).

However, payments totaling to Shs3.77 billion in respect of the liabilities were made. The Hospital, therefore, made payments for non-existent liabilities amounting to Shs1.47 billion. 

 The Hospital spent Shs474.4 bilion on refurbishment of the MRI machine. The MRI machine was delivered and installed in 2018 and has since never been put to use.

Doesn’t that strike you as wastage? Therefore, behind these fraud or wastage, there are livelihoods, let alone an entire economy paying heavy price for a crime being committed by a handful of indiscipline, mean or even unbothered characters.         

So where do we go from here?

Government needs to step up its efforts of mobilising resources, particularly from domestic sources to bridge the funding gap in the health sector, especially for development expenditure. Then district Service Commissions should be constituted where they are non-existent. This will enable the district to recruit staff and to absorb the health department wage.

The staffing structure at district and facility level should also be reviewed to cater for changes in population.

HEALTH BUDGET

Domestic demand

In FY 2021/22, the largest portion of the health budget (45 percent) is to be retained at the centre under the Ministry of Health vote while local governments, where the bulk of services are delivered constitutes only 22 per cent of the health budget.

Moreover, government support to the health budget has decreased by 14 per cent from 74 per cent in FY 2011/12 to 60 per cent in FY 2021/22.