Pakistan Towards a Health Sector Strategy

Transcription

1 Report No PAK Pakistan Towards a Health Sector Strategy April 22, 1998 Health, Nutrition and Population Unit South Asia Region u Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Document of the World Bank

2 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY Abbreviations AJK Azad Jammu and Kashmir BHU Basic Health Unit BOD Burden of Disease DALY Disability-Adjusted Life Year DG Director-General of Health Services DHO District Health Officer DHQ District Headquarters Hospital DOH Department of Health DOTS Directly Observed Treatment-Short Course EDL Essential Drugs List EPI Expanded Program of Immunization ESSI Employee Social Security Institution FANA Federally Administered Northern Areas FATA Federally Administered Tribal Areas GDP Gross Domestic Product GOP Government of Pakistan HMIS Health Management Information System HMO Health Maintenance Organization HRD Human Resource Development ICT Islamabad Capital Territory IDA International Development Association LHV Lady Health Visitor LHW Lady Health Worker MCH Maternal and Child Health MNA Member of the National Assembly MOH Ministry of Health MPA Member of the Provincial Assembly NGO Non-Governmental Organization NWFP North West Frontier Province PHC Primary Health Care PIHS Pakistan Integrated Household Survey RHC Rural Health Center RWSS Rural Water Supply and Sanitation SAP Social Action Program SAPP Social Action Program Project TFR Total Fertility Rate THQ Tehsil Headquarters Hospital UAE United Arab Emirates WHO World Health Organization WDR World Development Report Vice President: Country Director: Sector Manager: Staff Member: Mieko Nishimizu Sadiq Ahmed Richard L. Skolnik Hugo Diaz

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

4 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY CONTENTS Abstract Executive Summary... i-xvi I. INTRODUCTION... 1 II. BACKGROUND A. The Health Situation in Pakistan... 3 B. Recent Government Health Expenditure Trends... 6 C. Health and the Social Action Program... 7 III. SETTING PRIORITIES FOR GOVERNMENT FINANCING IN HEALTH A. The Current Burden of Disease B. The Health Delivery System : 14 C. Health Services Coverage and Utilization D. Cost of Government Health Services E. Priorities for the Use of Public Funds F. Areas of Potential Savings G. Cost Recovery H. Tertiary Hospital Autonomy I. Conclusions and Recommendations IV. IMPROVING THE MANAGEMENT OF GOVERNMENT-FINANCED HEALTH SERVICES A. The Management Profile of Government Health Services B. Main Management Problems C. Suggested Reforms D. Conclusions and Recommendations V. FOSTERING THE DEVELOPMENT OF PRIVATE HEALTH SERVICES A. Private Sector Importance and Issues B. Addressing Constraints Through Public/Private Partnerships C. Conclusions and Recommendations ANNEXES: ANNEX 1 - Summary of Main Recommendations ANNEX 2 - Bibliography ANNEX 3 - Burden of Disease Estimates ANNEX 4 - School Health Program ANNEX 5 - Government Health Expenditure Data

5 Abstract The health of the population in Pakistan has improved in the past three decades, but the pace of improvement has not been satisfactory. Today, Pakistan lags well behind the averagesfor low-income countries in key indicators, including infant and child mortality and the totalfertility rate. Poor health status is in part explained by poverty, low levels of education (especially for women), the low status of women in large segments of society, and inadequate sanitation andpotable waterfacilities. But it is also related to serious deficiencies in health services, both public andprivate. There is a broad consensus in Pakistan that the health sector is in need of fundamental reform in order to achieve a better impact on the health status of the population. The present report has been prepared as a contribution to the national debate on health sector reform. The report focuses on three key broad areas of public policy in the health sector: the setting ofpriorities for the use ofpublic revenues; management problems in the government health services and possible reforms; and weaknesses in private health services and suggestionsfor improving the beneficial effects of these services. Priorities among health services financed with public revenues should take account of what the private health sector is doing and could do in the short to medium term. Generally, government health services should seek to avoid "crowding out" private services, provided that the latter are supplied by providers with the requisite training. Such providers are not available in many rural areas of the country. The report recommends that top priority should be given to health education, in such areas as nutrition, creating greater awareness of the health benefits of adequate birth spacing, and stressing the importance of immunization and other preventive interventions; control of communicable infectious diseases; and maternal and child health services includingfamily planning, pre- andpost-natal care, deliveries by trained personnel, and management of the sick child, especially for diarrhea, acute respiratory infections and malnutrition. Most of these top priority services could be delivered through first-level health care facilities linked to community-based health workers and backed by referral services in secondary hospitals at the Tehsil and District levels. The top priority services generally merit subsidization from public revenues. However, except for health education and certain types of communicable disease control interventions, the subsidy need not be equal to the cost of production. But the issue of what constitutes a suitable cost recovery policy in the health sector is a complex one. If charges were increased, there would be a risk of displacing poor patients towards untrainedpractitioners or self-care, and discrimination against women/girls in households' health care expenditure could increase. The latter effect would moreover tend to be more pronounced among poor households. Thus any new system of increased

6 user charges would need to incorporate safeguards to protect the poor, and be piloted before its widespread application. Enhanced cost recovery would increase the resources available to the government health services, provided that steps are taken to ensure that revenues accrue to the collectingfacilities and are truly incremental to their budgets. But there is also much scope for improving the efficiency of resource use and achieving a greater impact with existing resources. This could be achieved through reforms such as setting better priorities among types of inputs; undertaking periodic in-depth budget reviews of both the development and the current budgets; deepening decentralization of management in the Provinces; establishing Health Boards at the district level; involving communities in supporting government health care providers and helping to increase their accountability; contracting out some services to NGOs and others in the private sector; and placing a greater emphasis on staff development. At the same time that a concerted effort is made within the government health sector to improve efficiency, responsiveness and impact, the public sector also needs to work with private health care providers and their representatives to effect a parallel improvement in private health services. The public policy goal should be to achieve an optimal division of labor between the public and private health sectors. Attention to private health services is crucial because surveys show that in Pakistan the great majority of the population seek the care of private providers when they fall ill --in many cases providers with little or no medical training. The report suggests several types ofpartnerships between the public and the private sectors in order to improve private services. Partnerships could aim at encouraging continuing education ofprivate providers; empowering professional associations to manage a system of certification and licensing ofproviders; introducing a voluntary accreditation system for private clinics and hospitals; enhancing attention to preventive interventions; fostering consumer education in the health area; and facilitating the development of health insurance.

7 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY EXECUTIVE SUMMARY A. Scope of the Report 1. I'he health sector in Pakistan is in need of fundamental reform to enhance the impact of health services on the health status of the population. This need has been acknowledged by numerous knowledgeable observers and participants in the sector, both from the public and private segments of the sector. 2. The present report has been prepared as a contribution to what will hopefully be a concerted effort by government, the private health care sector, NGOs, and consumers, to restructure the health sector in Pakistan over the next decade and beyond. It attempts to synthesize and assess a number of ideas and suggestions for health sector reform which originate from a variety of sources. 3. The report was prepared in conjunction with the work towards the preparation of the Second Social Action Program Project (SAPP-II). In the context of that work, each Province/area formulated their own health policy and strategy statements and a reform agenda for the next four years. The Federal Ministry of Health and Ministry of Population Welfare formulated strategies for several top-priority programs where the activities of the federal government complement those of the provinces/areas. The health sector strategies formulated by the Provinces/areas and federal government in the context of preparation of SAPP-II are broadly consistent with the recommendations of this report. 4. A key input for the provincial/area and federal strategies, as well as for this report, were discussions with a broad range of health sector experts from the public and private sectors during three National Workshops on Health Sector Reform and SAPP-II organized by the Ministry of Health with donor support during 1995 and Inputs from these workshops were further elaborated in the course of discussions with provincial and federal government officials and NGO representatives during preparation of SAPP-II. The reform experience in the first phase of the Social Action Program also informed these discussions. 5. Other sources that have influenced the conclusions and recommendations of this report include: -Interviews with staff of government health facilities in all provinces as well as managers at the district and provincial levels. -Interviews with private health care providers and representatives of various associations of such providers. -.Recent thinking at the World Bank and other sources of analysis of developing country health sector issues on the role of government in the hiealth sector and related public finance issues. -Previous studies conducted by local and international experts.

8 - ii - 6. The report focusses on three key broad areas of public policy in the health sector, namely: -How should the government go about setting broad priorities for the use of scarce government revenues to pay for health prevention and care. Priorities refer to types of services, types of inputs, and types of households (e.g., poor versus non-poor). -What are the main management problems in the government health services which cut across all services and reduce their beneficial impact, and what types of management reforms could be pursued (including moving provision outside of the public sector) in order to achieve a greater impact for the government revenues spent in the health sector. -What are the main weaknesses of private health services and what are some of the reforms that could be pursued to enhance the beneficial impact of those services, with an emphasis on the formation of various types of partnerships between the public and the private sectors. 7. Any coherent strategy for the restructuring of the health sector would have to address all three broad areas, and seek to achieve an optimal division of labor between the public and private health care sectors (in both provision and financing). 8. While the report stresses the importance of the population welfare program and the need for the government to play a strong role in the provision of family planning services and associated information and education, it does not discuss in detail the present organization of the program --e.g., concerning the issue of whether existing vertical family planning services should be integrated with the rest of government health services. 9. Similarly, while communicable disease control is identified as a top priority for the government health services, the report does not discuss in detail how specific key services are provided. Some of these issues are quite important and more research on them is needed in Pakistan's context. Examples include: (i) the approach to the control of tuberculosis, including the strategies that could be followed to introduce the new DOTS approach to treatment (just starting to be piloted in the country); (ii) the approach to the control of malaria, including the balance among various vector control methods, and strategies to speed up the diagnosis and treatment of malaria cases; and (iii) strategies to raise immunization coverage. B. The Health Situation in Pakistan 10. The health of the population in Pakistan has improved in the past three decades, but the pace of improvement has not been satisfactory. Today, Pakistan still lags well behind the averages for all low-income countries in important respects --even though Pakistan's GNP per capita is above the average for low-income countries. Its infant mortality rate (about 100 per thousand births), and its under-five mortality rate (140 per thousand births), exceed the low-income country averages by 60 percent and 36 percent respectively. Pakistan's total fertility rate exceeds the average for lowincome countries by as much as 75 percent. The burden that this high fertility places on mothers is reflected in a maternal mortality rate of roughly per 100,000 births. By comparison, the maternal mortality rate is less than 10 in most industrial countries and less than 100 in Sri Lanka --a low-income country with a good primary health care system.

9 - iii - Indicators of nutrition are also worse in Pakistan than in many countries with comparable income levels. 11. Analysis of the burden of disease (BOD) in Pakistan --an aggregate measure of the losses of healthy life in the form of disability and premature death due to all episodes of disease and injuries that occur in a given year-- indicates that almost forty percent of the total BOD is accounted for by communicable infectious diseases. These mostly consist of diarrheal diseases, respiratory infections, tuberculosis, and the cluster of immunizable childhood diseases. Another twelve percent of the total BOD is accounted for by reproductive health problems (maternal and perinatal mortality and disability). Nutritional deficiencies, particularly micronutrient-related, account for a further six percent of the total BOD. Other major categories are injuries with eleven percent of the total BOD, and cardiovascular disease with ten percent of the total BOD. Thus Pakistan is still at an early stage in the epidemiological transition, with basically preventable or readily treatable diseases affecting primarily young children and women of reproductive age accounting for a dominant share of mortality and morbidity. C. Improving Health Requires Advances in Many Fronts 12. The factors behind poor health in Pakistan are many, and hence improving health requires advances in a variety of fronts. (a) Poverty. Pakistan has had good growth for several decades, but is still a poor country. The most recent World Bank estimates of consumption poverty indicate that in 1990/91 about 34 percent of the population had levels of consumption below a poverty line of about Rs. 300 per capita per month at prices of that year (US$12 equivalent at the then prevailing official exchange rate). Poverty negatively affects health status through constraining the ability of households to purchase various health-related services and goods. (b) Education. Pakistan has lagged behind badly in terms of educating its population, and this is more so with regard to women. Lack of education results in poorly educated consumers of health services and constrains the adoption of key disease-prevention behavior. Worldwide evidence suggests that when mothers have at least basic schooling, families tend to be smaller and healthier. Pakistan is now making a major effort to upgrade the educational status of its population, and especially of women, under the Social Action Program. {c) The low status of women. In addition to their extremely low levels of education, women in Pakistan are constrained in seeking health care for themselves and their children on account of their restricted rnobility and social patterns. In many rural areas, women are not permitted to leave the house or village and are subject to often extensive restrictions in their interactions with any males from outside their immediate family. This tradition of seclusion often makes it difficult for rural women to travel to seek health care for themselves and their children. In recent years, under the Social Action Program, the government has started to address this problem through the development of community-based health care services with female workers. (d) Inadequate sanitation and water supplies. The large burden of infectious disease in Pakistan is closely related to lack of adequate sanitation facilities and safe sources of potable water for many

10 - ivhouseholds. It is estimated that, at present, only about 55 percent of rural households have access to safe water; about one-fourth have sanitation facilities. Improving access to safe water and sanitation facilities is another area of focus under the Social Action Program. (e) The poor quality of health services. Both government and private health services suffer from serious quality deficiencies, which detract from the impact of health services on the health status of the population. 13. Pakistan is at an early stage in the epidemiological transition, and simple technological solutions are appropriate to prevent or treat a majority of illness episodes. Communicable infectious diseases, reproductive health problems and micro-nutrient deficiencies are categories for which medical science has been most successful in identifying or developing effective prevention and treatment interventions, which generally require only modest levels of skills and resources. Dramatic improvements in health status could be achieved if such interventions were more widely applied. The main ones include standard public health measures such as health and nutrition education, provision of clean water and sanitation facilities, and reduction of other environmental hazards such as air pollution; immunization; drug therapy for the treatment of tuberculosis; and maternal and child health care programs consisting of family planning, pre- and post-natal care, deliveries by trained personnel, and management of the sick child --especially for diarrhea, acute respiratory infections, and malnutrition. In addition, the cause of better health would also be served by advances in literacy/education; the decline of poverty, leading inter alia to better household food security; and improvement in the status of women in the society. D. Health Services Infrastructure and Use 14. The health services delivery system in Pakistan is a mix of public and private providers. In the public sector, provincial, federal and some local governments operate tertiary care hospitals in the larger urban areas. In rural areas and smaller towns, the provincial governments (and the governments of FANA, AJK, ICT and FATA) operate an extensive infrastructure of first-level care facilities and secondary care hospitals, supported by several federal programs. The government is by far the major provider of hospital care in rural areas, and it is also the main provider of preventive care throughout the country. The Ministry of Population Welfare operates its own network of family welfare centers for the provision of family planning services. 15. The private health services sector is dominated by more than 20,000 "clinics", the small, office-based practices of general practitioners. Other private sector facilities such as dispensaries, maternity homes and laboratories also tend to be small. There are also more than 500 small and medium-size private hospitals with about 30 beds per hospital on average. They are equipped only for basic surgical, obstetric, and diagnostic procedures, and concentrate on low-risk care. In addition, there are a few large private hospitals, mainly run by NGOs and located in major cities. The private health care sector also includes over 11,000 pharmacies, as well as probably several times that number of non-pharmacy retail outlets selling drugs. There are many traditional or informal health care providers with little or no medical training. In rural areas especially, the number of traditional providers greatly exceeds that of providers with formal medical training.

11 v 16. Formal private health services are concentrated in urban areas. Only about 30 percent of all private health facilities (mostly clinics and dispensaries) are located in the rural areas, where about 70 percent of the population reside. Private urban hospitals are mostly concentrated in nine large cities. These cities account for more than 75 percent of private sector hospital beds. Only about one-fifth of all pharmacies are located in rural areas, which are served mostly by non-pharmacy drug retail outlets. 17. There has been no survey of NGOs working in the health sector. However, the precdominant view is that they are small in number and, for the most part, in size, and that they are heavily concentrated in urban areas. A notable exception is the Aga Khan Health Services program, which has been successful in implementing its community-oriented primary health care model in two districts of the Northern Areas. 18. While access to government rural health facilities and secondary care hospitals is generally good in most areas, utilization levels are low. A 1993 survey conducted by the Ministry of Health and WHO found that, in the last working day preceding the survey, the average number of outpatients seen at a Rural Health Center was just 34; for Basic Health Units, the corresponding figure was 24 (a Rural Health Center usually has a staff of about 30, while Basic Health Units usually have a staff of about 10). A cost study conducted for this report, based on a small sample of 40 facilities, also found low levels of utilization for Basic Health Units, Rural Health Centers, Tehsil Headquarters Hospitals, and District Headquarters Hospitals. 19. At the same time, household surveys show that most people seek care from private providers when they fall ill, at least for first consultations. The 1991 Pakistan Integrated Household Survey showed that only about one-fifth of first consultations nationwide were with government providers, mostly hospitals. The largest group, at 46 percent, reported seeing private doctors, while about 30 percent reported seeing private providers with no formal medical training --mostly staff or owners of medical stores who freely dispense prescription drugs. The latter figure is probably an underestimate, since many informal health care providers in Pakistan pass themselves off as "doctors". Tabulations from the 1995/96 Pakistan Integrated Household Survey show similar results. 20. There is, of course, nothing wrong with people using private health care providers, provided that they have the requisite training. This is in fact a good thing, since it releases fiscal resources that can be allocated to other high-pr:lority uses for which there are no private alternatives. But when a large proportion of the population is using health care providers who lack the requisite training, that is not a good state of affairs. The result is not just poor care for the immediate problem but often also exacerbation of future health problems, for instance through the indiscriminate use of antibiotics which gives rise to resistant strains of bacteria. 21. In many rural areas, trained private health care providers are not availab:le. Thus, in these areas it is particularly important to improve the quality of government health services to induce people to switch from informal sources of advice and drugs to government health services. Better consumer education would also help in this regard. Given the apparently large degree of unutilized capacity in the government services, unit costs of government services would decline, making these services more efficient.

12 - vi - E. Weaknesses in Government Health Services 22. Government health services suffer from many weaknesses that impair their efficiency, quality and impact. The most important are discussed below. Insufficient Focus on Preventive Interventions 23. Government health services have traditionally had a curative orientation. Health staff have tended to passively wait for sick people to come to their facilities for treatment. However, the pattern of disease in Pakistan calls for a greater emphasis on preventive interventions; such emphasis also requires health staff to be more proactive and to seek to educate the neighboring communities on how to take better care of their health. The inadequate emphasis on preventive interventions is reflected in the unsatisfactory coverage of immunization, maternal and child health services, and family planning services. Health education programs are also poorly developed. Gender Imbalances 24. The government health services are predominantly male --both frontline staff and managers. A more balanced gender composition would be highly beneficial. It would result in a better rapport between the health staff and the female population, who are also the critical link to reach young children. While progress in recruiting frontline female staff has been made in recent years under the Social Action Program, large gaps still remain. Of 134 rural health facilities sampled in the 1995/96 Pakistan Integrated Household Survey, one-third did not have any female staff. Excessive Centralization of Management 25. The management of provincial government health services is very centralized in all of its phases (planning, implementation and monitoring) and aspects (personnel, finances, and supplies). Most managers have little control over resources and real management decision making rests far away from the delivery of services. Negative Staff Attitudes and Absenteeism 26. While difficult to document, there is a widespread impression in Pakistan that the attitudes of government health staff towards the public are often negative or unfriendly. Absenteeism is also generally acknowledged to be a significant problem. Government health staff are often absent from their posts during duty hours. In many cases, staff theoretically posted to a rural health facility are actually "seconded" to other government facilities in urban areas. In some cases staff reportedly make payments to their supervisors in order to be allowed to be absent from their jobs. In other cases they are reported to be protected by politicians who shield them from disciplinary action in exchange for votes or political work. Staff, especially medical officers, compete for postings to health facilities in the busier towns and trading centers where they can have a profitable private clinic on the side. This tends to increase the frequency of transfers and further weakens the ties of staff to communities.

13 - vii - Political Interference 27. Politicians often interfere in various types of personnel decisions, such as recruitment, transfers and disciplinary actions. This results in lower efficiency of the government health services and is a major demoralizing factor for managers and staff. Lack of Openness 28. Government health services have little interaction with community bodies, professional associations, NGOs, and the private health services. The absence of meaningful interaction with these other segments of civil society weakens accountability and the impetus for reform. Weak Human Resource Development 29. Human resource development in the government health services has been deficient in its three dimensions: planning, production and personnel management. The planning of human resources has been incomplete and intermittent. It has resulted in serious imbalances among categories of staff --particularly insufficient numbers of female paramedics. Concerning the production of human resources, although there has been significant progress in recent years, more needs to be done to improve in-service training, both technical and managerial. Personnel management has been largely limited to. personnel actions (recruitment, promotions, transfers, etc.), to the detriment of other key functions such as setting performance standards and carrying out performance assessments. Personnel management has also suffered from excessive centralization and political interference. Insufficient Non-Salary Budgets 30. The government health services have suffered from insufficient budget allocations to fund current expenses other than staff salaries. These include expenses for drugs, diagnostics (laboratory tests, x-rays), repairs and maintenance of facilities, replacement of equipment, utilities, transportation, in-service training expenses, and health education materials. At the same time, government health services may be overstaffed in certain categories, such as general medical officers and non-technical support staff. Under the Social Action Program, there were attempts to raise the proportion of non-salary budget to total current budget but the results were mixed. 31. A cost study carried out for this report suggests that the provincial budget allocations for drugs would have to be several times the actual current allocations to be sufficient to cover the cost of treatment of all patients now using government facilities. However, large savings could be achieved if generic drugs were used in preference to branded drugs, and management of drugs were improved generally. F. Weaknesses in Private Health Services 32. The importance of the private health sector has been highlighted above. It has been noted that the great majority of people first consult a private provider when they fall ill. Survey data also suggest that household expenditure on privately-provided health services and goods may be about three times the amount of government health spending.

14 - viii The beneficial impact of private health services is diminished, however, by a number of weaknesses, of which the most important are: (a) The generally low quality of care and widespread "quackery" (practice of medicine by people with little or no formal training). (b) Insufficient attention paid to preventive interventions. (c) The lack of functioning regulatory mechanisms to protect the consumer. (d) The poor education of most consumers concerning health matters (which is in part a reflection of poor education generally). This results in consumers failing to distinguish between qualified and unqualified providers, and a weak effective demand for preventive interventions. (e) The concentration of trained private providers in urban and periurban areas. 34. The development of the private health sector is also constrained by the low level of development of the health insurance industry. The lack of access to health insurance poses a major problem for the financing by households of care for catastrophic episodes of illness or injuries. G. An Agenda for Reform 35. The above discussion makes it clear that there is a need for fundamental reform in the health sector. Reform needs to encompass both the public and private segments of the health sector, with a view to achieving an optimal division of labor between public and private production and financing of health services. 36. Within the public sector, there has been progress towards reform under the Social Action Program, launched in 1993/94. Awareness of Pakistan's poor performance in health and in fertility reduction has greatly increased. Total (federal and provincial) government health expenditure for all levels of service as a percentage of GDP has not increased and remains low by international standards. However, a larger share is now devoted to primary health services including community-based services and preventive services. More women health care providers kave been trained and hired, and a promising new Lady Health Workers Program has been started to provide the kind of community-based outreach that has worked to improve health world-wide. There have been some improvements in planning capacity and a beginning of decentralization of decision-making powers within provincial Departments of Health. Essential drug lists have been introduced for various types of government health facilities. Provincial Departments of Health are also attempting to strengthen the linkages between community-level workers, firstlevel care facilities, and the first level of referral. A "participatory development program" has been started to encourage provision of health services by NGOs. These are all promising steps, but much more remains to be done. Moreover, as noted, reform needs to encompass the private sector as well. 37. In the rest of this section, a number of specific suggestions for further health sector reform are made. The suggestions are divided between those pertaining to the public segment of the sector and those pertaining to

15 - ix - the private segment. However, it should always be kept in mind that public and private activities are often substitutes or complement each other, and that developments in one segment of the overall health sector will in most cases affect the other. Government Health Services 38. Achieving a Sharper Focus on Service Priorities. Government health services should seek to achieve a sharper focus on service priorities, in terms of both resources and management attention. Priorities for government services should be set taking due account of what the private health sector is doing (and could do in the short to medium term). Generally, government health services should seek to avoid the "crowding out" of private services, if the latter are offered by qualified providers. Government health services should rather seek to complement private services. 39. Use of public funds to pay for health services can be justified in the presenc,e of various market failures (i.e., situations where the behavior of private buyers and sellers would not lead to an optimal solution from society's point of view), such as the existence of public goods, externalities, information deficiencies, and insurance market failure. Public goods are goods or services such that one person's consumption does not reduce the amount available for others to consume. Typically these are goods from which consumers cannot be excluded: if they are made available to anyone, they are available to all, at least locally. Since people can consume such goods without having to pay for them, no one will produce them for sale to individual consumers. Therefore they will be produced only if the government pays for their production. Control of disease vectors, protection of water and food safety, and health education are examples of public goods. There are also some health interventions that provide significant positive externalities, such as the control of communicable diseases. In these cases, individuals can and do buy an intervention and benefit from it, but they cannot prevent non-consumers from also deriving some benefit. Private markets can exist but, in the absence of government subsidization, will produce less of these interventions than would be optimal for society as a whole. Information deficiencies cause many types of efficiency losses and may justify government intervention, including the use of public funds. Poorly developed health insurance markets may justify using public funds to subsidize treatment of catastrophic episodes of illness or injuries (which have a low incidence but are costly to treat in each case, relative to most households' income). However, in a low-income country such as Pakistan, only those interventions that are known to be highly cost-effective should be subsidized by the government in dealing with the problem of catastrophic events. 40. Within the general framework outlined in the previous two paragraphs, the setting of priorities for the use of public funds (and of scarce public managerial capacity) among types of health services needs to take into account relevant country characteristics. These include such factors as the level of development of the private sector, the epidemiological profile of the population, the level of education of consumers, and the social status of women. In Pakistan's case, three categories of health services would seem to deserve top priority in terms of allocation of government funds and management attention. These categories are: (i) health education, in such areas as nutrition, creating greater awareness of the links between proper spacing of births and the health of mothers and babies, stressing the importance of immunization and other preventive interventions, teaching basic hygiene practices, informing about AIDS and other sexually transmitted diseases, and

16 x producing better educated health consumers; (ii) control of communicable infectious diseases; and (iii) maternal and child health services including family planning, pre- and post-natal care, deliveries by trained health personnel, and management of the sick child, especially for diarrhea, acute respiratory infections and malnutrition. Moreover, for (ii) and (iii), greater priority should be given to the rural areas, where trained private health care providers are often not available. 41. Most of these top-priority services could be delivered through frontline first-level health care facilities linked to community-based health workers and backed by lean referral services in secondary hospitals. Mass media should be used to support and reinforce interpersonal health education activities undertaken by health personnel. 42. The technical knowledge to deliver the top-priority interventions is available in Pakistan but not sufficiently widespread. Moreover, as already noted, more work is needed to refine the approach to key services such as tuberculosis control, in order to enhance service effectiveness. 43. The top-priority services merit subsidization from government. However, except for health education, and certain types of communicable disease control interventions which are also public goods, the subsidy need not be equal to 100 percent of the cost of production. A certain degree of cost recovery may be possible, and desirable. A greater degree of cost recovery than at present is also desirable for other government-provided health services. 44. Stressing Cost Recovery. Cost recovery in government health facilities is very low. Revenue from user charges from all levels (primary, secondary and tertiary) amounts to about 2 percent of total government spending on health. The government may wish to reconsider its cost recovery policy. Since all real-world taxes are distortionary (i.e., cause individuals and firms to behave in ways that tend to reduce national income), the general principle should be that the government should not pay out of general revenues for any services that people would be willing to pay for themselves (out of pocket or through insurance premia). 45. Greater cost recovery would help to mobilize resources for non-salary inputs and for expanding services in several high-priority areas which have been neglected, including tuberculosis control, nutrition, obstetrical emergencies, and health education. With the fiscal situation in Pakistan certain to be extremely constrained in the foreseeable future, sufficient additional resources to meet these needs are unlikely to be available from general revenues. If more resources could be mobilized from the system's clients through user charges --from those who are willing and able to pay more--, faster progress would be possible. To this effect, the provincial Treasuries would have to ensure that the additional proceeds from enhanced user charges accrue to the government health services as incremental resources. 46. The issue of what would constitute a suitable health services cost recovery policy in Pakistan is a complex one, however. There are potential risks as well as benefits from raising user charges. First, if the poor are not exempt from higher user charges, many of them could stop using government facilities and resort to untrained practitioners or self-care instead. Secondly, there is also a risk that discrimination against women/girls in households' health care expenditure could increase. The latter effect would moreover tend to be more prononunced among poor households. Third, for

17 - xi - catastrophic illnesses/injuries, recovery of a large share of treatment costs would be problematic. 47. Because of the above risks, any changes in cost recovery policy would need to be preceded by careful analysis, and *revised charges ought to be piloted first in a few districts. 48. Encouraging Hospital Autonomy. There is considerable momentum in Pakistan towards granting greater managerial and financial autonomy to tertiary government hospitals (and, more recently, to District Headquarters Hospitals as well). Several hospitals already enjoy greater autonomy. Financial autonomy need not be associated with greater cost recovery, but in Pakistan the trend seems to be in favor of such an association. 49. The trend towards greater hospital autonomy is in general a positive development and should be encouraged. Proceeds from enhanced cost recovery can be used to finance expansions of service or improvements in quality that may not be feasible if the hospital is solely dependent on the government budget for its finances. Autonomy also endows managers with real powers, such as the power to select any new staff and to dismiss those who do not perform. Thus it: is likely to lead to major operational efficiency gains. 50. For the benefits of autonomy to materialize fully, though, certain conditions need to be present. The governing board of an autonomous hospital should have real autonomy. Its membership should adequately represent the major groups of stakeholders, and it should embody sufficient technical expertise as to be able to assess and guide the hospital's management team. Moreover, the granting of autonomy should be accompanied by the introduction of a performance agreement which broadly sets out the outputs expected from the autonomous hospital (as counterpart to the current government subsidy it may still be receiving, and its use of public assets). 51. I't is also necessary to guard against possible perverse equity effects. If the autonomous hospitals continue to rely to an extent on taxpayers' money, but poor people are not using their services, then operation of the hospitals would redistribute income away from the poor (since in Pakistan payment of taxes is approximately proportional to household income for all income deciles except the very top). To guard against this undesirable result, the government contribution to the budgets of the autonomous hospitals should be earmarked for subsidizing consumption of services by the poor. 52. Improving Efficiency and Management of Government Services. Greater hospital financial autonomy and increased cost recovery at other levels of the system would increase the resources available to government health services. But there is also much scope for improving the efficiency with which resources are used. The need for achieving a sharper focus on service priorities has already been noted. There are several other avenues of reform that would result in the government health services providing better value for money. {a) Setting Better Priorities Among Types of Inputs. In view of the existing unutilized capacity in many government facilities, the establishment of new facilities and upgradation of existing ones should be kept to a minimum, and it should be subject in each case to suitable criteria related to expected utilization and other relevant factors. Instead, priority should be given to providing for more adequate nonsalary inputs for existing facilities. Generic drugs should be given preference over branded drugs. Provision of additional staff in

18 - xii - existing facilities should be restricted to redressing imbalances, in particular increasing the numbers of female paramedics. For other categories of health staff, vacancies should not be filled automatically, but the continuing need for the positions should be examined first. In particular, the categories of general medical officers and non-technical support staff would appear to deserve close scrutiny. (b) Undertaking Periodic In-Depth Budget Reviews. The Federal and provincial governments should undertake periodic in-depth reviews of their ongoing health programs in order to assess their continuing need and the adequacy of program design. Examples of inefficient expenditure noted in this report include the school health program (as currently designed) and the construction of badly sited rural health facilities. (c) Deepening Decentralization of Management. The process of decentralization of management to the district level and below already initiated within provincial Departments of Health should be deepened. It should encompass all three phases of management --planning, implementation and monitoring. (d) Establishing Health Boards. In Pakistan, the government health services are currently both "purchasers" and "providers"; the same set of people in each province decides what types of services will be produced, and the specific manner in which the services will be produced (within the budget envelope agreed with Finance). One important option towards improving the organization and governance of the sector would be to split the two functions of purchasing and provision. This would enable "opening up" the decision-making process concerning broad resource allocation decisions to wider public representation, while enabling health sector specialists to concentrate on managing the production of services. Such a system would also facilitate holding providers accountable for their actions, provided that the purchasing authority has effective control of the health budget. In order to begin this process of opening up and improving provider accountability, the establishment of health boards at the provincial and district levels, with broad representation from users and the private and public health sectors, is suggested in this report. Initially, the health boards could have a predominantly coordinating role with limited authority. The role of the health boards could then evolve over time towards incorporating a sector planning function, with real authority over the allocation of government resources within their respective areas. Eventually these boards could become purchasing authorities for all government-financed health services within a given area --probably the district level. In this capacity, the health boards would enter performance-based management agreements (or contracts) with providers of various kinds --including NGOs and other private providers in addition to the staff of government facilities. In order for such an arrangement to be effective, the health boards would need to have sufficient authority to penalize providers whose performance falls short of what was agreed in the management agreements, including public sector providers. (e) Involving Communities. District health boards should have representation from community bodies (users). In addition, government health services would be rendered more responsive and effective if community participation could be made an integral part of the

19 - xiii - functioning of individual facilities. Ideally, such involvement should be comprehensive, including not only contributing resources but also participating in management. Achieving sustained grass-roots community participation in the health sector is difficult, however. It may be best to try different approaches through pilot projects first. (f) Contracting With NGOs and the Private Sector. NGOs tend not to suffer from the same performance problems as the public sector because of their smaller size and different organizational culture. Thus, in many instances, NGOs can be a very cost-effective channel for provision of government-financed health services; the government need not provide all it finances. Under the Social Action Program, the government has started a program to fund selected health NGOs. It is recommended in this report that the government expand its efforts to support the development of health NGOs. Specifically, it is suggested that the government focus its assistance on NGOs which are staffed and managed by women and whose focus is on the health of women and children. Additionally, it is suggested that the provincial governments consider running pilot projects whereby they would contract with a professional association of private physicians to provide a basic package of primary health services to an identified population, on a prepaid capitation basis. Another possibility would be to contract provision of services with some of the religious/ethnic-based organizations which are already active in the health field. Suitable performance criteria should be included in the contracts. (g) Putting a Greater Emphasis on Human Resource Development. The staff are the critical factor in providing quality health services, and their knowledge and skills are the critical factor in their performance, together with incentives and accountability. The existing weaknesses in human resource development have already been noted. To improve efficiency of government health services, greater emphasis needs to be placed on human resource development. Both technical and managerial inservice training should be stepped up, and aspects of decentralization and community participation should be included in this training. Personnel management should abandon its narrow focus on personnel actions and focus more on setting standards and assessing performance. And, most importantly, political interference in personnel management should stop. Private Health Services 53. At the same time that a concerted effort is made within the government health sector to improve quality, responsiveness and impact, the public sector also needs to work with private health care providers to effect a parallel improvement in private services. 54. The public policy goal should be to achieve an optimal division of labor between the public and private health sectors. The nature of such division of labor would change over time, depending on the state of development of the private sector and other factors. 55. At present, given the current state of development of the private health sector in Pakistan, the government has a legitimate role to play in a number of areas. The most important are:

20 - xiv - (a) Providing or arranging for the provision of public goods (as defined in para. 39 above), such as health education, consumer education, and any services conducive to a cleaner environment. Financing should be largely from general revenues. (b) Providing or arranging for the provision of health care services in localities not adequately served by trained private providers, with a strong focus on communicable diseases and maternal and child health. Financing should be a combination of government subsidy and user charges, but the poor should be exempt. (c) Providing or arranging for the provision of treatment for catastrophic illnesses/injuries, when cost-effective interventions are feasible, in order to compensate for the low level of development of health insurance institutions. Financing should be a combination of government subsidy and user charges, but the scope for cost recovery would be limited (as a proportion of cost of treatment). (d) Forming partnerships with the private sector to improve the skills of private health sector personnel, improve the standards of health care, enhance attention to preventive care, and encourage a better distribution of private providers. (e) Encouraging and guiding the development of the health insurance industry. 56. Over time, as the formal private health sector in Pakistan becomes stronger and expands its reach into the rural areas, and as the health insurance industry develops, the public sector's role in (b) and (c) above should decline (but the public sector would need to retain a key role in surveillance of communicable diseases). On the other hand, the public sector should have a permanent role in (a), (d), and (e), although the contents of public sector action would change over time. 57. For the near future, this report makes a number of specific suggestions for various types of partnerships between the public and private sectors, which would facilitate the efficient development of private health services and improve their beneficial effects on the health of the population. To summarize, it is suggested that the following initiatives be considered: (a) Active encouragement by the public sector of the continuing education work being carried out by various professional associations of health care providers. (b) Empowerment of professional associations to manage a system of certification/licensing of health care providers. (c) Introduction of a voluntary accreditation system for private clinics and hospitals. (d) Enhancement of attention to preventive care in private health care transactions through measures operating on both the supply side (correcting the curative bias of medical education) and the demand side (better informing the public about the benefits of preventive care).

21 - xv - (e) Public campaigns to educate consumers about the dangers of seeking help from health care providers who lack the requisite training, and to help consumers to identify various categories of providers. (f) Initiatives to foster the development of the health insurance industry, including allowing the self-employed to enroll in the ESSI system, a pilot project to develop health-maintenance organizations, and capacity-building work to strengthen the government's regulatory capabilities in health insurance. (g) A pilot project for provincial governments to contract with an association of private physicians for the provision of basic health services to a targeted urban slum population on a prepaid capitation basis. In Conclusion 58. The need for fundamental reform in Pakistan's health sector is clear. This report suggests a number of directions along which such reform could proceed. The payoff to successful reform would be large --in terms of reductions in infant and child mortality, maternal mortality, and improvements in the health status of the population at large. Successful reform will require a strong partnership between the public and the private sectors. 59. While many of the reforms suggested in this report could be pursued in the near term (and some are a continuation of ongoing trends), it would also be desirable for a national consensus to evolve on the basic characteristics of the health sector Pakistan should have over the longer term --say years from now. This is an area where the government should take the lead, but a highly participatory process would be necessary, involving representatives from all major groups of stakeholders. 60. The Government has recently taken an important step towards defining a strategy for the health sector in the next decade, by issuing a revised Nationa:L Health Policy (a previous policy paper had been issued in 1990). The policy priorities specified in the 1997 National Health Policy are broadly in line with the recommendations in this report. The National Health Policy places strong emphasis on decentralization and the development of district health systems; the establishment of District Health Authorities, with broad representation from government, health professionals and community leaders, to supervise the district health management teams and decide on resource allocation within their districts; the promotion of active community involvement in supervising and assisting government health facilities; bringing about better coordination between government health services and NGOs, and providing funding for selected NGOs and community-based organizations for the provision of health services; granting a much greater degree of autonomy to District Headquarters Hospitals; further reducing gender imbalances in staffing; broadening the ESSIs system of health insurance; and introducing a mechanism for the accreditation of private hospitals and clinics. Priority health programs specified in the National Health Policy include the Expanded Program of Immunization, the Prime Minister's Program for Family Planning and Primary Health Care, Maternal and Child Health, Reproductive Health, Acute Respiratory Infections and Diarrheal Diseases Control Programs, Malaria Control Program, Tuberculosis Control Program, AIDS Control Program, Nutrition, Mental Health, Oral and Dental Health, Health Education, and School Health Programs.

22 - xvi The National Health Policy also proposes an innovative scheme for the financing of health services in rural areas and underserved urban areas. In this scheme, families would purchase "health cards" from the government (through community-based organizations) for a flat per capita annual amount. Poor families would get the health cards for free. Enrolled families would be entitled to: (i) a basic package of essential services with no additional payments; and (ii) additional services (referral, emergencies) for which copayments would apply. Providers participating in the scheme would receive a flat annual per capita fee for the provision of the basic package to the enrolled families. For additional services they would be paid on a fee-forservice basis. Providers would include "privatized" first-level care facilities (e.g., BHUs operated by the existing staff, or by NGOs or private health care providers, with the government retaining ownership) and autonomous Tehsil and District Headquarters hospitals. The entire scheme would be closely supervised by the District Health Authorities with the assistance of community-based organizations. The scheme would aim at improving financial incentives of health professionals in rural areas for improving their performance. It would also enhance the resource base for the formal rural health system by pooling together public and private resources and personnel. The scheme would first be piloted in 2-3 Union Councils in each Province. 62. In conclusion, there are a number of good ideas and suggestions for improving the performance of the health sector in Pakistan currently on the table. In the coming years, some of these ideas will hopefully move to the implementation stage. The World Bank, ADB, DFID, WHO, UNICEF, UNFPA, and other bilateral and multilateral international assistance agencies interested in the development of the health sector in Pakistan would like to participate and assist in this process of renewal.

23 CHAPTER I: INTRODUCTION 1.01 The health sector in Pakistan is in need of fundamental reform. This need has been acknowledged by numerous knowledgeable observers and participants in the sector, both from the public and private segments of the sector. The need for reform is also reflected in the inclusion of health (including the population welfare program) in the Social Action Program (SAP), although the reforms targeted under SAP pertain not to the sector as a whole but only to basic government services The present report has been prepared as a contribution to what will hopefully be a concerted effort by government, the private health care sector, NGOs, and consumers, to restructure the health sector in Pakistan over the next decade and beyond. It attempts to synthesize and assess a number of ideas and suggestions for health sector reform which originate from a number of sources The report was prepared in conjunction with the work towards the preparation of the Second Social Action Program Project (SAPP-II). In the context of that work, each Province/area formulated their own health policy and strategy statements and a reform agenda for the next four years. The Federal Ministry of Health and Ministry of Population Welfare formulated strategies for several top-priority programs where the activities of the federal government complement those of the provinces/areas. The health sector strategies formulated by the Provinces/areas and federal government in the context of preparation of SAPP-II are broadly consistent with the recommendations of this report A key input for the provincial/area and federal strategies, as well as for this report, were discussions with a broad range of health sector experts from the public and private sectors during three National Workshops on Health Sector Reform and SAPP-II organized by the Ministry of Health with donor support during 1995 and Inputs from these workshops were further elaborated in the course of discussions with provincial and federal government officials and NGO representatives during preparation of SAPP-II. The reform experience in the first phase of the Social Action Program also informed these discussions Other sources that have influenced the analysis and recommendations of this report include: -Interviews with staff of government health facilities in all provinces as well as managers at the district and provincial levels. -Interviews with private health care providers and representatives of various associations of such providers. -Recent thinking at the World Bank and other sources of analysis of developing country health sector issues on the role of government in the health sector and related public finance issues. 1 The provinces are Punjab, Sindh, North-West Frontier Province (NWFP) and Balochistan. The areas are Northern Areas, Azad Jammu and Kashmir, the Federally Administered Tribal Areas (FATA) and the Islamabad Capital Territory (ICT).

24 -Previous studies conducted by local and international experts The report focusses on three key broad areas of public policy in the health sector, namely: -How should the government go about setting broad priorities for the use of scarce government revenues to pay for health prevention and care. Priorities refer to types of services, types of inputs, and types of households (e.g., poor versus non-poor). -What are the main management problems in the government health services which cut across all services and reduce their beneficial impact, and what types of management reforms could be pursued (including moving provision outside of the public sector) in order to achieve a greater impact for the government revenues spent in the health sector. -What are the main weaknesses of private health services and what are some of the reforms that could be pursued to enhance the beneficial impact of those services, with an emphasis on the formation of various types of partnerships between the public and the private sectors Any coherent strategy for the restructuring of the health sector would have to address all three broad areas, and seek to achieve an optimal division of labor between the public and private health care sectors (in both provision and financing) It should be stressed at the outset that the report does not contain a comprehensive analysis of issues and problems in the health and population welfare sector. In particular, it does not enter into discussions concerning the details of how specific key services are provided (and should be provided). Some of these issues are quite important and more work on them is needed in Pakistan's context. Thus, while the report stresses the importance of the population welfare program and the need for the government to play a strong role in the provision of family planning services and associated information and education, it does not discuss in detail the present organization of the program. Similarly, while communicable disease control is identified as a top priority for the government health services, the report does not discuss in detail specific issues such as: (i) the approach to the control of tuberculosis, including the strategies that could be followed to introduce the new DOTS approach to treatment (just starting to be piloted in the country); (ii) the approach to the control of malaria, including the balance among various vector control methods, and strategies to speed up the diagnosis and treatment of malaria cases; and (iii) strategies to raise immunization coverage The rest of the report is organized as follows. Chapter II provides a brief analysis of the health situation in Pakistan, recent trends in government expenditure, and the health and population welfare aspects of the SAP. Chapter III discusses the main issues surrounding the setting of priorities for government financing and makes several suggestions for priorities which take into account the country situation. Chapter IV discusses management problems in the government health services and suggests an agenda for reforms. Chapter V discusses weaknesses in the private health care sector and gives a number of suggestions to foster the efficient development of the sector. A summary of recommendations is provided in Annex 1 for ease of reference.

25 CHAPTER II: BACKGROUND A. The Health Situation in Pakistan 2.01 The health of the population in Pakistan has improved in recent decades. As shown in Table 2.1 below, survey data suggest that the infant mortality rate declined from about 140 per thousand live births around 1970 to about 101 per thousand in the early 1990s. Infant mortality in the early 1990s was. higher for boys than for girls (105 versus 97), and higher in rural areas than in urban areas (108 versus 81). Life expectancy at birth is also estimated to have gone up between 1970 and the early 1990s: from 49 to 63 years for females and from 50 to 61 years for males. The larger increase for females reverses the previous anomaly of higher life expectancy for males. The total fertility rate, which is an important determinant of the health status of women and children, has apparently begun to decline.' It was estimated at 7.0 in 1970, and it appears to have fallen to somewhere between in the late 1980s and early 1990s But despite this progress, Pakistan still lags well behind the averages for all low-income economies in important respects --even though Pakistan's GNP per capita is above the average for low-income economies (US$460 versus US$430, in 1995). Its infant mortality rate, in particular, appears to be about 60 percent higher than for low-income economies including China and India, or about 15 percent higher if these two countries are excluded (Table 2.1.). Its under-five mortality rate is estimated to be about 36 percent higher than the average for low-income economies including India and China, although it is on a par with the average when these two countries are excluded Pakistan's total fertility rate exceeds the average for low-income economies including India and China by a wide margin --50 to 75 percent, depending on whether we take the lower figure for Pakistan of TFR=5.4, or the 2 higher figure of TFR=6.3. The burden that this high fertility places on mothers is reflected in a maternal mortality rate of roughly per 100,000 births. 3 By comparison, the maternal mortality rate is less than 10 per 100,000 births in most industrial countries and less than 100 in Sri Lanka, a low-income country with a good primary care system. 1/ The total fertility rate measures the average number of children that would be born to a woman who has completed her reproductive cycle, given current patterns of age-specific fertility. 2/ The higher figure of 6.3 is derived from the 1991 PIHS, while the lower figure of 5.4 is derived from the 1991 Demographic and Health Survey. 3/ Maternal mortality rates are difficult to estimate. The most recent estimate for Pakistan is 340 maternal deaths per 100,000 births, derived using a model based on the general fertility rate and the proportion of births assisted by persons trained in midwifery skills.

26 -4- Table 2.1 _ Pakistan -Trends in Selected Health and Fertility Indicators and Com arison with Average of Low-income Economies Pakistan Avge. of Low Avge. of Low Income ] Income Economies Economies Excluding I dia and China A. Infant Mortality: (Per thousand live births) Pakistan, 1970 (WDR 1995) 142 Pakistan, (PIHS 1991) 131 Pakistan, (PIHS 1995/ Boys 105 -Girls I 97 Average of Low-income Economie 1993 (WDR 1995) B. Under-Five Mortality: (Per thousand live births) Pakistan, (PIHS 1991)_ 140 Average of Low-income Economies, 1993 (W R 1995) C. Life Expectancy at Birth, Female: (Years) I I I Pakistan, 1970 (WDR 1995) 1 49 Average of Low-income Economies, 1970 (WDR) Pakistan, 1993 (WDR 1995) I _ 63 Average of Low-Income Economie, 1993 (W R 1995) I I D. Life Expectancy at Birth, Male _._... (Years) I I I Pakistan, 1970 (WDR 1995) 50 Average of Low-income Economies, 1970 (WDR 1995) Pakistan, 1993 (WDR 1995) 61 Average of Low-income Economie s,1 993 (WDR 1995) E. Under-Nutrition: Pakistan, Percentage of Low-Birth Weight Babies, 1991 (Demographic and Health Surey, 1991) 30% Pakistan, Percentage of Children Age 5 and Younger With Protein-Energy Malnutrition, 1991 (Demographic and Hea th Survey, 1991) 50% I.. F. Total Fertility Rate: Pakistan, 1970 (WDR 1995) 7 Pakistan, (PIHS 1991) 6.3 Pakistan, (Demographic and Health Survey 1991) Average of Low-Income Economies, 1993 (WDR 1995) Notes: "Low-Income Economies" are all those economies classified as such by the World Bank; in 1993,1 heir weighted-average GNP per capita was US$380 (US$300 excluding China and India). Pakistan, with a GNP per capita of US$430 in 1993, was classified as a low-incom economy.

27 Undernutrition among infants, young children, and women of childbearing age is also a major health concern. The 1991 Demographic and Health Survey estimated that about half of children age 5 and younger showed evidence of undernutrition (they were stunted, wasted, or underweight), and that some 35 percent of pregnant and lactating women were underweight. About 30 percent of children had low weight at birth. These nutrition indicators are worse in Pakistan than in many countries with comparable income levels. Micronutrient deficiencies of iron, iodine and Vitamin A are also widespread. Such deficiencies have serious implications for health. Iron deficiency anemia increases the risk of death related to childbirth; Vitamin A deficiency can lead to blindness; iodine deficiency increases the risk of neonatal death and also leads to mental retardation Another way of looking at the health status of a country is to estimate its total Burden of Disease (BOD). The BOD is an aggregate measure of the years of healthy life lost by a population due to all episodes of disease and injury occurring in a given year. Preliminary estimates of Pakistan's BOD conducted for this note suggest that the BOD in Pakistan, standardized by population size, is about three times the average figure for established market economies. Comparisons with other low-income countries indicate a mixed picture: Pakistan's BOD is lower than that of Sub-Saharan Africa and about the same as in India, but much higher than in China. The composition of Pakistan's BOD indicates that about 50 percent of the disease burden is accounted for by communicable diseases and maternal and perinatal conditions To summarize this brief discussion of health indicators, it can be said that the health status of Pakistan's population remains poor. This is true even by comparison with average low-income country indicators. Improvements have occurred in the past three decades, but the pace of improvement has not been satisfactory. Factors Behind Poor Health 2.07 The factors behind poor health status in Pakistan are many. The most inmportant are: (a) Poverty. Pakistan has had good growth for several decades, but is still a poor country. The most recent estimates of consumption poverty indicate that in 1990/91 about 34 percent of the population had levels of consumption below a poverty line of about Rs. 300 per capita per month at prices of that gear (US$12 equivalent at the then prevailing official exchange rate). Poverty negatively affects health status through constraining the ability of households to purchase various health-related services and goods. (b) Education. Pakistan has lagged behind badly in terms of educating its population, and this is more so with regard to women. Lack of education results in poorly educated consumers of health services and constrains the adoption of key disease-prevention behavior. Pakistan is 4/ Pakistan's BOD is further discussed in Chapter III. A detailed disaggregation of our BOD estimates is given in Annex 3. 5/ See Pakistan Poverty Assessment, World Bank, September 1995.

28 now making a major effort to upgrade the educational status of its population, and especially of women, under the Social Action Program. (c) The low status of women. In addition to their extremely low levels of education, women in Pakistan are constrained in seeking health care for themselves and their children on account of their restricted mobility. In many rural areas, women are not permitted to leave the house or village and are subject to severe restrictions in their interactions with any males from outside their immediate family and communities. In recent years, under the Social Action Program, the government has started to address this problem through the development of community-based health care services with female workers. (d) Inadequate sanitation and water supplies. The large burden of infectious disease in Pakistan is closely related to lack of adequate sanitation facilities and safe sources of potable water for many households. It is estimated that, at present, only about 55 percent of rural households have access to safe water; about one-fourth have 6 sanitation facilities. Improving access to safe water and sanitation facilities is another area of focus under the Social Action Program. (e) The poor quality of health services. Both government and private health services suffer from serious quality deficiencies, as discussed in the remaining chapters The improvement in health status in the past 2-3 decades (para. 2.01) is probably accounted for by progress in some of the factors identified in the previous paragraph. It is clear, for example, that consumption poverty has declined since the early 1970s. Education levels have also been improving, albeit slowly. There has been some progress in terms of access to safe sources of water and availability of sanitation facilities. And the access to health services in rural areas has improved, with the establishment of an extensive network of government rural health facilities and some outreach services since Private health services have been expanding too, although they continue to be located mostly in urban areas. B. Recent Government Health Expenditure Trends 2.09 Total government expenditure on health as a percentage of GDP declined between 1991/92 and 1997/98, from 0.76 to 0.71 percent of GDP (or from 0.82 to 0.78 percent of GDP if expenditure on the population welfare program is added; Table 1, Annex 5). The percentage of total government health expenditure in relation to GDP in Pakistan is very low by Asian standards; a study of twelve Asian countries in the late 1980s estimated the mean of this percentage at 1.3 percent.8 6/ Report of the Chief Ministers' Committee on SAPP II, Planning and Development Division, Islamabad, September / For a discussion of this point, see Pakistan Poverty Assessment, World Bank, September / See Health Care in Asia, by Charles C. Griffin, World Bank, The twelve countries in the study were Bangladesh, China, India, Indonesia, Korea, Malaysia, Myanmar, Nepal, Papua New Guinea, Philippines, Sri Lanka and Thailand.

29 The share of the Federal Ministry of Health in total government health expenditure (federal plus provincial/area expenditure combined) has increased over the period, from 14 percent in 1991/92 to 17 percent in 1997/98. The main reason for this increase was the introduction of the federally-funded Prime Minister's Program for Family Planning and Primary Health Care, to provide community-outreach health care and family planning services; this program now accounts for about 6 percent of total government health expenditure on health In absolute terms, total government health expenditure more than doubled during the period, from Rs. 9,233 million in 1991/92 to Rs. 20,943 million in 1997/98 (Table 1, Annex 5). However, there was considerable inflation in the period. Comparison between 1991/92 and 1997/98 shows an increase of 19 percent in real terms over the entire seven-year period (Table 2, Annex 5). On a per capita basis, and again in real terms, government health expenditure remained approximately constant over the period It is also important to examine the evolution of (government) health expenditure in relation to total public expenditure for each of the four provinces. The picture that emerges is far from uniform (Table 3, Annex 5). In Balochistan, there was a clear upward trend in the percentage of total provincial expenditure allocated to health, from 5.7 percent in 1991/92 to 8.2 percent in 1997/98. The trend has also been up in Punjab, from 7.4 percent in 1991/92 to 7.8 percent in 1996/97 and 8.8 percent in 1997/98, although it has not been as sustained as in Balochistan. In NWFP, there was an upward trend through 1996/97, from 7.6 percent to 8.7 percent. However, this trend has been sharply reversed in 1997/98 (7.4 percent). In Sindh, on the other hand, there has been a clear downward trend, from 8.5 percent in 1991/92 to 6.5 percent in 1996/97 and 7.0 percent in 1997/98. C. Health and the Social Action Program 2.13 In the early 1990s, awareness about Pakistan's poor performance in the social sectors became more acute. A major outcome of this increased awareness was the launching by the Government in 1993/94 of the Social Action Program (SAP). The SAP aims at improving the access to and quality of basic social services in four sectors: primary education, primary health, rural water supply and sanitation, and population welfare. The SAP is supported by several donors, including IDA For the purposes of SAP, primary health care was defined as including basic services provided at the community level, at first-level care facilities (Basic Health Units, Urban Health Units, Rural Health Centers, Maternal and Child Health Centers, Dispensaries), some Tehsil Headquarters Hospital services, all preventive programs, the training of paramedicals, and district management functions. Population welfare was defined as the provision of family planning services and related information, education and communication activities. (Starting in 1997/98, the definition of what constitutes the SAP part of health services has been expanded to include the first level of referral) In the primary health care/population welfare sectors, SAP sought to achieve two broad objectives: (a) To increase the real level of government expenditure, with special emphasis on non-salary inputs (which is needed to improve quality); and

30 - 8 - (b) To improve program design and strengthen implementation capacity in the sectors. The two broad objectives are complementary. Achieving the objectives would lead to an expansion in coverage and use of basic health/population services as well as an improvement in service quality and impact. Increased Expenditure 2.16 SAP has been successful in increasing the priority given to primary health care within the overall government health sector. Nationwide, SAP health expenditure as a proportion of total government health expenditure rose from 40 percent in 1993/94 to an average of 50 percent in the period 1994/ /97 (Table 4, Annex 5). In 1997/98, budget allocations for SAP health expenditures amount to 58 percent of total government health expenditure. However, the 1997/98 figures are not strictly comparable with previous years' figures because of the expansion in the definition of "SAP Health" (para above). If the first level of referral had been excluded from SAP health expenditures in 1997/98, the proportion of SAP to total health expenditure in 1997/98 would have been about 55 percent The increase in the proportion of SAP health expenditure has been much less pronounced for current than for development expenditures. This is what one would expect; whenever there is a shift in public expenditure priorities in any sector, it would initially be reflected more strongly in the development budget than in the current budget In absolute terms and in constant prices, nationwide SAP health expenditure was about 35 percent higher in the 1994/ /97 period as compared with 1993/94, and it would be about 60 percent higher in 1997/98 than in 1993/94 if SAP budgeted expenditure is fully executed(table 4, Annex 5) SAP has also been successful in raising the level of expenditure in the program of the Ministry of Population Welfare. Expenditure increased by about 30 percent in real terms between 1993/94 and 1996/97, and would be about two-thirds higher in 1997/98 relative to 1993/94 if budgeted expenditure in 1997/98 is fully executed SAP has been less successful in achieving another important objective it set for itself in the health sector, namely, to increase the priority given to the non-salary budget within the total current budget. Overall, the ratio of non-salary to total current budget (within the SAP subsector) was the same (0.30) in 1996/97 as in 1993/94, and is projected at the same level in 1997/98(Table 5, Annex 5). The evolution of the ratio varies across provinces and areas, however. The data show increases in the ratio between 1993/94 and 1996/97 for the Northern Areas (from 0.14 to 0.30), Azad Jammu and Kashmir (from 0.25 to 0.34), FATA (from 0.11 to 0.24), and Punjab (from 0.28 to 0.32); while it shows declines for Sindh (from 0.23 to 0.21), NWFP (from 0.43 to 0.30), and Balochistan (from 0.39 to 0.35) In absolute terms, and measured in constant prices, non-salary current expenditure in the SAP health sector was 29 percent higher in 1996/97 as compared with 1993/94(Table 4, Annex 5). In 1997/98 it would be 45 percent higher than in 1993/94, as per budget estimates and projected inflation rate.

31 -9- Programmatic Improvements 2.22 Policy and institutional reforms to improve health/population programs during the first phase of SAP focussed on seven areas: (i) strengthening of planning capacity, (ii) strengthening of in-service training capacity, (iii) decentralization of administrative and financial powers, (iv) reduction of gender imbalances in staffing, (v) introduction of communitybased services, (vi) expansion of DOHs' participation in the population program, and (vii) reorganization of primary health care services. A brief review of the main accomplishments is given below Strengthening of Planning Capacity. Some progress has been achieved in this area. Planning Cells have been established in all provincial Departments of Health, and these cells have played a key role in the preparation of the annual operational plans under SAP. Situation analysis reports have been produced in each province. Mapping of health facilities has been carried out. Progress has been made in expanding the coverage of the health management information system (HMIS), although substantial gaps remain. A first attempt at formulating health sector strategies has been made in connection with the preparation of the second phase of SAP. District-level planning has started on a pilot basis. At the same time, it is clear that the Planning Cells need to be enlarged and strengthened in order to be able to cope adequately with the many demands made on them --including those made by donors. It is also necessary to achieve a closer integration between the work of the Planning Cells, which are housed in the Secretary's office, and the planning work in the rest of the DOH's organization Strengthening of In-Service Training Capacity. During SAPP I, a culture of in-service training of primary health care staff and their supervisors was established. Now in-service training is a regular feature in all provinces, both for development of technical skills and management skills. Fifty-five in-service training schools have been established all over the country. However, much work is still needed in order to improve quality of training Decentralization of Administrative and Financial Powers. This area of reform seeks to improve decision making by delegating certain administrative (mainly personnel management) and financial powers to managers at the district and rural health facility level (BHUs, RHCs). Progress so far has been uneven across provinces, with Punjab and Sindh ahead of the two smaller provinces. All provinces have developed proposals but implementation is just starting. Some managers appear to be reluctant to use their newly acquired powers because they fear possible adverse consequences for themselves. Moreover, the decentralization measures envisaged and taken so far are modest; more radical decentralization alternatives may need to be considered to make a major impact on the efficiency of operations Reduction of Gender Staffing Imbalances. This area of reform seeks to increase the numbers of female health care providers in order to improve access to services by women and their children. Female health care providers mainly include female doctors, lady health visitors (LHVs), lady health workers (LHWs), and traditional birth attendants (TBAs). A number of initiatives have been taken, especially to improve front-line care. Training 9/ Issues of excessive centralization of management in the health sector and alternatives for decentralization are discussed in Chapter IV.

32 capacity for LHVs has been increased. This has been complemented by various measures to facilitate recruitment of students, including relaxation of age requirements, allowing married women to enroll, enhancing stipends, and, in Balochistan, through an innovative scheme whereby high school girls are identified and supported with stipends as future paramedical trainees. As a result of the above actions, there has been an increase of about 30 percent in the number of students enrolled in LHV schools at present as compared with 1993/94.10 Several thousand TBAs have been given training. The provinces also introduced additional incentives for female paramedics (e.g., better career paths) in order to increase retention of these workers in government service. Some special incentives have been introduced for female paramedics serving in rural areas, but serious recruitment difficulties remain in many of these areas. Recruitment of fema:le paramedics (and other staff) has also been hampered during the first phase of SAP by extended recruitment bans. In Punjab, following the lifting of the recruitment ban, about 700 female paramedics and 350 female medical officers have been recently recruited. But the main development in terms of increasing the numbers of female health workers in recent years has been the introduction of the Prime Minister's Program for Family Planning and Primary Health Care (see next paragraph) Introduction of Community-Based Services. The main development towards increasing the numbers of front-line female health care providers during the first phase of SAP has been the introduction in 1994 of the new cadre of LHWs. Forty-three thousand LHWs have been trained and deployed so far, and preliminary results appear promising. LHWs are women recruited from the communities where they serve; as such, they provide a vital link between these communities and the rest of the government health services Expansion of DOHs' Participation in the Population Program. Family planning services in Pakistan have been notoriously weak. One of the key reforms envisaged for the first phase of SAP was the expansion of the number of provincial/area health facilities providing family planning services (i.e., in addition to those in the Ministry of Population Welfare program). In 1993/94, the first year of the Eighth Five year Plan, it was estimated that about 4,000 health outlets of provincial line departments were providing family planning services; the target in the Eighth Plan was to expand this number to 6,000 by the end of 1994/95, and to over 7,000 by the end of the plan (June 1998).11 Since there are currently about 11,000 government health 12 facilities nationwide', the target of 7,000 implies that roughly about twothirds of all government health facilities would offer family planning services by June According to the estimates of the provincial Population Welfare Departments (PWDs), the proportion of health facilities providing family planning services as of early 1997 was 60 percent in Punjab, 72 percent in Sindh, 50 percent in NWFP, and 82 percent in Balochistan. A health facility 10/ SAP Sector Statistics 1992/ /98, Multi Donor Support Unit, Islamabad, July / Staff Appraisal Report of the Population Welfare Program Project, Report No PAK, World Bank, February 1995, p / Including hospitals, dispensaries, basic health units, maternity and child health centers, and rural health centers. See Statistical Supplement of the Pakistan Economic Survey 1994/95, p. 302.

33 is considered by the PWDs to be providing family planning services if it has a staff member trained in family planning methods and keeps contraceptives in stock. Recent HMIS data, however, indicate that the proportion of reporting (first-level care) facilities which reported having actually provided family planning services in the respective quarter was only 28 percent in Sindh and 16 percent in Balochistan; for Punjab it was 50 percent (in NWFP, the HMIS system is not yet operational). This suggests that, in Sindh and Balochistan especially, there are many facilities that meet the PWD definition for providing family planning services but either do not have any family planning clients or are failing to report their family planning activities. This issue requires further investigation. In all four provinces, a monitoring system that would enable to assess the quality of family planning services provided is not available Access to family planning services has been significantly enhanced in recent years through the deployment of community-based workers. The number of Village-Based Family Planning Workers (a cadre of the vertical Population Welfare program) increased from a few hundred at the beginning of SAP to about 6,750 by the end of Moreover, the 43,000 LHWs deployed since 1994 have family planning among their duties. There are indications that these efforts are already resulting in greater awareness and demand for family planning. In Pakistan's environment, where the mobility of women is severely restricted in many rural areas, these community-based approaches are a key element of the overall strategy to provide family planning and other health care for mothers and their children Reorganization of Primary Health Care Services. Several initiatives were envisaged for the first phase of SAP that aimed at reorganizing primary health care services in order to make them more efficient. An important one was the formulation of Essential Drug Lists (EDLs) for the various types of health care facilities. The EDLs have been formulated, and procurement is now generally based on these lists. However, health facilities can still order drugs which are not in the lists, which reduces the efficiency gains from using the lists A second reform that had been envisaged was the integration of certain vertical categories of workers into the general work program of the Departments of Health. The categories in question are malaria workers and vaccinators in the EPI program (and their supervisors). The basic idea was to phase out the use of unipurpose outreach workers, and have instead a larger number of multipurpose outreach workers. Each worker would cover a defined territory within the catchment area of each first-level care facility. Progress has been very limited. Punjab and Balochistan have completed the corresponding background study and developed proposals for integration. The remaining provinces have not carried out their background studies A third reform envisaged was the development of systematic linkages between community-level health care providers (TBAs and LHWs) and first-level care facilities (BHUs, dispensaries and RHCs); as well as between first-level care facilities and first-referral facilities. The objective is to be able to provide better integrated and more effective primary care services, from the community level up to and including the first level of referral. Sindh and NWFP have made progress in this direction. In both provinces, selected areas have been identified to pilot a new, better integrated and better resourced model of primary care services, known as the

34 "area focus approach"." 3 In Sindh, the DOH has selected one RHC from each of the 21 districts, which will be the nucleus of a unit of primary care services, also comprising 4-5 surrounding BHUs/MCH centers and all of the LHWs and trained TBAs in the area. In addition to developing systematic linkages, the pilot includes in-service training to develop staff skills; ensuring the full staffing of the facilities in the pilot area; ensuring that the facilities are in good shape with regard to buildings and equipment; and establishing a monitoring system to track progress. Work on various aspects of the pilot has started. A similar pilot project has been started in NWFP All four provinces had undertaken to carry out studies of the referral system. The studies have been completed in Punjab, Sindh and Balochistan. Improvement of the referral system is expected to be one of the areas of reform during the second phase of the Social Action Program. 13/ These pilot efforts are part of the IDA-assisted Family Health Project.

35 13 CHAPTER III: SETTING PRIORITIES FOR GOVERNMENT FINANCING IN HEALTH A. The Current Burden of Disease 3.01 Background work for the preparation of this report included a study of the Burden of Disease (BOD). While this study faced serious data limitations, it should give a reasonably accurate picture of the total magnitude and distribution of the BOD in Pakistan BOD studies measure the losses of healthy life in the form of disability and premature death, due to all episodes of disease and injuries occurring in a given year. The total BOD in Pakistan in the early 1990s was about 350 disability-adjusted life years (DALYs) per 1,000 population per year. This is lower than the corresponding figure for Sub-Saharan Africa of 575 DALYs per 1,000 population in 1990 and about the same as India (344/1,000), but much higher than China (178/1,000). It is about three times the figure for established market economies (117/1,000)2 The distribution of Pakistan's BOD among broad categories of disease/injuries is given in Table 3.1 below As can be seen from the table, 50 percent of the disease burden in Pakistan is still accounted for by communicable diseases (38.4 percent) and maternal and perinatal conditions (12.5 percent). These are the categories for which medical science has been most successful in identifying or developing effective and affordable prevention and treatment interventions, which generally require only modest levels of skills and resources. Dramatic improvements in health status could be achieved in Pakistan if such interventions were more widely applied. The main ones include standard public health measures such as health and nutrition education, provision of clean water and sanitation; immunization; and maternal and child health care programs consisting of family planning, pre- and post-natal care, deliveries by trained health personnel, and management of the sick child (especially for diarrhea, acute respiratory infections and malnutrition) Cardiovascular diseases account for another 10 percent of the total BOD. These diseases are less easily treatable; the most promising approach would be health education campaigns to prevent their onset. Antismoking campaigns and nutrition education to promote a healthier diet would be the main types of health education aimed at preventing cardiovascular disease Also important are injuries, which account for about 11 percent of the total BOD. Their incidence could be reduced through public education programs on accident prevention, better work safety requirements, better automobile safety requirements, and other similar preventive measures. 1/ This is the first time that such estimates are made for Pakistan. For a detailed explanation of the concept of Burden of Disease, see the 1993 World Development Report, Investing in Health, World Bank. 2/ World Development Report 1993, World Bank, page 27. 3/ See Annex 3 for a more detailed disaggregation and explanation of data sources and limitations.

36 _ Table 3.1. Pakistan - Distribution by Cause of the Burden of Disease In Percentages of the Total Number of DALYs Lost in a Given Year (Early 1990s) Communicable Diseases 38.4% -Infectious and Parasitic (20.4%) -Respiratory Infections ( 8.1%) -Childhood Cluster ( 6.7%) -Sexually Transmitted ( 2.2%) -Tropical Cluster ( 1.0%) Non-Communicable Diseases 37.7% -Cardiovascular -Nutritional/Endocrine (10.0%) ( 5.8%) -Malignant Neoplasms ( 4.3%) -Congenital Abnorma:Lities ( 3.5%) -Digestive System ( 3.4%) -Chronic Respiratory ( 3.2%) -Neuro-psychiatric ( 2.6%) -Other Non-communicable ( 4.9%) Maternal and Perinatal Conditions 12.5% -Maternal ( 2.8%) -Perinatal ( 9.7%) Injuries 11.4% Total % Source: World Bank estimates. Notes: Infectious and parasitic diseases include tuberculosis, diarrheal diseases, meningitis, hepatitis, leprosy, trachoma, intestinal helminths, malaria, and other miscellaneous diseases. The childhood cluster includes measles, pertussis (whooping cough), polio, diptheria and tetanus. The nutritional/endocrine category includes anemia, protein-energy malnutrition, iodine deficiency and Vitamin A deficiency. B. The Health Delivery System 3.06 The health delivery system in Pakistan is a mix of public and private providers. Provincial, Federal and some local governments operate tertiary care hospitals in the larger urban areas. In rural areas and smaller towns, the Provincial governments (and the governments of FANA, AJK, ICT and FATA) operate an extensive infrastructure of first-care facilities and secondary care hospitals, supported by several federal programs including the community-based Lady Health Workers' program. Local governments and NGOs play only a modest role in the provision of primary health care in both urban and rural areas. The Government is by far the major provider of hospital services in rural areas, and it is also the main provider of preventive care throughout the country. The Ministry of Population Welfare operates its own network of family welfare centers for the provision of family planning services.

37 -15- Government Health Services 3.07 The public (i.e., government) health delivery system is composed of four tiers: (i) outreach and community-based activities, which focus on immunization, sanitation, malaria control and maternal and child health and family planning; (ii) primary care facilities, mainly for outpatient care; (iii) tehsil (i.e., subdistrict) and district headquarters hospitals for basic inpatient care and also outpatient care; and (iv) tertiary care hospitals located in the major cities for more specialized inpatient care. Primary care facilities are mostly managed by a Medical Officer, except for Maternity and Child Health Centers, which are managed by a Lady Health Visitor (LHV), and dispensaries, which are generally managed by dispensers Basic Health Units (BHUs) provide curative and preventive services for a catchment population of about 10,000-20,000 people, and are typically staffed by a Medical Officer, a LHV or Female Medical Technician, a Male Health Technician, a trained Midwife or unqualified midwife (dai), a dispenser, a sanitary inspector, a vaccinator and 2-3 nontechnical staff (guard, sweeper, etc). Rural Health Centers (RHCs) provide more extensive outpatient services and some inpatient services, usually limited to short term observation and treatment of patients who are not expected to require transfer to a higher-level facility. They serve catchment populations of about 25,000-50,000 people, with about 30 staff including several doctors and a number of paramedical staff. They typically have beds, x-ray facilities, laboratory, and minor surgery facilities. Tehsil Headquarters Hospitals provide basic inpatient services as well as outpatient services. They serve a catchment population of about 100, ,000 people. They typically have beds and appropriate support services including x-ray, laboratory and surgery facilities. Its staff may include several specialists such as ear, nose and throat specialist, ophtalmologist, gynecologist, and a general surgeon. District Headquarters Hospitals serve catchment populations of about 1 to 2 million people and provide a range of specialist care in addition to basic hospital and outpatient services. They typically have about beds. In NWFP and Balochistan, catchment populations and sizes of tehsil and district headquarters hospitals are smaller The District Health Officer (DHO) is responsible for all health services in his district. Managers of all Tehsil Headquarters Hospitals and first-level care facilities report to him. District Headquarters Hospitals are headed by Civil Surgeons, who, as well as DHOs, report to the Director General of Health at the provincial level. Tertiary care hospitals are directly under the provincial Secretary of Health. Private Health Services 3.10 The private health services sector is dominated by more than 20,000 "clinics", the small, office-based practices of general practitioners. Other private sector facilities also tend to be small. These include more than 300 maternal and child health centers (also known as maternity homes); about 350 dispensaries, which are outpatient primary health care facilities; and more than 450 small to medium-size diagnostic laboratories. There are also more than 500 small and medium-size private hospitals with about 30 beds per hospital on average. They are equipped only for basic surgical, obstetric, and diagnostic procedures, and concentrate on low-risk care. In

38 -16- addition, there are a few large private hospitals, mainly run by NGOs and located in major cities Private health services are concentrated in urban areas. Only about 30 percent of all private health facilities (mostly clinics and dispensaries) are located in the rural areas, where about 70 percent of the population reside. Private urban hospitals are mostly concentrated in nine large cities. 5 These cities account for more than 75 percent of private sector hospital beds The quality of care in large private hospitals ranges from reasonable to good. In smaller commercial hospitals, MCH centers, and clinics, however, the quality of service is often very poor. This poor quality is reflected for example in the use of outdated equipment, and in the severe shortage of nurses and paramedical staff and the use of untrained persons in their stead. Less than half of the doctors, nurses and paramedics working in the private sector are registered in the official registers of these professions; the rest either have no formal training or have failed to register (or allowed their registration to lapse). The private sector staff mix is highly skewed; about 40 percent of the technical work force are doctors, but less than 10 percent are nurses Another very important segment of the private health care sector are pharmacies and other (non-pharmacy) retail outlets selling pharmaceuticals, such as grocery shops. In the late 1980s, there were about 11,000 pharmacies nationwide, of which only 19 percent were in rural areas. Rural areas are served mainly by non-pharmacy retail outlets. Those running these retail outlets have no training in pharmacology; in addition, they often engage in the practice of medicine (as is shown by survey data). Powerful antibiotics and other drugs are thus freely available over the counter, without the need for a prescription from a qualified medical doctor In addition to shop owners, many others practice medicine in Pakistan with little or no training. Casual observation (e.g., during the field visits conducted for this report) suggests that, in many rural localities, the number of untrained "doctors" practicing medicine greatly exceeds that of trained physicians. Traditional or informal sector providers also dominate in the area of reproductive health, with only about 20 percent of women being assisted by an appropriately trained provider during delivery. To improve on the latter situation, a program is in place to train traditional birth attendants in clean delivery, referral of complications, nutrition and breastfeeding counselling. In the last two years, 3,500 traditional birth attendants have been so trained, with a target of having one trained traditional birth attendant for each village in the country There has been no survey of NGOs working in the health sector in Pakistan. However, the predominant view appears to be that: (i) the number of NGOs operating in the health sector is small; (ii) most of them are very small 4/ Pakistan Health Sector Study, World Bank, June The figures quoted in this section are from the Census of Health Facilities conducted by the Federal Bureau of Statistics in Current numbers of private facilities are probably much larger than indicated here. 5/ Abbotabad, Faisalabad, Hyderabad, Karachi, Lahore, Multan, Peshawar, Quetta, and Rawalpindi/Islamabad.

39 -17- in size, and (iii) they are heavily concentrated in urban areas. A notable exception to (iii) is the Aga Khan Health Services program, which has been successful in implementing its community-oriented primary health care model in two districts of the Northern Areas. As is the case with NGOs in general, many of the NGOs in the health sector are the product of a visionary and committed individual and lack a broad institutional base. There has been so far little government assistance to them, although a start has been made under the SAP's Participatory Development Program. Preventive Services C. Health Services Coverage and Utilization 3.16 The main preventive programs in Pakistan include: (i) immunization; (ii) maternal and child health services; (iii) family planning; and (iv) the Lady Health Workers program (officially known as the Prime Minister's Program for Family Planning and Primary Health Care). Although the situation has improved in recent years, preventive services have had a low priority in Pakistan. An indication of this low priority is the fact that recurrent expenditures of preventive services are financed to a large extent from the Development budget rather than the Current budget Immunization Program. The expanded program of immunization (EPI) includes vaccination for young children against measles, diphteria, pertussis, tetanus, polio and tuberculosis. It also includes vaccination against tetanus for pregnant women. Vaccination in the public sector is provided through a combination of vaccination in static health facilities and outreach vaccinators (operating out of static facilities or in mobile teams). The most recent comprehensive estimates of immunization coverage for children are from the 1995/96 PIHS. Nationwide, according to this survey, 78 percent of children 5 years and younger have had at least one immunization (up from 70 percent in 1991, i.e., as compared with the 1991 PIHS). The percentage of children 5 years and younger who are fully immunized against the above listed six diseases was only 54 percent in 1995/96, however (up from 25 percent in 1991).6 Immunization coverage against tetanus toxoid of childbearing age women was only 14 percent in 1995 according to Ministry of Health estimates Maternal and Child Health Services. In addition to immunization, other preventive services for mothers and their children include prenatal care, supervised deliveries, growth monitoring, nutrition education, and health education (e.g., to teach mothers to recognize serious common diseases in young children). The government health sector still gives maternal and child health services much less priority than they deserve. Of 134 rural health facilities sampled in the 1995/96 PIHS, one-third did not have any female staff --a precondition for provision of effective maternal and child health services. An earlier, 1993 survey of 89 randomly selected rural health 6/This figure refers to the number of children who reported having received full immunization and who also have an immunization card, expressed as a percentage of all children aged 5 years and under. See the report from the Pakistan Integrated Household Survey, Round 1: 1995/96, Federal Bureau of Statistics, Islamabad, October / Situation Analysis of Health Sector in Pakistan, Ministry of Health, Islamabad, December 1995, page 41.

40 18 facilities nationwide showed that, among other findings: (a) only 8 out of 89 facilities were doing growth monitoring of children; (b) nutrition education and demonstration sessions were reported in only 10 facilities; (c) 34 facilities were not providing any maternal and child services because of non appointment of a Lady Health Visitor; and (d) only 33 facilities maintained records of providing antenatal care Family Planning. The government health sector has also failed to make family planning services widely available. As noted above, many rural health facilities do not have any female staff, which is a precondition for provision of family planning services. And the proportion of health facilities not yet providing family planning services is still high (para. 2.29). Recent surveys also suggest considerable unmet demand for family planning; in 1994/95, fifty-two percent of all women of reproductive age desired no more births (up from 39.9 percent in 1990/91), but only 17.8 percent were using a method of contraception (up from 11.8 percent in 1990/91).9 Availability of family planning services has improved in recent years with the deployment of the Lady Health Workers (see below). The Government of Pakistan is a signatory of the Cairo Declaration which followed the International Conference on Population and Development (ICPD) of The ICPD program of action aims to ensure that all couples and individuals have access to an appropriate range of services to protect reproductive health. In line with its commitment to implement the ICPD program of action, the Government is in the process of planning and implementing a number of reforms (see Box No. 1) The Lady Health Workers Program. This is a recent Federal program for the deployment of community-based female health workers in villages and selected urban areas. Up to the end of ,000 LHWs had been deployed, with a final target of 100,000 (each LHW covers a population of ). The LHWs are recruited from the communities where they provide services. Services are mostly preventive, and they include health and nutrition education, health monitoring, referrals and family planning. Most of the services are focussed on women and young children. The LHW program has been very valuable in extending coverage of preventive services. Because the LHWs are from the communities where they work, and because they are women, they are able to have close interaction with the women in the community, and through them reach the children as well. Preliminary indications are that the program is working well and is appreciated by the beneficiaries. Curative Services 3.21 Curative services include both outpatient and hospital inpatient services. The provincial governments have developed an extensive infrastructure of health facilities providing curative services (and, to a limited extent, preventive services as well) in both urban and rural areas. According to the 1995/96 PIHS, for Pakistan as a whole, 34 percent of all rural communities surveyed had access to a government dispensary within a radius of 5 km; 39 percent had access to a BHU within the same radius. This suggests that the majority of these communities had access to at least one 8/ Utilization of Rural Basic Health Services in Pakistan, Ministry of Health and WHO, Islamabad, / 1994/95 Pakistan Contraceptive Prevalence Survey, Population Council, Islamabad.

41 -19- first-level care facility within a radius of 5 km. Moreover, 42 percent of all rural communities surveyed had access to a government hospital within a 10 'km radius.10 M*ovng w a r tiv th Approach '-'''.''.' lthough'..-the' min: rep'ibility :'for''' cinia f"'ami'y pannin serice-'..in h.-.i-'-. Pa ' a ha` htrica b fen-asigned tog " e init.t o -h'.,'., p the r nci '- 3 De'arten " lth: av e' ee. incresing t.h..-- '.,... * partici~~~~~~~;pat;on: fa'"',:,'..,lan intis: area. They. have_: now ma"th.,.de':: a comitmen to6 of fer family pl.anning :evce :nall: of: their :facilitie asso a osble an"":.-..''", t':.- gr'.-adually',,-' move: towards o-f,feringi.'- an'' appropriatei range :-f :::-:- r oductie he-alt evies throughout t-'he- cuntry:'.-''' or-.the Nh ''F i':e :Yeara kln 198-2a 1: te ff'overnment hssta,,'..im"pro'e r:prohealt -increa'se' contae ptive- p' reva"'e..-''':(-.'i{'parti,cuary ea:rlieriuse. of modern'. temp'.ra'y method, ::and t'hus:.,grtadua.ll t :rede he.rat of population growth.', his-wi r e'iri ' clse col[a.orat -ou etween the public non-g ver asectr, enta o- r aniao, a,d.', '--the p-rivate sector.; 'Key strategesi to be:pursued' inen :h -- * Ensuring a- continuous supply of c ntractv a al bi senctr e -iv ery pn ts, as well' as essential,, dr-ug forth'et m:t',eatment o ',,:',',sex u.ally ''trns'm.tt:4 i..nf'ectio'ns,-.an,dothe-r elat.e.d--supplies-.--.this''will -. --r.e.'qui're..e.nhan 'ce coperatdionpubetweentheministryofpoulatio Welf..-:n.d..th'e governm.ent healtubseric es, w'th,povincial ::'Departmenso '--.elthaking-incrased,- rspo sibi-lity for.ensu rng.tha:ts-upp ies'ar nunmaiunutained:- -- :.,.'..--*.:Rec-ruiting.and retain--t-ig g-qualifaiede-staff f:(particularly women-), in-:t-he. n'.,.',',-bter,s-,:qired fr widespead avilability of':services-.,'---.'' -.. * Ensuring that -th-e'-staff- are consistentl'y--o'n- duty, n htsrie.ar,e.-pr.,o.v.-ided.-in,.as aer.': ha shows esre.pec t for alcli e ts.' En':-ring that services o'ffere at the fir't. leel o '-erra.are..able' to-c,ter effectively forobstetric :emergencies:a. -reted.su gical..---ii.., 'pro'".'dures.-'-,,"'"' r'.tes: of ' ' ' -,'-.-.-i-l * Even st -ifectin othero ar low.at- presen, ensur n t-hat ap...ro'"",' priate opr''''-"'ograms- a're estabtishied-:to' reduce- -ke-y tran mssion among.. t arge.t groups....:.., stabishingappropriate-.linka:g-e betwee government ' traditiona midwiv's".and':practitiners,rao- e wpai eoura b.est c,... irove coll oration,:and:facilitap ro ents at.-- : ri'sk...,.:.:.-:' ,: ::. :- : :.- * iencraging -the ac.tiv.e involvement ofnon-governmentalorganizations ad' the p:tkriva'.,. treasetr esponsuringb thayt -fappropriatehminimum linical :.standards areestablished and maintained.i 3.22 While access to government health facilities is generally good, utilization levels are low. The previously quoted study by WHO/Ministry of Health found that, in the last working day preceding the survey, the average 10/ This pattern probably overesa the degree of access of the general population. Dispersed population, not residing in "rural communities" (essentially villages), would presumably have less access than suggested by PIHS figures.

42 -20- number of outpatients seen at a RHC was just 34; for BHUs, the corresponding figure was Information on numbers of patients was also collected from the sample of 40 facilities surveyed for a cost study carried out as background to this report. This is shown in Table 3.2 below. The low numbers of outpatient visits per doctor, combined with the low bed occupancy rates, are indicative of considerable unutilized capacity up to the District Headquarters Hospital level. Table 3.2. Pakistan - Utilization of Government Health Facilities, 1995/96 BHU RHC THQ DHQ Number of Facilities in Sample Outpatient Visits/Facility/Year 6,993 18,305 55, ,858 Outpatient Visits/Facility/Week ,072 2,574 Average Number of Doctors Outpatient Visits/Doctor/Week Inpatient Admissions/Facility/Year 295 1,172 2,460 Mean Bed Occupancy Rate 19% 35% 34% Source: World Bank cost study of health facilities. BHU = Basic Health Unit; RHC = Rural Health Center; THQ = Tehsil Headquarters Hospital; DHQ = District Headquarters Hospital. Outpatient visits reported above are for curative services only Household survey data indicate that most people seek care from private providers when they fall ill (at least for first outpatient consultation). Table 3.3 below shows the distribution of first consultations by type of provider resulting from the 1991 PIHS. As can be seen from the table, nationwide, just 21 percent of first consultations were with government providers, mostly hospitals (there were, however, important differences among provinces; the percentage of patients using government facilities ranged from a low of 16 percent in Punjab to a high of 38 percent in Balochistan). The largest group, at 46 percent, reported seeing private doctors. It is likely, however, that a significant proportion among this group are not actually seeing trained medical doctors. In Pakistan, because of weak medical practitioner regulation, there are many individuals in the private sector who pass themselves off as "doctors" but who have received in fact little or no medical training. Thus the figure shown in the table of 29.9 percent of first consultations taking place with untrained private providers is almost certainly an underestimate Tabulations from the 1995/96 PIHS show results similar to those obtained from the 1991 PIHS: a government health provider was consulted by 11/ Ministry of Health and WHO, Op. Cit, Islamabad, The sample size was 23 RHCs and 58 BHUs.

43 -21- only 20 percent of persons seeking health care for illness or injury in the 30 days preceding the survey There is, of course, nothing wrong with people using private health care providers, provided that they have the required training. This is in fact a good thing, since it releases fiscal resources that can then be allocated to other high-priority uses for which there are no private alternatives. But when a large proportion of the population are using untrained health care providers, that is not a good state of affairs. In many rural areas, trained private health care providers are not available. Thus, in theses areas it would be desirable to improve the quality of government health services to make them more attractive relative to untrained private providers. This could be complemented by efforts to educate people as health consumers and in particular to make them aware of the dangers of resorting to untrained health care providers The 1995/96 PIHS inquired about the reasons people had not to visit government facilities for treatment of illness or injury. The distriblution of responses was as follows: too far away, 33 percent; medicines not available, 20 percent; staff not cooperative, 11 percent; cannot treat complications, 8 percent; doctor not available, 7 percent; other, 21 percent. This pattern of responses suggests that in order to make government services more attractive to the public it would be necessary to take steps to improve outreach (as is indeed being done under the Lady Health Workers program); to reduce absenteeism and improve staff's attitudes towards patients (which is basically a matter of accountability, supervision and in-service training); to equip staff to better deal with complications themselves or to refer patients (a matter of improving staff training and developing the referral system); and to ensure that medicines are always available It can be concluded that there is clearly a great deal of room for improvement in utilization (and consequently efficiency) of government health facilities. There is capacity in the system to deliver services to much larger numbers of patients with the existing facilities and personnel, provided of course that personnel can be made to be present and perform their duties during the entire time they are obligated to do so by their terms of employment. There is also a large pool of potential users who are now seeing untrained private providers The extra cost of treating these additional patients in government facilities would be the incremental expenditure for drugs and supplies (plus the cost of deploying female paramedicals in those facilities presently lacking such staff) It is possible, however, that the compensation of staff in government health facilities may have to be raised if staff were effectively made to perform their duties as per their terms of employment. In economic terms, it is possible that the compensation of some doctors in government employment (and perhaps other cadres as well) may fall below the corresponding (private sector) opportunity cost. The reason is that these doctors would 12/ This survey also shows that 19 percent of those who fell ill or were injured in 1995/96 resorted to "self-care", i.e., did not consult a health provider of any kind. Without knowing more about the nature of the illnesses/injuries affecting this people, it is not possible to tell whether they should have seen a (trained) health care provider.

44 22 have to give up part of their income from private practice if forced to work a full workweek. Doctors who found themselves in such a situation (i.e., had their government compensation fall below opportunity cost) would resign from government employment. It should be noticed, however, that it is likely that (private sector) opportunity cost varies widely among doctors in government employment, depending on skills, initiative, contacts and other factors. Hence not all doctors would be in the above situation. What proportion would be, and would thus resign, is not known a priori. But if many did, then it would become necessary to increase compensation in order to retain sufficient numbers in government employment. Table Pakistan: Sources of Outpatient Health Care, 1991 (First Outpatient Consultation) Type of Provider Percentage of Cases Government First-Level Care Facility 5.6% Government Hospital 15.5% Total Government 21.1% Private Doctor 46.3% Private Hospital 2.6% Total Private, Trained 48.9% Siani 1.7% Herbalist/Hakim 7.1% Compounder/Medical Store 19.7% Faith Healer 0.5% Other Untrained 0.9% Total Private, Untrained 29.9% Total 100.0% Source: 1991 PIHS. D. Cost of Government Health Services 3.31 Between June and August 1996, a joint exercise was conducted with the Government of Pakistan to estimate the unit costs of curative and preventive services provided in primary and secondary health facilities. A sample of 40 facilities (including 14 BHUs, 12 RHCs, 6 THQs and 8 DHQs) was selected for the purposes of data collection. 14 This section presents a 13/ Note that, at present, the government does not have a problem filling vacancies of general medical officers, except in remote areas. This implies that, given the present level of requirements on these medical officers, the compensation of these officers (including, in addition to salary, the value of the expected pension, of housing, of the contacts they make because of their government jobs, etc.) is not below their opportunity cost. 14/ Of these 40 facilities, 13 were in Punjab, 11 in NWFP, 10 in Sindh and 6 in Balochistan.

45 -23- summary of the results obtained. 1 5 Since the sample of facilities studied is not a representative sample, the results should be interpreted as very rough estimates Costs of curative care were collected for a list of conditions with a significant impact on the health status in Pakistan. These conditions included: acute respiratory infection; diarrheal disease; tetanus; tuberculosis; polio; malaria; typhoid; hepatitis; intestinal helminths; complications of pregnancy; threatened abortion; gynecological infections; anemia; iodine deficiency; protein-energy malnutrition; road accidents; and other accidents. From the above data, estimates were made of unit costs per curative outpatient case (i.e., average for all conditions) at the various types of facilities, as well as unit costs per inpatient admission. In addition to actual unit costs, estimates were also made of what those unit costs would be if a full course of treatment in accordance with generally accepted professional standards was provided at government expense; these are referred in this report as "normative" unit cost estimates. Preventive services studied included immunization, family planning, antenatal care, and growth monitoring. Outpatient Services 3.33 Estimated actual unit costs for curative outpatient services are presented in Table 3.4 below. Fixed costs include the costs of labor, equipmenit, administration (costs of repairs, maintenance, communications, stationery, and miscellaneous expenses), and buildings. Labor accounts for about 72 percent of fixed costs for the entire sample, followed by administration at 15 percent, buildings at 9 percent, and equipment at 4 percent. Variable costs include the costs of medicines, laboratory tests and x-rays. In the case of medicines, only those medicines supplied from the facilit:les' own stores are included in the actual cost estimates in Table 3.4. Similar:Ly, only those laboratory tests and x-rays conducted in the facilities are included in these estimates The table also presents estimates of the "normative" variable costs pier visit for each type of facility (the definition of "normative" unit costs was given in para above). These estimates of "normative" variable costs per visit were developed in consultation with clinical experts working at the primary and secondary level in government health facilities in Punjab and NWFP. These experts listed the type and quantity of medications required to treat a typical case of a particular disease or condition. Individual treatment recommendations were debated among the forum of clinicians until consensus was reached on a standard treatment protocol for each major disease or condition under investigation in the cost study. Based on this standard protocol, and the procurement prices in recent government purchases, a unit cost was calculated for each disease. Finally, a weighted unit cost was calculated, using the shares of cases of each disease in the total number of cases in the study's sample, for each type of facility. 15/ An explanation of the methodology used in the cost study, and further details of results, are presented in Methods for the Cost Study of Health Services in Pakistan, by Logan Brenzel and Akbar Zaidi (1996), a background paper to this report. This paper is available upon request.

46 As can be seen from the table, the fixed cost per visit is lowest at DHQs, followed by THQs; it is highest at RHCs. This result indicates that outpatient facilities are relatively better utilized at secondary hospitals than at rural health facilities (BHUs and RHCs) It was noted before that government facilities are underutilized. Table 3.2 above shows that in BHUs and RHCs doctors see about 100 outpatients per week on an average in the study's sample (this number is likely to be an overestimate of the true mean, since the facilities in the sample were not chosen at random but suggested by the DOHs). This is a light workload. If the average number of outpatients per doctor were increased, fixed costs per visit would be reduced accordingly. Similarly, large reductions in costs per visit could be achieved in THQs and DHQs if the average number of outpatients per doctor in these hospitals were brought up to more normal levels.l Row (iv) of Table 3.4 presents estimates of the "normative" variable costs per outpatient visit. 1 7 The normative unit costs increase with the level of care because of differences in the disease mix. At all four types of facilities, comparison of the figures in rows (iv) and (ii) indicates that the actual expenditure per outpatient for variable inputs (medicines, laboratory tests and x-rays) falls far short of what it would be needed for a full course of treatment. Table Pakistan : Estimated Unit Costs of Outpatient Health Services,1995/96 (in Rs.) BHUs RHCs THQs DHQs i. Fixed Costs/Visit ii. Actual Variable Costs/Visit -Medicines Other Variable Costs iii. Total Actual Costs/Visit iv. Normative Variable Costs/Visit (Medicines Only) Source: Cost study of health facilities, World Bank, Inputs other than medicines represent about 5 percent of RHC's unit variable cost and about 10 percent of unit variable costs at THQs and DHQs The differences between actual and "normative" costs are often made up by the patients paying for their own medicines and supplies. Many expenses associated with treatment prescribed by government doctors take place outside the government facility. I.e., for example, it is common practice for 16/ Reductions in actual costs would of course be lower if staff compensation had to be raised, in line with the argument in para above. 17/ These estimates were derived from disease-specific normative costs of treatment and take into account the disease mix of outpatient cases treated in each type of facility.

47 25 patients to receive two prescriptions: one for medicines available in the facility, and one for those that are to be purchased in the market at patient expense. Similarly, patients often buy laboratory and x-ray services in the market, because the equipment is not available in government facilities, or it is not operational because of lack of supplies or trained personnel Another recent study by the Futures Group International estimated the "normative" variable cost of medicines for outpatients at BHUs and RHCs, at just Rs. 4/outpatient. (Essential Drug Supply in Pakistan at the Primary Health Care Level, forthcoming). The study employed a different methodology than in the World Bank cost study. It used disease incidence figures for weighting and a different disease mix. It did not include tuberculosis in the estimate, which would make a significant difference; in the World Bank study, excluding tuberculosis would reduce the "normative" medicine cost per outpatient at BHUs from Rs. 58 to Rs. 36. Still, even with this adjustment to improve comparability between the two studies, a very large gap remains between the two estimates. The Futures study used generic versicns of essential drugs in all cases, and the lowest published trade prices. The study also shows, using actual data for Balochistan, that using generic as opposed to branded drugs could reduce the Balochistan DOH's drug budget by as much as 50 percent. Inpatient Services 3.40 Estimates were also made of unit costs of inpatient services. These estimates are presented in Table 3.5 below. The definitions of fixed and variable costs, and of "normative" costs, are the same as for outpatient services, but unit costs are now defined in terms of costs per admission to an inpatient facility The table shows that RHCs in the sample have an average cost per admission (fixed plus variable costs) much higher than THQs, and close to that of DHQs. This clearly suggests that provision of inpatient facilities at RHCs is inefficient. These facilities are hardly utilized. In one extreme case, Jiwani RHC in Balochistan, there were only seven admissions in 1995/96, at a cost per admission of Rs. 20, _ Table Pakistan Estimated Unit Costs of Inpatient Health Services, 1995/96 (in Rs.) _ _ RHCs THQs DHQs i. Fixed Costs/Admission 4,009 2,222 4,385 ii. Actual Variable Costs/Admission iii. Total Actual Costs/Admission 4,075 2,660 4,970 iv. Normative Variable Costs/Admission Source. Cost study of health facilities, World Bank, 1996._ Source: Cost study of health facilities, World Bank, 1996.

48 -26- Preventive Services 3.42 The above estimates of unit costs refer to curative services. The cost study also estimated unit costs for several types of preventive services, from the same sample of facilities utilized for the curative service estimates. The estimated unit costs for preventive services are shown in Table 3.6 below. Total costs include all costs (labor, equipment, vaccines, supplies, etc.). Variable costs include supplies only (vaccines, contraceptives, etc.) _ Table Pakistan : Estimated Unit Costs of Preventive Health Services, 1995/96 a. Total Cost/EPI Contact Rs. 51 -Variable Cost/EPI Contact Rs. 17 -Variable Cost/Fully Immunized Child Rs. 85 b. Total Cost/Tetanus Toxoid Dose Rs. 137 c. Total Cost/Antenatal Care Visit Rs. 112 d. Total Cost/Growth Monitoring Visit Rs. 109 e. Total Cost/Family Planning Visit Rs Variable Cost/Family Planning Visit Rs. 14 Source: Cost study of health facilities, World Bank, The cost study also estimated the share of total costs accounted for by curative and preventive services for each type of facility. This is shown in Table 3.7 below. Preventive services account for a large share of total costs at the BHU level (42 percent). The share of preventive services is much lower at RHC level (15 percent), and even lower at THQ/DHQ levels. Budgetary Implications 3.44 As noted above, the figures in Table 3.4 indicate large gaps between actual and "normative" variable unit costs for curative outpatient services. For inpatients, there are smaller gaps (Table 3.5). The cost to the government of closing these gaps would be large However, as noted in para. (3.39) above, there is much scope for reducing the drug gap by emphasizing the use of generic drugs. Further savings may be achieved by reducing the number of drugs in the essential drug list at primary health care level. The Futures study quoted above suggests that such list should be limited to essential drugs. Currently, the number of drugs in Provincial essential drugs lists for primary health care facilities ranges from 80 in Punjab to 179 in NWFP. Such reforms would necessitate retraining physicians in government employment to adopt new standard prescription patterns.

49 _ Table Pakistan : Cost Shares of Preventive and Curative Services by Type of Facility, 1996 (In percentages of total facility costs) BHUs RHCs THQs DHQs EPI 25.0% 9.8% 5.3% 3.1% MCH a/ 17.1% 5.6% 2.6% 1.1% Total Preventive 42.1% 15.4% 7.9% 4.2% Outpatient Department 57.9% 51.3% 32.7% 20.2% Inpatient Department 22.6% 35.1% 43.7% Laboratory 2.3% 6.4% 7.0% X-ray 4.7% 5.7% 11.0% Operating Theater 3.7% 12.2% 13.9% Total Curative 57.9% 84.6% 92.1% 95.8% Total Facility Cost 100.0% 100.0% 100.0% 100.0% _ a/ Including antenatal care, tetanus toxoid vaccination, growth monitoring, and family planning. Source: Cost study of health facilities, World Bank, It should also be noted that the fiscal cost of closing the gap between "normative" and actual costs for curative care would go up over time. This is because: (i) the increased availability of (free) medicines would be likely to draw many patients from the private sector, after some lag; and (ii) population is still increasing at close to 3 percent per year (so that the number of patients seen in public health facilities would steadily increase even if the public sector did not increase its share of total patients) It should not be taken for granted, however, that the Government must incur the full fiscal cost of providing curative services to all at appropriate standards. This is a public policy question; other solutions may be preferable to society. This issue is further discussed in the next section The estimates of unit costs of preventive services can be used to estimat.e the total fiscal cost of various combinations of expansion of coverage. Assume, for example, that in Punjab the following were to be accomplished over the next five years: (i) an LHV is posted in each rural health facility not now having an LHV, so that all such facilities can provide MCH care; (ii) the percentage of fully immunized children is raised from about 60 percent (the figure obtained for Punjab in the 1995/96 PIHS) to 80 percent; and (iii) the contraceptive prevalence rate is raised from about 20 percent (the figure reported for Punjab in the Population Council's survey of 1994/95) to 30 percent, with all of the new clients served by the public sector. It can be estimated that the total annual incremental fiscal cost of such expansion of preventive services would be about Rs. 160 million (by 2001/02), in constant 1996/97 prices. This estimate takes into account population growth.

50 28 E. Priorities for the Use of Public Funds 3.49 An important issue in any country is what the priorities should be for the use of public funds in the health sector. Closely related is the issue of the cost-recovery policy for government health services It should not be taken for granted that the government should make available all types of health services "for free", i.e., at taxpayers' expense. Raising taxes has a high economic cost (in terms of distortions in resource allocation and administration costs). Hence, ideally, the government should not pay for services that people would be willing to pay for themselves. In other words, government spending should not crowd out private spending. (A possible exception would be services targeted to the poor, if such targeting is feasible). Avoidance of the use of taxpayers' money can be achieved by recovering the cost of government-provided services through user charges, or alternatively by withdrawal of the government from providing the services in question Use of public funds to pay for health services can be justified in the presence of various market failures, such as the existence of public goods, externalities and information deficiencies. In the case of public goods, there would be no provision unless the government organizes their provision and pays for their cost. 1 Health education is a good example. In the case of (positive) externalities, private consumption may be less than socially optimal without a government subsidy. Health services that address communicable diseases generally have positive externalities, i.e., they generate benefits not only for those directly treated but for others as well (who would have acquired the disease from those infected). Information deficiencies cause many types of efficiency losses and may justify government intervention, including use of public funds. Priorities Among Types of Services 3.52 Within the general framework outlined in the previous two paragraphs, the setting of priorities for the use of public funds (and of scarce public managerial capacity) among types of health services needs to take into account relevant country characteristics. These include such factors as the level of development of the private sector, the epidemiological profile of the population, the level of education of consumers, and the social status of women. In Pakistan's case, three categories of health services would seem to deserve top priority in terms of allocation of government funds (and management attention). These categories are: (i) health education; (ii) control of communicable diseases; and (iii) maternal and child services (including family planning services) Health Education. Many of the health problems in Pakistan are the result of very poor consumer education. Health education is a classic example of a public good; the government must take responsibility for it and fund it. Some of the most important types of health education needed in Pakistan are as follows: 18/ Public goods are goods where: (i) the consumption of a given unit of the good by one individual does not preclude consumption of the same unit by other individuals; and (ii) it is not possible to exclude any individuals from their consumption. The private sector has no incentives to produce such goods.

51 29 (a) Creation of greater awareness of, and demand for: (i) immunization of infants and tetanus toxoid vaccination for women of reproductive age; (ii) pre- and post-natal checkups and deliveries by trained health care providers; (iii) the health benefits of proper spacing of children through family planning; and (iv) good nutrition practices, especially for pregnant women and young children, but also for adults (e.g., to prevent cardiovascular disease). (b) Basic hygienic practices to prevent various types of communicable disease (personal hygiene, proper cleaning of kitchen utensils, boiling water, proper disposal of human waste, etc.). (c) Education about AIDS and other sexually transmitted diseases and their prevention. (d) Anti-smoking campaigns, to lower the incidence of cardiovascular disease and other diseases associated with smoking. (e) Education of people as health consumers to enable them to develop a better understanding of service quality. Consumers should be educated as to what they should expect and demand from a health care provider, public or private. They should also be educated to be able to distinguish among various types of health care providers, and especially to create awareness of the dangers of seeking care from untrained providers An important point to note is that there is a great deal of synergy between general education levels and specific health education efforts. The efficacy of health education is likely to rise as education levels rise. Nevertheless, health education efforts can have a significant effect even under present low levels of general education. For example, levels of immunization in Pakistan have risen in the past when information, education and communications activities related to the immunization program were stepped up. Another example of a successful recent information, education and communications campaign in Pakistan is the campaign associated with the Greenstar network of private family planning clinics Communicable Disease Control. As noted in Section A above, communicable diseases still account for 38 percent of the total burden of disease in Pakistan. The main ones, in terms of their disease burden, include diarrheal diseases (12.5 percent of total BOD), respiratory infections (8 percent of BOD), tuberculosis (5 percent of BOD), the childhood cluster of immunizable diseases (measles, pertussis, poliomyelitis, diphteria, tetanus; 6.7 percent of BOD), and sexually transmitted diseases (2.2 percent of BOD).' 9 Diarrheal diseases, respiratory infections, and the childhood cluster of immunizable diseases, take their greatest toll from young children (under five years of age). Tuberculosis affects both children and adults The government should take a very proactive stance towards preventing and treating communicable diseases. An important part of this effort should be health education, together with public health measures to improve the availability of safe water and adequate sanitation. But the government also should seek actively to identify and treat those already affected by communicable disease, and to maintain high levels of immunization 19/ See Annex 3.

52 30 coverage on a sustained basis. Government health staff should take advantage of all available opportunities. For instance, when a mother brings her sick child to an outpatient facility for treatment, the staff should seize the opportunity to find out whether the child has been fully immunized The treatment of communicable diseases entails important positive externalities which justify government subsidization. The subsidy need not be 100 percent of cost, though; a certain degree of cost recovery may be feasible without discouraging treatment. In urban areas, where private providers are concentrated, and where consumers tend to be better educated, many patients would seek treatment from these providers at no cost to the government. Where government is the provider, many consumers may be willing to pay for part of the cost, e.g. the cost of drugs. This issue is taken up again later in this chapter Maternal and Child Services (Including Family Planning). Maternal and perinatal conditions account for about 12 percent of the total BOD (Section A above). This large disease burden is due to several causes. First, only about 20 percent of women are assisted by an appropriately trained provider during delivery; similarly, the great majority of pregnant women do not get any pre-natal checkups from qualified providers. Secondly, one-third of births occur less than two years apart, which doubles the mortality risk of newborns as compared to a more normal spacing. 20 Third, as noted in Chapter II, about one-third of pregnant women are underweight, which is correlated with low birth weight --a risk factor for the newborn The above factors explaining poor reproductive health in Pakistan are in turn largely explained by poor consumer education. There is a massive information deficiency concerning reproductive health, and the consequence has been weak demand for family planning services for spacing (although this is changing) and for pre- and post-natal and delivery services by qualified personnel. In effect, most households seriously underestimate the (private and social) benefits of these services. Hence government subsidization of these services is justified on efficiency grounds. A second explanation for poor reproductive health in many rural areas are prohibitions against women seeking care from male providers, in a situation where qualified female providers are often not within reach The information deficiencies and restrictions on women justify government intervention in the reproductive health area. This intervention should partly take the form of educating consumers (a public good). But the government must also make reliable services available, especially in rural areas, where qualified private providers are generally not present. In addition to front-line services provided by community health workers and staff of first-care level facilities, referral services for serious cases (e.g., obstetric emergencies) should be made available at all Tehsil and District Headquarters hospitals As with communicable diseases, a certain degree of cost recovery may be possible for reproductive health services. In the particular case of family planning services, the demand for contraceptives is likely to be highly inelastic with respect to price and income for most households, because the 20/ A detailed discussion of reproductive health problems in Pakistan can be found in Improving Women's Health in Pakistan and Saving Lives, by Anne Tinker, World Bank, February 1997, mimeo.

53 31 cost of contraceptives is very small compared to the cost of having children (for those households that do not want any more children), or to have them sooner than wanted (for those seeking to space).21 Recent empirical work in Pakistan tends to support this hypothesis. Estimation of a multivariate function to explain contraceptive behavior found that household income and contraceptive prices have a negligible effect on the decision to contracept. 2 2 This is consistent with findings of similar studies elsewhere. These findings suggest that it would be possible for the government to recover a large proportion of the cost of providing contraceptives without a significant effect on demand. However, since current contraceptive use in Pakistan is still very low, it may be preferable to reduce the subsidy gradually Most interventions to address communicable disease, and maternal and chi:ld services, would be provided most cost-effectively at the lower levels of the health system (in the households themselves, in the communities, and at first-level health care facilities). However, reliable referral services are also needed to handle emergencies and more serious cases. For most people in Pakistan, the first level of referral are Tehsil and District Headquarters hospitals. The potential for cost recovery is generally less for cases involving hospitalization, because treatment tends to be expensive per episode, and because health insurance is not available to the great majority of the population. Health education should be an integral part of services provided at all levels of the system, supported by the use of mass media. Priorities Among Types of Inputs 3.63 In addition to setting priorities for government expenditure among types ole health services, there should also be a set of principles to guide the setting of expenditure priorities among types of inputs -- staff of differenit types, drugs, new facilities, replacement of equipment, and so on. Provincial Health Departments (and the Federal Ministry of Health) should periodically assess the balance among expenditures on different types of inputs, in the light of their policy priorities. Some suggested principles are given below First priority in terms of government funding should be given to ensuring a more adequate provision of non-salary recurrent inputs for existing facilities. Within such inputs, a distinction should be made between: (i) inputs which patients can purchase in the market, and (ii) inputs that patients cannot purchase in the market. In principle, category (ii) should receive a higher priority, since in this case increasing public expenditure does not substitute for private spending. Inputs in this category include inservice training other than salaries, repairs and maintenance, replacement of worn-out equipment, transportation and travelling allowances, utilities, and 21/ This point is made in Economic Analysis of Projects, by Jeffrey Hammer, Policy Research Working Paper No. 1611, World Bank, May / The sample for the study included urban and periurban couples with monthly househo]d incomes between Rs. 1,500-Rs. 4,000. See Pakistan Private Sector Population Project: Contraceptive Demand and Pricing Study, by Daniel H. Kress and William Winfrey, The Futures Group International UK, January 1997.

54 -32- health education materials and radio/tv program expenses for mass communications Category (i) basically consists of the inputs that formed the basis for our definition of "variable costs" in section D above; i.e., drugs and materials for diagnostics (laboratory tests and x-rays). In many localities throughout Pakistan, such inputs can be readily purchased in the market. And, as already noted, it is very common for patients to purchase these inputs in the market upon prescription by a government doctor. This implies that increasing the budget of government facilities for these inputs may lead to a certain degree of substitution of public for private expenditure. This would be an acceptable outcome if the private expenditure displaced is that of poor households. Moreover, there are drawbacks in the private supply of drugs; e.g., private outlets sometimes sell expired drugs and may not stock generic drugs. These problems also exist in the public sector, but in the short term it may be easier to address them there With regard to expenditure on staff, it would seem that in general provision of additional staff for existing facilities should be restricted to redressing imbalances, in particular increasing the numbers of female paramedics. Moreover, when vacanc:ies occur, they should not be filled automatically. Instead, the continuing need for the position should be examined first, in the light of utilization patterns and other relevant considerations. (Many facilities are overstaffed relative to their patient loads) Establishment of new health facilities, or upgradation of existing ones (e.g., BHU to RHC, RHC to Tehsil hospital) should be kept to a minimum for the foreseeable future, in view of existing unutilized capacity, and it should be subject in each case to the fulfillment of suitable criteria related to expected utilization, availability of alternatives, etc.. Such criteria should be developed by each province. F. Areas of Potential Savings 3.68 There are certain types of health expenditure being incurred by the public sector which have little or no positive impact on the health status of the population. These are areas of potential savings. Overstaffing 3.69 The numbers of posts for certain categories of staff would seem to be excessive. One category that needs scrutiny is that of general medical officers. While detailed information is not available, there is a widespread impression that the number of general medical officers is excessive in relation to their workload in many public health facilities, especially in hospitals. Our own cost study showed low average workloads for doctors at THQs and DHQs (section C above), including both general medical officers and specialists. More studies are needed to assess the potential for savings. 23/ Substitution of public for private expenditure could occur indirectly, though. This would be the case if higher public expenditure on these inputs would draw patients from private providers. In areas where private providers are unqualified, however, such substitution would be a good thing.

55 The argument is sometimes made that in Pakistan the medical schools are producing too many doctors relative to the country's "absorptive capacity", and that this in turn has led to overstaffing of government facilities with doctors. And it is true that medical lobbies have at times pressed the government to create unnecessary posts of medical officers under the pretext that there were supposedly many "unemployed doctors". The issue of what would be the optimal annual output of doctors at the present time in Pakistan is a complex one and we have not attempted to answer it in this note. The nationwide population/physician ratio in Pakistan is reportedly around 1,900,24 which is quite good by comparison with the estimated average for all low-income countries of about 6,700 around 1990, and about the same as the average for all middle-income countries of about 2,000 in the same year.25 These numbers include physicians in both the public and private sectors. It is possible that Pakistan is producing too many doctors. However, the main point we would like to stress in this report is that employment policy for doctors in the public sector should be decided without regard to the existence of unemployed (or more likely underemployed) doctors in the labor market. The government should only employ as many doctors as it needs, according to sound technical norms (and the same goes for any other category of staff). This policy should be clearly established Non-technical support staff also would seem to be deployed in excessive numbers in many government health facilities. A recent analysis of the situation in Northern Areas and AJK (conducted during preparation of the Northern Health Project) found that over 50 percent of the health department staff were in this category and they consumed 38 percent of the salary budget. While undoubtedly some of these chowkidars, sweepers, drivers, etc., are needed, it is most unlikely that they are needed in their present numbers. School Health Program 3.72 All four provinces have a school health program based on the concept of having doctors posted in schools, which is not a defensible concept (see Annex 4 for a detailed analysis). This is a major issue in Sindh, where the program employs some 1,300 medical officers at an annual cost of about US$2 million --almost entirely for doctors' compensation. The program in Sindh is operational only in Karachi division; in the rest of the province doctors appointed to the program have been posted to various facilities (thus contributing to overstaffing). A suitable school health program would focus on health education and it would be teacher-based rather than doctor-based. Badly Sited Facilities 3.73 There are reportedly several hundred rural health facilities (BHUs and dispensaries) which have been built but have not been made operational on account of poor siting. In many cases, poor siting has resulted from the practice of building facilities in donated land, instead of searching for and purchasing suitably located land. While these facilities are not currently imposing a fiscal cost, it is important that they should not be made operational as health facilities. The government should consider alternative 24/ Ministry of Health, Situation Analysis of Health Sector in Pakistan, Islamabad, December / World Bank, World Development Report 1993, Investing in Health, Table 28.

56 -34- uses for the facilities. It is also important that in the future every effort be made to avoid a repetition of these mistakes. Rationalization of Hospital Inpatient Facilities 3.74 Another area of potential savings is rationalization of hospital inpatient facilities to avoid duplication and ensure a higher rate of utilization. The cost study conducted for this report revealed considerable underutilization of inpatient facilities, at least for Rural Health Centers, Tehsil Headquarters Hospitals and District Headquarters Hospitals (para. 3.23). Perhaps some of these inpatient facilities could be closed, thus consolidating use in fewer facilities. However, any such initiative would have to be preceded by detailed studies The above are some examples of low-productivity government expenditures in the health sector. It is likely that additional instances of such low-productivity expenditures could be uncovered by an in-depth analysis carried out by the Federal and provincial governments. This is likely to be especially so on the current budget side, since the annual process of current budget approval is largely mechanical. On the development side, there has been a bias towards construction of facilities without due regard to utilization prospects. G. Cost Recovery 3.76 Government health facilities have a system of user charges or fees. The system varies somewhat from province to province. There are. nominal charges per each outpatient consultation and each inpatient admission. There are also charges for diagnostics (x-rays, laboratory tests, electrocardiograms, etc.). Drugs are provided free of charge. There are provisions to waive charges for certain categories of patients, e.g., poor patients. The decisions to grant such waivers are taken by the medical officer in charge of the facility, reportedly after an interview with the patient and/or his relatives. Many government hospitals also operate upscale "private wards" where charges are much higher than the normal charges. The proceeds from all user charges accrue to the provincial Treasuries Cost recovery in government health facilities is very low. Revenue from user charges from all levels nationwide (primary, secondary and tertiary) amounts to about 2 percent of total government spending on health. 2 6 It is recommended in this note that the government reconsider its cost recovery policy with a view to increasing the percentage of costs recovered through user charges. As already noted in Section E above, raising taxes has an economic cost; hence the general principle should be that the government should not pay for services that people would be willing to pay for themselves (out of pocket or through insurance premia). It was also discussed in section E above that a net subsidy is justified in certain cases of market failure. In the particular case of public goods, such as health education or 26/ Cost sharing, however, is larger than indicated by revenues from user charges. This is because it is common practice for patients of government facilities to purchase drugs and other medical supplies (associated with their treatment at government facilities) in the market. For hospitalized pat-ents, relatives often provide the food and clean linens, as well as a great deal of labor which would normally be carried out by nursing staff.

57 -35- environmental cleanups, a net subsidy equal to the cost of provision would be justified (provided that the benefits from providing the public good in question are thought to exceed the costs of provision). In other cases of market failure, such as failure caused by the existence of (positive) externalities, the net subsidy could be less than 100 percent of cost The case for increasing cost recovery is reinforced by the existing "quality gap" in present services. Ensuring that health facilities do not run out of essential drugs would require greater expenditure --although much could be achieved by using the drug budget more efficiently. Additional expenditures would be needed for upgrading the quality of human resources through more intensive in-service training, for keeping facilities and equipment in better shape, and for making staff more mobile. Moreover, the provincial DOHs are keen to expand services in high-priority areas which have been neglected, such as tuberculosis control, nutrition, obstetrical emergencies, and health education. With the fiscal situation in Pakistan certain to be very constrained in the foreseeable future, sufficient additional resources to meet these needs are unlikely to be available from general revenues. If more resources could be mobilized from the system's clients through user charges --from those who are willing and able to pay more--, faster progress would be possible. To this effect, the provincial Treasuries would have to ensure that the additional proceeds from enhanced user charges accrue to the government health services as incremental resources It would perhaps be best to allow facilities to retain the proceeds from their own user charges and use them for improving their operations. Such an arrangement would be likely to increase people's willingness to pay higher charges, by establishing a direct link between the charges and improvements in the quality of services offered. It would also be important to post the list of user fees in a prominent manner in each facility, in order to provide adequate transparency. At present, it appears that it is a common practice for staff of government health facilities to charge "unofficial" user fees. Displaying the official fees openly should help to curb this practice The issue of what would constitute a suitable health services cost recovery policy in Pakistan is a complex one, however. There are potential risks as well as benefits from raising user charges. If the poor are not exempt from higher user charges, many of them could stop using government facilities and resort to untrained practitioners or self-care instead. There is also a risk that women/girls could be discriminated against in households' health care expenditure. Hence any changes in cost recovery policy would need to be preceded by careful analysis. Some of the relevant considerations for the analysis are discussed below Rural versus Urban Areas. As previously noted, it appears that about 80 percent of people in Pakistan first consult a private health provider when they fall sick; however, perhaps as many as one-half of these people are seeing private practitioners with no medical training. In rural areas especially, there are few private doctors relative to the population. 2 7 Thus the supply of private medical services by trained practitioners would be very (price) inelastic in rural areas, at least in the short to medium term. Under 27/ While no figures are available, this was the consensus that emerged from the field visits conducted by the mission.

58 -36- these circumstances, increases in user charges in government facilities would tend to raise the proportion of rural people seeing untrained private practitioners (who presumably have a very elastic supply) or not seeking care at all. This would be an undesirable result To forestall such a result, raising user charges in rural areas would need to be coupled with other reforms addressed at making government health facilities more attractive to the public. For example, facilities could be allowed to retain the proceeds from the user charges they collect, and use them for improving the quality of their services. To ensure that such an arrangement produced value for the communities paying the user charges, the communities could be given a meaningful role in deciding how the proceeds would be used. This would probably require the creation of some sort of "facility board" in each rural health facility, with representation of the user community, the staff of the facility, and someone to mediate disputes In urban areas, on the other hand, where private doctors and other trained medical practitioners are in much greater supply, raising user fees in government facilities could mostly result in an increased proportion of people seeing trained private providers. This would be a positive development, as it would release government revenues for other high-priority uses for which a private alternative is not available (for the full savings to take place, excess capacity in the government health services resulting from the switch to private providers would have to be eliminated by closing down and/or consolidating some facilities) The above discussion suggests that in Pakistan a differentiated policy concerning user fees for rural and urban areas may be indicated in the near term, with greater emphasis on cost recovery in urban areas Structure of Fees. The structure of fees for first level and for referral services should be such as to encourage the use of lower-level facilities first. Higher fees could be charged to patients who are not referred by lower-level facilities Catastrophic Illnesses. Recovery of a large share of treatment costs is problematic in cases of catastrophic episodes of illness/injury. This refers to conditions that have a low incidence but are costly to treat in each case. One example would be a road accident requiring surgery, hospitalization for several weeks, and subsequent rehabilitation. Another example would be obstetric emergencies requiring surgery. Because in Pakistan 28/ For an empirical study that provides some support to this thesis, see The Sustitutability of Public and Private Health Care for the Treatment of Children in Pakistan, by Harold Alderman and Paul Gertler, World Bank Living Standards Measurement Study Working Paper No. 57, The study shows that the outcome of raising government fees in part depends on the price elasticity of the supply of private doctors' services. If supply is perfectly elastic, all "displaced" patients would switch to private doctors. If, on the other hand, elasticity is lower and fees of private doctors increase by 50% when government fees are raised, many patients would switch to using chemists or to self-care. Thus, in general, the greater the elasticity of supply of private doctors, the greater the proportion of displaced ex-government patients who would switch to (qualified) private doctors as opposed to untrained providers or self-care.

59 -37- there is practically no health insurance market at this point in time, public hospitals providing subsidized care for catastrophic illnesses/injuries act in fact as a form of insurance Gender Discrimination. Under the conditions prevailing in Pakistan, there is a risk that raising user charges ip government health facilities could result in increased discrimination against women/girls in the use of these facilities. A recent study of the demand for children's medical care irn Pakistan provides support to this hypothesis. 2 9 Using a simple model of household decision-making, the authors show that households would invest more on the human capital of sons than of daughters provided that (i) the expected market return to boys' human capital is greater than that of girls, or (ii) boys' expected rates of remittances in adulthood are larger than for girls, or (iii) for cultural reasons, parents are simply more concerned with sons' wealth than with daughters' wealth. They also show that, under the same conditions, the demand for daughters' human capital would be more price elastic than for boys, and that this elasticity differential would be larger for poorer households (i.e., as income rises the elasticities tend to converge). This implies that increases in the price of medical care would have a larger (negative) proportionate effect on the expenditures that households are willing to make on daughters's medical care than on boys' medical care, and that this would be even more so for poorer households. The study finds empirical support for these hypotheses by examining data from a 1986 survey of children's medical care in five rural districts of Pakistan Exempting the Poor. The issue of cost recovery becomes further complicated if considerations of poverty are brought to bear, as they should. In theory, subsidization of health services by the government could be used as a component of an anti-poverty strategy. However, the problem is how to target the subsidies. Untargeted subsidies may in fact be anti-poor. In Pakistan, payment of taxes is approximately proportional to household income - -the poor pay about the same proportion of their income in taxes as the more affluent, except for households towards the top of the household income distribution which pay more. 3 0 If the share the poor pay of the marginal rupee collected in taxes were higher than their share of the marginal rupee spent by the government on health services, expanding subsidized health services would redistribute income away from the poor. This is more likely to happen for curative clinical services, since it is known from other countries that th(e demand for such services has a high income-elasticity. 31 Targeting of health subsidies to the poor would be easier in urban areas, where many of the poor are concentrated in certain parts of the city; this would argue for 29/ Family Resources and Gender Differences in Human Capital Investments: The Demand for Children's Medical Care in Pakistan, by Harold Alderman and Paul Gertler, International Food Policy Research Institute, Washington D.C., June / This is because the bulk of tax revenues are from indirect taxes, whose tax rate is roughly proportional to household income. See Incidence of Taxes and Transfers in Pakistan, by Dr. Shaukat Ali, Ministry of Finance, Pakistan, mimeo, September / The issue of use of health subsidies as an anti-poverty instrument is discussed in Economic Analysis for Health Projects, by Jeffrey S. Hammer, World BaLnk Policy Research Working Paper No. 1611, May This paper provides a good overview of economic issues in the health sector.

60 38 geographically and targeting would be more difficult. Poor households would have to be identified individually and given a "health card" that would entitle them to free (or more highly subsidized) services. One possibility would be to use the Local Zakat Committees to identify these households, given certain agreed criteria. Another, more indirect (but easier to implement) method for directing subsidies to the poor would be for the Government to give a high priority to services that address those illnesses known to be especially important for the poor, such as tuberculosis and nutrition-related conditions Subsidizing the consumption of health services by the poor would also be the most promising approach for addressing gender discrimination in household demand for health services, since (as noted in para. 3.87) it is among poor households that the gender discrimination problem tends to be more acute Operationalizing the above principles would require further studies in each province, and the development of the institutional capability to implement it. Adequate management systems at the facility level would be necessary to ensure transparency and prevent fraud. The formulation of costrecovery schemes should include a significant element of consultation and participation. Particularly difficult would be the operationalization of the exemption for poor households. First, each province would have to formulate its own definition of poor households. Secondly, a mechanism for identifying these poor households would need to be established. H. Tertiary Hospital Autonomy 3.91 There is considerable momentum in Pakistan towards granting greater managerial and financial autonomy to tertiary government hospitals. Several hospitals already enjoy greater autonomy. An example is the Sheikh Zayed Hospital in Lahore (see Box 2). Financial autonomy need not be associated with greater cost recovery, but in Pakistan the trend seems to be in favor of such an association There are several important advantages from greater autonomy of tertiary hospitals: (a) By enabling the hospitals to set their own schedule of fees, following certain basic principles laid down by government, it potentially enables a higher degree of cost recovery. (b) Proceeds from enhanced cost-recovery can be used to finance expansions of services (or the maintenance of present services, by for example enabling timely replacement of worn out equipment) that may not be possible if the hospital is solely dependent on the government budget for its revenues. 32/ Financial autonomy has two different interpretations. First, it could refer to a situation where government hospitals are given a block grant from the government budget and allowed to decide how to use the funds, with or without a performance agreement. Secondly, in addition, they could be allowed to set their own fees and keep the proceeds.

61 39 (c) Autonomy endows managers with real management powers (delegated to them by the governing board of the hospital), such as the power to select new staff and to dismiss those who do not perform. Thus it may lead to major operational efficiency gains For the benefits of autonomy to materialize fully, though, certain conditions need to be present. The governing board of an autonomous hospital should have real autonomy (i.e., be free from political interference). Its membership should adequately represent the major groups of stakeholders, and it should embody sufficient technical expertise as to be able to assess and guide the hospital's management team. Moreover, the granting of autonomy should be accompanied by the introduction of a performance agreement which broadly sets out the outputs expected from the autonomous hospital (as counterpart to the current government revenues it receives and its use of public assets). The governing board and the management team would be made responsible to the corresponding public authority (provincial or federal governrment) for delivering on the performance agreement A possible problem is perverse equity effects. The potential for such effects is well illustrated by the case of a planned 150-bed Children's Hospital in Quetta, Balochistan. The hospital would be an autonomous public hospital with an independent Board of Governors. Two-thirds of the capital cost would be financed with a foreign grant and one-third with provincial government funds. It is expected that 80 percent of the current budget would be financed from user charges, and the remaining from the provincial budget. The Chief Executive would be recruited internationally, and specialists in the staff would be paid salaries several times higher than regular government scales in order to attract top talent. Children would be admitted not only from Balochistan but also from elsewhere in Pakistan and from abroad. This would be undoubtedly a model facility. However, the combination of high percentage of hospital costs financed from user charges and high staff salaries would require user charges of a magnitude such as to price out poor households in Balochistan (and probably many others as well, who would not be considered poor by local standards). At the same time, a substantial amount of Balochistan's government revenues would be consumed every year by the hospital. One possible option would be to earmark the 20 percent government contribution to the current budget of the hospital towards the treatment of patients from Balochistan whose parents could not pay the regular fees. The Board of Governors would have to set guidelines to this effect and monitor implementation. I. Conclusions and Recommendations 3.95 More than half of the disease burden in Pakistan is still accounted for by communicable diseases and maternal and child illnesses. It has been argued in this chapter that addressing these health problems should be the top priority of the government health services, together with health education. Health education, both interpersonal and through mass media, would be a key element of any successful strategy to address both communicable and non-communicable disease.

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63 -41- health education and other public goods such as vector control, the government subsidy need not be 100 percent of cost in all cases. A certain degree of cost recovery may be feasible without discouraging people from seeking treatment. And, cost recovery would of course be justified for other health services as well. In principle, because of the economic cost of raising taxes, the government should not pay for services that people would be willing to pay for themselves (out-of-pocket or through health insurance). The case for increased cost recovery is strengthened by the existing "quality gap" in government services, which increased cost recovery could help to reduce The issue of what would constitute a suitable cost recovery policy for government health services is a complex one, however. There are potential risks as well as benefits from raising user charges. If the poor are not exempt from higher user charges, many of them could stop using government facilities and resort to untrained practitioners or self-care instead, There is also a risk that women/girls could be discriminated against in households' health care expenditure. Furthermore, there is the problem of lack of access to health insurance by the great majority of households, which severely limits the potential for cost recovery in cases of "catastrophic" illnesses or injuries. Thus any changes in cost recovery policy would need to be carefully thought out, and perhaps piloted before widespread replication In the case of tertiary hospitals, there is already a trend towards greater managerial and financial autonomy associated with greater cost recovery. This is a positive trend in general, but the possibility of perverse equity effects needs to be considered and guarded against. Also, for the benefits of autonomy to materialize fully, certain conditions need to be present --including a governing board free from political interference, broadly representative of the hospital's stakeholders, and with sufficient technical expertise. The granting of autonomy should moreover be accompanied by the introduction of a performance agreement The chapter also points out that there is considerable unutilized capacity in government health facilities, at least up to and including the District Headquarters Hospitals. This is coupled with widespread use by the public of private providers, including (a point of great concern) widespread use of untrained private providers. In view of the existing unutilized capacity in government facilities, it is recommended that establishment of new facilities and upgradation of existing ones be kept to a minimum, and that it should be subject in each case to the fulfillment of suitable criteria related to expected utilization and other relevant factors. Instead, priority in the allocation of incremental resources available to the provincial/area health authorities should be given to providing for more adequate non-salary recurrent inputs for existing facilities, and for expansion of services in areas of high priority that have been neglected --such as tuberculosis control, nutrition, obstetric emergencies,and health education Provision of additional staff for existing facilities should be restricted to redressing imbalances, in particular increasing the numbers of female paramedics. For other categories of health staff, vacancies should not be filled automatically, but the continuing need for the positions should be examined first. In particular, the categories of general medical officers and non-technical support staff would appear to deserve close scrutiny More generally, it is recommended that the Federal and provincial/area governments undertake periodic in-depth reviews of their ongoing health programs in order to assess their continuing need and priority

64 -42- and the adequacy of program design. Examples of wasteful expenditure identified in this chapter include the (current, doctor-based) school health program, and the construction of badly sited rural health facilities. There may also be scope for rationalizing the deployment of inpatient facilities On the positive side, one category of government-financed health workers that should probably be expanded is that of Lady Health Workers. 3 3 LHWs are providing critical services, such as health and nutrition education, health monitoring, referrals, and family planning, in close interface with households. Expansion of this program has been rapid, however, and at the present time it may be advisable to slow down expansion in order to enable consolidation and the maintenance of quality. 33/ This is a program funded by the Federal government.

65 43 CHAPTER IV: IMPROVING THE MANAGEMENT OF GOVERNMENT- FINANCED HEALTH SERVICES 4.01 The previous chapter highlighted the paradox of the existence of considerable unutilized capacity in government health facilities (at least up to and including the District Headquarters Hospitals) alongside use of private health care providers by the great majority of the population --even by the poor. Government health services are not well appreciated by most households. While poor consumer education is a likely factor in producing this result (with many households resorting to untrained private providers), serious deficiencies in the management of government health services are also a factor. Because of these management problems, the public is getting poor value for money This chapter first defines the management profile of the government health services in Pakistan. This is followed by a discussion of the main management problems. Finally, the chapter outlines several avenues for reform which can be expected to produce a significant improvement in the system' s performance. A. The Management Profile of Government Health Services 4.03 The management profile of government health services can be described under the headings of "organizational structures" and "management systems". Organizational Structures 4.04 There are two main elements that comprise the organizational structure of any health system. One is the structure as defined by the organizational units within the ministries and departments at the various administrative levels (Federal, Provincial, Divisional and District). The second is the structure of the service facilities Organizations are generally one of three structural types: functionial, program/project, or matrix. While there is no right or wrong structure per se, matrix structures have proven difficult to manage. In Pakistan's health sector, all public sector organizations have evolved into complex matrix structures. The original structures were functional. However, the addition of internationally funded projects and other specific program activities has added units of the program/project type, turning the organizations into matrix structures The matrix structures would not be so difficult to manage if the organizations were relatively small. However, all the organizations in the government health system are large in terms of staff and numbers of organizational units. The largest province, Punjab, has just over 100,000 staff and 96 major organizational units, while the smallest province, Balochistan, has 10,000 staff and 47 major organizational units. These large matrix organizations are further complicated structurally by divided top management: Secretaries, usually administrative cadre civil servants, and Director Generals, usually medical professionals.

66 Together with the development of a matrix structure, there has been a tendency towards a certain degree of compartmentalization. Key preventive services of health education, immunization, and family planning are assigned to specific staff as opposed to making these functions part of everyone's job. This has tended to weaken the public health orientation of government services The structure of the service facilities, which was agreed through a planning process organized at the national level, has correct conceptual underpinnings. The current design, if implemented "purely," would have been relatively easy-to manage and operate, as it would have led to increased standardization of services, staffing, and supplies. However, this design was overlaid on the system existing before The implementation, which was largely the responsibility of the Provinces, was uneven. Instead of first upgrading or eliminating existing facilities (mostly dispensaries and MCH centers), they were allowed to continue to exist in parallel. At the same time, the new facilities (RHCs and BHUs) were built. The result is that a mixed structure continues over two decades later. Management Systems 4.09 Planning Systems. Planning is very centralized. It is concentrated in the planning agencies (Federal Planning Commission and provincial Planning and Development Departments), and the planning cells in the provincial DOHs. There have been recent efforts to begin district level planning with a few districts. Planning processes have thus far only dealt with the public sector. Sometimes plans make reference to the private sector or NGOs, but there have been no significant coordination activities, joint services, or resource transfers among the various health sub-sectors The planning cells in the provincial DOHs have developed some staff capability over the last decade, but they are still small and only starting to have any influence on planning decisions. The planning function is also fragmented in the provincial DOHs. Planning cells are attached to the Secretary's office, but there are also planning staff among the Director General's staff. This is not intrinsically a problem, but most practice so far has been uncoordinated. Furthermore, many planning decisions that ought to have a technical basis are performed by people in the budget sections of the DOHs and Department of Finance An additional complication in the planning process is the lack of public health knowledge and orientation. The staff in each province with public health training and interest are very few (generally less than 20 per province). As a result, while few are even aware of it, the "medical model" tends to dominate many decisions in the government health services. (The private sector almost everywhere will operate by the "medical model", unless given strong incentives to behave otherwise). The "medical model" is characterized by an emphasis on curative health services, little concern with the overall pattern of allocation of resources, a desire to provide "state-ofthe-art" care, and the measurement of outcomes in terms of changes in the health status of individual patients. By contrast, the "public health model" emphasizes preventive interventions, obtaining maximum impact on the health status of communities for the resources available, the use of appropriate technology rather than "state-of-the-art", and the measurement of outcomes in terms of changes in the health status of the population at large.'

67 Implementation Systems. There is no unified system for service operations and practices. Some projects have developed procedure proforma for the project's specific needs. As part of the training for some cadres, standard practice procedures have been defined --e.g., for Lady Health Workers. However, since staff are generally not trained jointly as working teams, there is no guarantee that other co-worker cadres will follow those same practices Personnel Systems. Procedures do exist; most of these are very similar government-wide and laid down by the Establishment Division. While there is some provincial variation in these procedures, it is not great. The procedures were designed largely to control personnel, and were framed to cover a much smaller number of centralized staff. Almost all the procedures deal with personnel actions, not personnel management. Because the system is several decades behind current needs, including little decentralization, it results in top managers typically spending a very large portion of their time on petty personnel actions. For this system (and most others), the formal system only provides a framework for the official paper generation, signing, and filing. The actual basis for decisions have little relationship to official criteria. Every personnel decision is largely person dependent --it depends on who wants a decision made, who is in a position to make the decision, and who else may be affected Drugs and Medical Supplies. There are some standardized procedures for requisition, supply, transport, inventory, and dispensing, but these are not integrated with each other. Dispensing practice is often based on types and quantities available. Supplies rarely match requisitions, and the situation is further aggravated by late deliveries, pilferage, and poor inventorying and storage practices. Moreover, as noted in the previous chapter, large savings could be obtained by emphasizing the use of generic drugs over branded drugs and shortening the Essential Drug Lists Financial Systems. Systems for accounting and audit follow the GOP standard with some provincial variations. One of the greatest weaknesses from a managerial perspective is that accounting is done by a single-entry, cash accounting method, which has changed very little in 50 years. This system is suited for small operations in a single location. For systems the size of the government health services, a double-entry, accrual method is necessary. Any financial management would be almost impossible now as the official record of expenditures is not kept by the DOHs, but by the Auditor General's office. This office also re-categorizes expenditures according to different headings than those under the approved budget; therefore, relating the two is very difficult Monitoring and Evaluation. There is no systematic monitoring and evaluation of the performance of the health services. The introduction of the HMIS is a major improvement in terms of data availability, but it is not yet fully deployed and does not cover inpatient services. Demographic and health surveys have given an indication of overall health status. There also have been ad hoc evaluation studies, usually done by international assistance organizations or independent authors. While these surveys and studies are 1 See Bradford H. Gray, World Blindness and the Medical Profession: Conflicting Medical Cultures and the Ethical Dilemmas of Helping, The Milbank Quarterly, vol. 70, No. 3, 1992.

68 46 useful, they do not represent an ongoing, internal system. Recent discussions of monitoring, and to a lesser extent evaluation, have lead to the notion that the solution to this managerial weakness will come from the creation of information systems (e.g., the HMIS) and/or monitoring units. This concept of compartmentalizing monitoring is a very risky strategy. Most of the monitoring functions should be part of the job of every manager. Managers are the real engine of monitoring as they make the monitoring decisions. An information system and a monitoring cell doing the preliminary analysis only provide the raw materials for the key process. B. Main Management Problems 4.17 Section A above has already pointed to some of the management problems in the government health services. This section will focus on the priority problems. Governance 4.18 There are two broad categories of governance problems which affect the performance of government health services: (a) problems related to "rentseeking" behavior on the part of civil servants; and (b) interference by politicians in managers' decision-making Rent-Seeking Behavior. While some of them are difficult to document, it appears that various kinds of rent-seeking behavior are widespread among government health staff, which impair the functioning of health services. Examples (as reported by knowledgeable observers) include: (i) Staff absenteeism. Government health staff, especially medical officers, are often absent from their posts during normal duty hours. They are thus able to engage in private practice during this time, while at the same time collecting their government salary and other benefits. In many cases, staff theoretically posted to a rural health facility are actually "seconded" to other government facilities in urban areas and do not show up at their rural postings at all. In some cases staff reportedly make payments to their supervisors in order to be allowed to be absent from duty on a frequent or permanent basis. In other cases they are protected by powerful politicians who shield them from disciplinary action. A contributing factor to absenteeism is that the training of physicians is too clinically oriented, although some changes have been made to include more community/public health orientation. Also, many BHUs are located in out-of-the-way places with few amenities or basic services (such as schools), which makes medical officers reluctant to live on the premises. Originally, BHUs were intended to be staffed by paramedicals only. (One possible solution would be to concentrate medical officers at RHCs, which are usually located in or near small towns, and provide them with transport to visit BHUs in the surrounding area at certain pre-announced times). (ii) Frequent transfers. Medical officers in government service compete for postings to health facilities located in the busier towns and trading centers, where they can have a profitable private clinic. They reportedly resort to making payments to those who have the power to effect transfers, and this practice tends to increase the frequency of transfers of medical officers --thus weakening their ties to the communities they are supposed to serve.

69 47 (iii) Pilferage of supplies. In some health facilities, staff reportedly sell government-provided medicines and other supplies (which are in short supply to begin with) to private merchants or health care providers and pocket the proceeds Interference by politicians. Many of the government health managers interviewed for this report complained about widespread interference by politicians in various types of personnel management decisions, such as personnel recruitment, transfers, and disciplinary actions. Exercise of such influence is "political currency" which can be used to buy votes and political campaign work. Interference by politicians results in lower efficiency of the health services and is a major demoralizing factor for managers and staff One implication of political interference is that provincial health departments are very constrained in their ability to redeploy resources. Many health facilities are overstaffed for current utilization levels, but health managers find it nearly impossible to reduce the staff complements, or even to eliminate vacant posts. Attempts in this direction would encounter stiff resistance from the political level, even though they may make perfect sense from an efficiency point of view. 2 With these constraints a manager has to be extremely creative and energetic in order to make any operation or activity effective. Interactions With Other Segments of the Health Sector and Civil Society 4.22 Government health services are very closed to external influences. They have largely a one-way relationship with clients/patients. There is little meaningful interaction with communities, professional bodies, NGOs, and the private sector. The absence of meaningful interaction with these other segments of civil society weakens the impetus for meaningful reform. Management Processes and Performance 4.23 Most managers do not have effective control of their resources. Control of resources and real management decision-making often rests far away from the delivery of services. This lack of local control makes implementation management extremely difficult Managers' effectiveness is also compromised by the fact that the planning process still tends to be dominated by capital investment decisions rather than by a rational discussion of health services and their outcomes. There is no system to arrive at a consensus on service priorities, and to ensure that managers at all levels really focus on those services that are rated as top priorities As there is no data-based assessment of managerial performance in the health system, it is only possible to make a general assessment of this performance. Given the encumbrances of the system and sub-systems, it is a credit to some individual managers who make an effort, that any reasonable services are delivered. Managers trying to make services perform are often forced into a crisis management modality. 2 For example, in Sindh, a 10 percent saving on staff costs would release enough funds to increase the budget for medicines by 60 percent.

70 This starts, for example, with the planning sub-systems. While the PC-1 form requires an estimate of the recurrent cost implications of a development project, those estimates in no way commit the operating funds. As a result, managers are often forced to operate programs and facilities with less than minimum basic resources. Proper planning would have created fewer programs or facilities, which then could be adequately resourced Good management in the government health system is person dependent, not system dependent. There is very little modern management practice, starting with time management. A considerable amount of most higher level managers' time is taken up with petty personnel issues, construction, drug procurement details, and foreign funded projects. The result is that managers have little time for more productive management functions, such as program/service planning, supportive supervision, information analysis, monitoring, or evaluation. Human Resource Development 4.28 There is little human resource planning. What is done is only for a few cadres and short term --it is not comprehensive. There are too many doctors in relation to paramedicals, and excessive numbers of non-technical support staff. The staff's gender composition is heavily biased towards males, in both total numbers and within management. Pre- and in-service training is generally of poor quality. Weaknesses in training pertain to both the relevance of the curricula to the needs of the job and the training process itself. Personnel actions are often compromised by political interference and other governance problems. There is little serious supervision, which contributes to high levels of absenteeism and poor overall performance. C. Suggested Reforms 4.29 The pervasive management problems throughout the government health services argue in favor of fundamental reforms. This was certainly the consensus of the July 1996 SAPP II preparation workshop. It was agreed at that workshop that the process of change cannot be limited to the fine-tuning of existing organizational structures and management processes. Something must be done to change the overall organization of the sector and its governance, with a view to changing the incentives and constraints facing the sector's actors in a fundamental way. The desired outcome is a new set of government-financed health services which are better focussed on the right service priorities, more efficiently managed, more open and responsive to the influence of all legitimate stakeholders, and better appreciated by the public In this section, several types of reforms are suggested which would help in moving the system towards the desired outcome. They are: the establishment of district and provincial health boards; enhancing the role of NGOs; working towards greater community involvement; decentralization; and putting a greater effort and focus on human resource development within the health sector.

71 49 Establishment of Health Boards 4.31 A key aspect of changing to a new system is agreeing on new roles and responsibilities. Health services always have the risk of being supply or provider driven. If this drive is based on the "public health model", then this is not a major problem, but if the "medical model" is followed then suppliers may not focus on those services with the most beneficial impact on the pub:lic's health status. In an effort to achieve a more balanced decision making, and to improve operational efficiency, a recent approach has been to divide decisions concerning government-financed health services into: (i) those of the client or purchaser, who decides what services are demanded and how they are paid for; and (ii) those of the supplier or provider who, in the context of effective demand, decides how the production of services is to be organized and managed. 3 This approach is known as the "purchaser/provider split". The "client or purchaser" in this context is some kind of public body with broad representation, which acts in fact as an "agent" for the final consumer of government-financed health services In Pakistan, the government health services are currently both "purchasers" and "providers"; the same set of people in each province or area decides what types of services will be produced, and the specific manner in which the services will be produced (within the budget envelope agreed with Finance). One important option towards improving the organization and governance of the sector would be to split the two functions of purchasing and provision. This would enable "opening up" the decision-making process concerning broad resource allocation decisions to wider public representation, while enabling health sector specialists to concentrate on the management of the production process. Such a system would also facilitate holding providers accountable for their actions, provided that the purchasing authority has effective control of the health budget In order to begin this process of opening up and improving provider accountability, the establishment of Health Boards at the provincial and district levels, with broad representation from users and the private and public health sectors, is suggested in this report. Eventually these boards could become the purchasers for all health services within a given area -- probably the district level Initially, the Health Boards could have a predominantly coordinating role with limited authority. In this initial stage, they would be mostly a forum to begin bringing the "sector players" together --from both the public and private health sectors. They could also be responsible for directing situation analyses for their respective areas (some districts are already beginning to carry out such analyses), define health problems and needs, monitor sector activities, and start a discussion, with broad participation, about possible changes in the sector. They could also play a role in overseeing the collection of user charges and the use of the proceeds for improving the quality of services The role of the Health Boards could then evolve over time towards incorporating a sector planning function, with real authority over the allocation of government resources within their respective areas. Provincial Health Boards would have a major input into the decisions concerning the 3 Examples include the U.K.'s health system and the Medicaid/Medicare system in the United States.

72 50 distribution of the province's health budget among districts, and into formulating province-wide policies. District Health Boards would decide on how resources are broadly allocated within the district (micro resource allocation decisions would be left to the managers in charge of various health facilities). In doing this, they should keep a strong focus on the service priorities identified in Chapter III --health education, control of communicable diseases and maternal and child health services. Provincial and district Health Boards would also have a continuing monitoring function of government-financed services, with adequate mechanisms for enforcing accountability of providers Once District Health Boards are sufficiently established, the provincial authorities may wish to consider giving them full control over the health budget for the district and converting them into purchasing authorities. In this capacity, the District Health Boards would enter performance-based management agreements (or contracts) with providers of various kinds --including NGOs and other private providers in addition to the staff of government facilities. In order for such an arrangement to be effective, the District Health Boards would need to have sufficient authority to penalize providers whose performance falls short of what was agreed in the management agreements, including public sector providers. The details of how to ensure that this is so, and the implications for changes in civil service rules, would need to be worked out Procedures used by the Health Boards to contract services and monitor contract fulfillment would have to be extremely transparent in order to guard against possible rent-seeking behavior. Periodic inspections by outside "third party" teams of auditors could also be incorporated into the system to provide further assurance against fraudulent practices. Enhancing the Role of NGOs 4.38 In many countries, health sector NGOs are major players. NGOs tend not to suffer from the same performance problems as the public sector because of their smaller size and very different organizational cultures. In Pakistan, NGOs have a presence in the health sector, but are not major players. It is recommended in this report that the Government expand its efforts to facilitate and provide incentives for the creation and expansion of health NGOs Since most of the disease burden is borne by women and children, and there is still such a strong gender division in Pakistan, this report recommends that government assistance focus on NGOs with the following characteristics: 4It would also be desirable to constitute a national health board, which would be responsible for formulating health policy on issues that cut across provincial and area boundaries, such as communicable disease control. S A start has been made under the Participatory Development Program in the Social Action Program.

73 51 (a) Their primary service objective would be to improve the health of women and children; i. They should provide: -ante and post natal care; -normal delivery care and support; -emergency obstetric services as well as essential obstetric services; -gynecological services; -fertility control and counseling; -nutrition support and services, including micro nutrients; -immunizations (they could take over the EPI program in their catchment area after they are well established); -ARI and diarrheal disease control; -childhood disease diagnosis and treatment; ii. They should integrate health education into all services. (b) They would be staffed and managed exclusively by women. This would ensure easier access to, and empathy towards, their primary target group of women and small children. (c) They would be initially funded through performance (output-based) c.ontracts with public funds, but they would also be allowed to raise funds on their own (as most do now) which can be done through fund raising and/or charging fees for service. (d) The government supervision would only be to ensure the fulfillment of contracts. (,e) It is expected that most would be located in cities, towns, and market centers, but generally not in villages (for security reasons and economies of scale); therefore it is expected that patients would come to them rather than expecting "services at the doorstep"; but outreach services could also be operated by the NGOs when feasible. (f) In some cases, they may take over existing public sector facilities such as BHUs or RHCs if they are not being used or are seriously underutilized. (g) They should coordinate service timings and referrals with public and private sector services in the area or district In Chapter III it was noted that it is generally believed that NGOs working in the health sector in Pakistan are few in number and mostly small in size. The presence of a clear government policy to establish partnerships with NGOs, backed by significant financial commitments, would however encourage the expansion of NGO activity in the health sector. Such an expansion could come from expansion of activities of NGOs presently working in health; from the creation of new NGOs dedicated to health activities; and from the diversification into health activities of existing NGOs not presently working in the health sector. Untapped potential could be quite substantial A useful step towards tapping this potential would be for the Provinces/areas to set up a unit within their DOHs to coordinate relationships with NGOs. Two of the functions of these units could be to make an inventory of NGOs working in the health sector in the respective Province/area, and to conduct or commission studies of those NGOs that appear to be particularly

74 52 successful (in terms of the quality and relevance of their services, their coverage of poor segments of the population, their financial sustainability and quality of financial management, and so forth). Lessons drawn from such studies would be useful to guide the formation of partnerships with NGOs. They could also be useful to inform management reforms in the government health services themselves The process of contracting for the provision of health services by NGOs with government funds has to be transparent, fair and free from political interference. Monitoring of the performance of the NGO contractors also has to be transparent and fair; a possibility would be joint monitoring by the NGO themselves, the corresponding government line agency (provincial/area DOH), and an independent third party. Financial arrangements for the contracting out process would have to include a provision for monitoring costs In addition to contracting for the provision of services by NGOs, alternatives could be explored by the government for contracting the provision of certain services by associations of private physicians and other private sector partners. This is further discussed in the next chapter. Community relations/involvement 4.44 The need for community involvement is not just a popular idea. It is essential to the practice and provision of public health services. Building partnerships between communities and service providers is essential to any success in changing health status. However, there is no universally applicable model for community involvement. There are only certain guiding principles, among which the following are perhaps paramount: (a) Decentralization is clearly a necessary precondition for community participation to develop; (b) It is doubtful whether community participation can be sustained if solely developed around specific health projects or programs; (c) A corollary of the previous principle is that an intersectoral approach is probably more likely to succeed (SAP could facilitate such approach); (d) The district health team has to be proactive in promoting the conditions for community participation to work effectively; (e) The development of appropriate attitudes, values, and approaches to participation among health workers and managers should be given priority attention; and (f) The district health management process and planning cycle should be scrutinized with a view to determining the key points at which participation can occur 4.45 Possible areas for participation are primarily three: (a) contributing to the formulation of health programs and services (planning); 6 Collins, Charles. Management and Organization of Developing Health Systems Oxford University Pres, New York pp

75 53 (b) contributing to operational management, including: facility and housing decisions, staffing decisions, supply and logistic decisions, utility (water, power, sanitation) decisions, maintenance decisions, financial decisions, and monitoring decisions; and (c) contributing resources, including: information, labor, money, food, and other goods Meaningful community participation in the affairs of government health ifacilities is potentially a powerful tool for improving accountability of health staff (e.g., it could help to reduce absenteeism). For this reason it is likely to be resisted by those staff lacking a commitment to their jobs and communities. There is also the issue of how to ensure a broad and honest representation of the interests of the various social and ethnic strata. If community representatives are drawn from a narrow segment of the community, there is a danger that whatever power is granted to these representatives may be used selfishly to promote the interests of a select few within the community (including the representatives themselves) The formula for how community participation would be implemented must be worked out and it certainly could vary by province and even within provinces. Generally it is suggested that participation begin with only one of the three types of participation identified above and then expand to the others as the community is ready and able. Different approaches could be tried in the form of pilot projects. If Health Boards are introduced as suggested in this report, they should have representation from community bodies Experience from other countries suggests that community leaders are likely to have a bias towards the provision of curative services. Thus, a concerted education effort would be needed to make them aware of the importance of health education and other preventive interventions, such as immunization, family planning, and pre- and post-natal checkups. Decentralization 4.49 Decision-making within the government health services in Pakistan is very centralized at the provincial level. There seems to be increasing recognition that this excessive centralization is a serious barrier to achieving greater efficiency and responsiveness to local conditions. Considerable momentum appears to be building for a significant decentralization initiative; this report concurs that such an initiative is necessa:ry Decentralization entails a transfer of real decision-making authority to make policies, carry out management functions, and use resources. The options for decentralization are many; however, in practice, a number of different forms may be superimposed upon each other. The main options are: (a) Deconcentration, which involves delegation of powers to lower levels, with the powers kept within the same organizations. It can be done in two ways: i. Functional - where some decision authorities and functions are "sent out" to geographic or facility managers within the same organization. What specific decision authorities are decentralized may vary, but unless managers have authority over all major steps in the management cycle (planning, implementing,

76 54 and monitoring) over their span of control, decentralization will probably be ineffective; ii. Prefectoral - where authorities and functions are given to the same types of geographic or facility managers, but at the same time their immediate managerial accountability is transferred to a civil administrator in the area (mayor, district commissioner, governor, etc.) who is, in turn, responsible to the central government. The sector managers are usually still technically responsible to the sector ministry. (b) Devolution is the transfer to completely separate, existing governmental units, such as provinces/states, districts, or municipalities. This usually implies that all of the health operational functions and services are determined by each separate unit, within an agreed budget envelope. The policy function is usually the only function retained centrally. Pakistan's government health services are already mostly devolved to the provinces/areas. (c) Decentralization to local bodies such as District Development Councils or District Health Boards. Again this is a shift of decisionmaking power to completely different organizations. These organizations may exist, or they may be set up as part of the decentralization process. This form of decentralization is similar to devolution, but it may or may not imply that the actual service delivery is done by the local body. These bodies may only do the planning, upon assessment of local needs. They usually also play a strong role in monitoring performance of health service delivery (even if they are not directly engaged in delivery). (d) Delegation to semi-independent entities usually refers to the transfer of decision-making authority to institutions such as hospitals or training centers as individual entities, as opposed to organizations which cover larger areas and have a variety of health services. Pakistan is already experimenting with this type of decentralization in the cases of a few semi-autonomous hospitals. The exact managerial and funding relationship varies, but in most cases all day-to-day executive decisions are given to the institution. (e) Purchaser/provider split model, whereby local health authorities control the government funds available for health and are free to contract with a variety of competing organizations and individuals. Again the central government (basically the provincial/area governments in the case of Pakistan) usually retains the policy role. As previously noted, the establishment of District Health Boards in Pakistan could eventually lead to this type of decentralization Current reform efforts in Pakistan center around deconcentration within the provincial/area DOHs (para. 2.25). Such efforts are valuable and should be continued. However, the powers delegated so far refer to implementation only; reforms should be broadened to include also delegation of planning and monitoring powers. The provincial/area governments may also wish to consider introducing formal performance agreements as a mechanism to reinforce the transfer of authority within DOHs and assist accountability.

77 55 Human Resource Development 4.52 In the health sector, the staff are the critical factor in providing quality services, and their applied knowledge is the critical factor in their performance. The human resource development function can be divided into three broad categories of activities: planning, production and personnel management. Provincial/area departments of health need to put greater efforts into all three categories. Some of the priority tasks involved are discussed below Planning - The planning of human resources in the health sector has to be based on periodic assessments of future requirements of health personnel of various categories. Such assessments should take into account the following factors: a. Any plans for changes in the overall organization of the sector; b. The types of service priorities, which in the case of Pakistan should result in a strong focus on the development of adequate staff resources to address communicable diseases, maternal and child health problems, and health education needs; c. The predicted growth of the sector; d. The mix of professional, technical, and support staff (as already noted, Pakistan has a distorted mix of staff in the public sector; too high a proportion of medical officers and support staff in relation to the mid-level paramedical and technical staff); and e. Given the gender-segregated service requirements, the demands made by task/jobs which are gender-specific must be explicitly accounted for The planning function must be carried out, or at least managed, by government, as the private sector would not undertake it of its own initiative. The efforts in this area thus far have been incomplete and intermittent. This function must be regularized as a key ingredient of health planning Production - This involves both pre- and in-service training and other staff development (divided into technical and managerial categories). While it: is important to alter the pre-service training to better provide practical knowledge and skills for future workers, in-service training is equally critical --since over 80 percent of the staff who will be providing services for the next 10 years are already working. This was the rationale behind the two IDA-assisted Family Health Projects' major emphasis on building in-service training capacity and linking it to supportive supervision. The other major element is management development, also provided for under the Family Health Projects. Furthermore, any decentralization and community involvement effort must first train managers and supervisors in the requisite knowledge and skills Personnel Management - This involves defining the work (jobs and job tasks), setting performance standards, and carrying out performance measurement, in addition to routine personnel actions (recruitment, promotions, transfers, etc.). This is a function which should be internal to the organization, but in Pakistan it suffers from a large degree of political interference. Unless this interference can be significantly reduced, there is little hope for any improvements in personnel management.

78 56 D. Conclusions and Recommendations Conclusions 4.57 The government health services in Pakistan are afflicted by a variety of management problems. Some of these problems are the result of outdated systems, and a "technical fix" would be an adequate remedy. However, many of the most serious problems arise from an excessive centralization of decision-making, an unfavorable governance situation and perverse incentives facing the system's actors. Thus, tinkering with organization structures and management systems at the margin is unlikely to lead to a significant improvement in the system's efficiency and responsiveness to its clients As the participants in the July 1996 SAPP II preparation workshop agreed, change in Pakistan's health system must be major and fundamental. There is as of now no consensus about what the nature of the change should be, and there is a need for a national debate on this issue. However, the discussion in several health workshops conducted in Pakistan in 1995 and 1996, and recent discussions in the context of the preparation of SAPP II, point to certain features for an improved health system. Decentralization of decisionmaking to the district level and below, and putting more stress on building partnerships with NGOs for the delivery of basic health services are two such features. Community participation in the health context is generally recognized as potentially very valuable, although difficult to organize (as acknowledged in this note). It is also generally recognized that human resource development in the health sector has been weak and needs to be assigned top priority. The fifth area of reform suggested above, namely the establishment of provincial and district Health Boards, is a new concept in Pakistan's context. It is suggested in this report as a tool to begin "opening up" the process of decision-making concerning government-financed health services to the wider civil society, and to improve the accountability of government health services to their public While the above types of reforms are pursued by the Provinces/areas, it would also be desirable to have a structured process for evolving a national consensus on the basic characteristics of the health sector Pakistan should have over the longer term (say years from now). This is an area where the government should take the lead, but a highly participatory process would be necessary --involving representatives from all major groups of stakeholders. The exact nature of the process cannot be prescribed in this report, but some elements to be considered for inclusion in the process are: (i) the formation of a stable national committee of highly regarded technical experts and politicians to guide the effort; (ii) the selection of a local academic or research institution to anchor the analytical work that may be required as a basis for formulating reforms; (iii) the selection of a foreign academic or research institution to backstop the local institution and help bring worldwide experience with health sector reform to bear on the process; and (iv) the use of pilot programs to demonstrate the benefits of certain types of reforms. Recommendations 4.60 Short to Medium Term a. Begin a process of changing the sector's overall organizational structure and relationships which recognizes and attempts to alter

79 57 the governance situation and the incentives facing the sector's actors. Specific actions recommended in this report include: i. Defining scenarios for the future and agreeing on a preferred one, as the basis for long-term health sector reform. ii. Pending (i) above, support the development of womendedicated health NGOs. iii. Also pending (i) above, establish district and provincial Health Boards. b. Involve communities in any feasible manner, but generally by first having them involved in defining their needs and planning services. c. Regardless of any agreed long-term scenario, decentralize the public sector organizations by comprehensive deconcentration to the district level, encompassing all three phases of management (planning, implementation and monitoring). This will facilitate community participation and a meaningful relationship with District Health Boards. d. Implement the in-service technical and management training and supportive supervision processes along the lines defined in the Family Health Projects, but add decentralization and community participation to all training, particularly management training. e. Revise the pre-service training curricula to better match the job requirements, particularly public health aspects, and ensure quality teaching/learning processes Long term a. After decentralization, focus on implementing internal, ongoing performance and quality improvement processes within the government health service organizations. b. Implement other reforms towards the preferred long-term scenario. 7' These would be similar to quality assurance programs now in place in a number of countries.

80 -58- CHAPTER V: FOSTERING THE DEVELOPMENT OF PRIVATE HEALTH SERVICES A. Private Sector Importance and Issues 5.01 In Pakistan, as in most developing countries, there is a thriving private health sector. It has already been noted in Chapter III that the great majority of people first consult private providers when they fall ill. There is, in principle, nothing wrong with this use pattern, except that --as also noted in Chapter III-- in Pakistan private consultations in many cases occur with untrained health care providers. Survey data also suggest that household expenditure on privately-provided health services and goods may be equal to about three times the amount of government health spending' (although, as noted in Chapter III, in many cases there is a complementarity of private and public expenditures, in the sense that private expenditures are incurred upon prescription from doctors in government facilities) The importance of the private health sector implies that public policy cannot be restricted to the public sector; the government must work with the private sector in order to foster the efficient development of private health services The public policy goal should be to achieve an optimal division of labor between the public and private health sectors. The nature of such division would change over time, depending on the state of development of the private sector and other factors At present, there would seem to be a consensus in Pakistan that the beneficial impact of private health services is diminished by a number of weaknesses, of which the most important are: (a) The generally low quality of care and widespread "quackery" (practice of medicine by people with little or no formal training).2 (b) Insufficient attention paid to preventive interventions. (c) The lack of functioning regulatory mechanisms to protect the consumer. (d) The poor education of most consumers concerning health matters (which is in part a reflection of poor education generally). This is a major cause of health market failure, as it results in consumers failing to distinguish between qualified and unqualified providers, and a weak effective demand for preventive interventions. 1/ Data from the 1991 Pakistan Integrated Household Survey (consumption section) suggest that expenditure of households on health goods and services in that year was equivalent to about 2.2% of GDP. 2/ The work for the preparation of this note included interviews with representatives of a number of professional associations. All of these groups' representatives indicated their concern about the poor quality of care provided to many Pakistanis, including unnecessary care, ineffective or even dangerous therapies, and outright malpractice.

81 -59- (e) The concentration of trained private providers in urban and periurban areas The development of the private health sector is also constrained by the low level of development of the health insurance industry. The lack of access to health insurance poses a major problem for the financing by households of privately-provided care for catastrophic episodes of illness or injuries Taking into account these weaknesses of the private health sector, public sector intervention at this point in time is required in a number of areas. The most important are: (a) Providing public goods, such as health education, consumer education, and any services conducive to a cleaner environment. 3 Financing should be largely from general revenues.4 (b) Providing health care services in localities not adequately served by trained private providers, with a focus on communicable diseases and maternal and child services. Financing should be a combination of government subsidy and user charges. (c) Providing for the treatment of catastrophic illnesses/injuries, when cost-effective interventions are feasible, in order to compensate for the insurance market failure. Financing should be a combination of government subsidy and user charges, but the scope for cost recovery would be limited (as a proportion of cost of treatment). (d) Forming partnerships with the private sector to improve the skills of private health sector personnel, improve the standards of health care, enhance attention to preventive care, and encourage a better distribution of private providers. (e) Encouraging and guiding the development of the health insurance industry Over time, as the trained private health sector in Pakistan becomes stronger and expands its reach into the rural areas, and as the health insurance industry develops, the public sector's role in (b) and (c) above should gradually decline. On the other hand, the public sector should have a permanent role in (a), (d) and (e), although the contents of these interventions would change over time This chapter makes some suggestions concerning possible avenues for addressing private health sector weaknesses. It is hoped that these suggestions would serve as a point of departure for a more active discussion in Pakistan concerning public policy towards the private health sector. A 3/ "Providing" does not necessarily mean that the services would be produced directly by government employees. In certain cases the services could be produced by private contractors (including NGOs), with the government arranging for this to happen, and paying for all or part of the cost. This is also true for (b) and (c) below. 4/ User fees could be charged for some services such as garbage collection.

82 -60- common thread for the suggestions advanced in this report is that a stronger partnership needs to be developed between the public and private sectors in the health area. B. Addressing Constraints Through Public/Private Partnerships Improving the Level of Skills of Private Health Personnel 5.09 A first type of intervention for improving the quality of private health care would be improving the level of skills of private health personnel. This, in turn, could be accomplished by improving pre-service training of health personnel and by improving continuing education Pre-service training, for both those who end up working in the private sector as well as the public sector, is mostly carried out in government institutions, although some private training institutions also exist. There is consensus in Pakistan that pre-service training has many weaknesses; for example, the education of doctors tends to emphasize the treatment of complicated illnesses rather than the more common health problems most of them will have to deal with in practice. Also, nursing and other paramedical training should have a much higher priority than has been the case, as a long-term strategy to reduce the cost of health services. A detailed analysis of the problems in pre-service training of health personnel exceeds the scope of this note. However, this is clearly an area in need of further work and greater government attention, in close consultation with the private sector Improving pre-service training is important for the future quality of services; however, it would not address the shortcomings of the current stock of health workers. For the latter, a greater effort is needed in terms of continuing education. The most promising channel for such an effort are the professional associations. 5 Most of these associations have already launched their own continuing education programs for their members, funded from dues or direct user charges for the seminars and other educational programs they offer. These efforts should be encouraged by the government. One form of government support could be the inclusion of continuing education activities by professional associations in future foreign-aided projects, which could be a suitable vehicle for technology transfer in this area. Another form of support could be for the government to link (via legislation) the successful completion of continuing education courses to the revalidation of the licenses of private practitioners (see below). Licensing Health Care Practitioners 5.12 The government could pass legislation enabling the professional associations to manage the licensing of health care practitioners. This activity could then be linked to continuing education. For example, the Pakistan Society of Family Physicians could be empowered to: (a) establish the 5/ A number of these associations were interviewed for this report, including the Pakistan Medical Association, the provincial Colleges of Family Physicians in Lahore and Karachi, the Dental Association, the Nursing Association, the Association of Paraprofessional Workers, the Private Hospital Association, the Christian Hospital Association, and the Druggists and Wholesale Chemists Association.

83 -61- requirements that would have to be met for someone to be licensed as a family physician; (b) run continuing education programs whose successful completion would be required to continue to hold a license to practice; and (c) take steps to sanction those who continue to practice without a valid license. Sanctions could take the form of fines or other measures enforced through the courts, or (more realistically, in view of the weaknesses of the justice system) by making the names of infractors readily available to the public. General practitioners in good standing (i.e., with a recognized degree, and having taken and passed the required continuing education courses) would be "certified" as such by the association, and this information would also be readily available to the public. Introducing Independent Accreditation of Health Facilities 5.13 A third possible avenue to improving the quality of private health care would be the introduction of a mechanism for the independent accreditation of private clinics and hospitals.6 To this effect, an independent accreditation entity would have to be established. Safeguards would be needed to ensure the integrity of the process; for example, the accreditation entity could include representation from major foreign hospitals or universities Accreditation, if credible, could be a powerful force for improving quality of care. Private hospitals and clinics would be asked to submit voluntarily to the accreditation process. Since they compete against each other, they would have an incentive to get accreditation. This would be especially so once the public (and insurers, once the insurance industry is better developed) became familiar with the system. Competitive pressures towards accreditation would also extend to government hospitals if they had to depend to a significant extent on selling their services for their financing Since accreditation would be voluntary, it is likely that no new legislation would be needed to put it into effect. The public sector could assist the process of establishing accreditation by working with interested parties in the private sector to organize the accreditation process. Some technical assistance may be needed to define accreditation procedures. Also, since there would be some costs involved, it would be necessary to determine how the accreditation work would be financed. Enhancing Attention to Preventive Care 5.16 It is generally acknowledged in Pakistan that private health care providers do not pay sufficient attention to preventive care. This is in part because of a curative bias in medical education, and in part because private demand for preventive services is weak among the bulk of the population Addressing the first cause should be part of efforts to improve both pre-service and continuing education of health care providers. Addressing weak private demand is a longer term proposition. Improvement of the general level of education of the population, and especially of women, is one key factor. A more pointed intervention would be public campaigns of 6/ This suggestion was made in the USAID-supported report on Policy Options for Financing Health Services in Pakistan, prepared by Abt Associates Inc., September No follow up to the recommendations of this report has taken place.

84 -62- health education highlighting the importance of preventive services. The combination of these interventions would lead over time to stronger private demand for preventive health services. In the meantime, preventive services should be aggressively promoted by the public health services. Improving Consumer Protection 5.18 The task of improving consumer protection in the health area can be divided, for the sake of discussion, into two subtasks: (i) improving consumer protection from malpractice and fraud committed by health care providers who have completed the relevant professional training; and (ii) protecting consumers from malpractice and fraud committed by untrained practitioners Trained Health Care Providers. Consumer protection would improve with implementation of the above suggestions concerning licensing and accreditation. These tools for consumer protection would to a large extent rely on market forces to exert their influence. Consumers already have recourse to the courts in case of fraud and malpractice, although the consensus in Pakistan seems to be that the courts cannot be relied upon to resolve such cases in a fair and efficient manner The public sector also operates some regulatory entities in the health sector. For example, the provincial Departments of Health employ drug inspectors to inspect pharmacies and take samples of medicines which are tested in provincial drug testing laboratories. Cases of violation of existing rules for selling of pharmaceuticals are referred to the Drug Quality Control Board in each province. These boards are composed of experts from the medical and pharmaceutical fields and chaired by the Secretary of Health. The boards may prosecute the violators or take administrative action, such as issue a warning or cancel or suspend licenses. By all accounts, however, public sector regulatory mechanisms are not doing a good job. This is in part due to inadequate resources allocated to the task; the presence of corruption was also mentioned in many of the interviews with the private sector as an important factor Untrained Health Care Providers. The most promising strategy for improving consumer protection vis-a-vis untrained health care providers would seem to be public campaigns to educate consumers. The public sector should take the lead in this respect, but the professional associations could also assist in this effort. It would be unrealistic to expect, however, that public attitudes about untrained providers would change overnight. Improvement of the general level of education of the population would also help consumers to make more informed choices about different types of health care providers. Fostering the Development of the Insurance Industry 5.22 Availability of health insurance has been very limited so far. The major system is that of the Employee Social Security Institutions (ESSIs), which provide health insurance coverage to lower-income employees in the private sector. 7 The ESSIs are quasi-public, operate under government ordinances, and are managed as autonomous organizations at the provincial 7/ Government employees are entitled to health benefits as part of their compensation.

85 -63- level. They are funded entirely by a contribution from employers equal to 7 percent of salary. Government regulations require that establishments with more than 10 employees register for ESSI coverage any worker earning less than Rs. 3,000 per month (about US$75). More than 500,000 employees (mostly urban) are registered.8 The ESSIs run their own network of health facilities and also pay for some types of care in private and public facilities Several private insurance firms sell indemnity-type, third-party health insurance coverage. Authorization to start such insurance schemes is required from the Commissioner of Insurance. Most existing packages cover hospitalization services, particularly surgical procedures and related diagnostic services. They offer a certain coverage up to a stipulated limit for various types of medical interventions. This type of insurance is mostly purchasied by private firms for their employees; typically, before buying insurance, the firms were contracting directly with various health care providers. Indemnity insurance products now in the market benefit mainly the better-off. Present premiums generally range between Rs. 3,000-4,000 per enrolled person per year (US$75-100), with premiums varying according to age and gender and health care consumption history Development of the health insurance industry would be an important boost for the private health sector in Pakistan. One possibility would be to expand the ESSI system, by for example allowing self-employed persons to enroll voluntarily Another possibility worth considering would be for the provincial governments to sponsor a pilot project with the private sector to develop health-maintenance organizations (HMOs). In this model of health insurance, households which become members of an HMO pay a set fee per month and are entitled to free services within a defined "package" at the designated facilities owned and operated by the HMO. In other words, the HMO is both insurer and provider of services. Likely clients for HMOs may include employeles of private firms not covered by the ESSI system (i.e., employees in firms with less than 10 employees, or employees in firms with more than 10 employees who earn more than the ESSI limit of Rs. 3,000 per month). Since many private firms (and parastatals) already have some form of health care benefit for their workers, these employers may be willing to pay all or part of the HMO fee. Self-employed workers with steady incomes may also be a market for HMOs The direct benefits from development of the health insurance industry would accrue mostly to better off-households. However, poorer households could also benefit indirectly. This is because such development would enable a greater proportion of the population to purchase a broad range of health services privately, including care for catastrophic illnesses or injuries. Since fewer people would then resort to government health providers, development of the health insurance industry should release government revenues which could be applied to improving health services for poorer households with no access to health insurance. An important caveat is that, for the full savings in government revenues to materialize as more people make use of private providers, the government must be ready to downsize its own capacity for providing health services. This would mean the closing of certain facilities and reductions in personnel. 8/ Assuning six dependents on average per worker, this would give a total of about 3.5 million people covered, or about 2.5 percent of total population.

86 As the health insurance industry develops, it will be important for the government to build up its capability to regulate the industry. Hence this is another suitable area for public action complementary to private sector development. Support for capacity building in this area may be a suitable component for future foreign-aided projects, as there would be a substantial element of technology transfer involved. Contracting With Private Entities for the Delivery of Government-Financed Health Services Another type of public/private sector partnership that deserves attention is the contracting of private providers to deliver governmentfinanced health services. In Chapter IV, it was recommended that the Government expand its efforts to provide incentives for the creation and expansion of health NGOs. It was further suggested that special emphasis should be given to assisting the development of NGOs operated and staffed by women and focussing on maternal and child health care. But public/private partnerships of this type need not be restricted to NGOs. The possibility of establishing partnerships between government and non-ngo private health care providers should also be explored One model that merits consideration would be the contracting by government (provincial Departments of Health) with a professional association of private physicians --such as the Pakistan Society of Family Physicians-- to provide a basic package of primary health services (with a strong focus on health education and other preventive interventions) to an identified population, on a prepaid capitation basis.9 It is recommended that the provincial governments consider starting pilot projects to this effect, possibly targeted to urban slum populations. The contracts would have to ensure that a suitable number of the providing physicians are women (so as to be able to interact effectively with women patients and their young children), and that the physicians are complemented by an adequate cadre of nurses/midwives and back-up diagnostic facilities. Suitable performance criteria should be provided for in the contracts, together with arrangements for independent monitoring of compliance with contractual obligations, including ensuring acceptable quality standards. It would also be important to ensure that the communities benefiting from the scheme are actively involved in its governance. Other possible partners the government may consider include private "maternity homes" (which are found in most district headquarters and really serve rural women), and private health care organizations built around ethnic/religious groups (e.g., Parsis, Ismaelis, etc.). C. Conclusions and Recommendations 5.30 Survey data indicate that in Pakistan there is a thriving private health care sector. This is a reality that public policy must acknowledge. The government needs to work with the private health sector in order to foster its efficient development. The public policy goal should be to achieve an optimal division of labor between the public and private health sectors. 9/ I.e., the professional association of physicians would receive a fixed fee from the government per person covered per year. The association would subcontract with a set of their members, and other required personnel, for the provision of the contractual services.

87 Private health services are diminished in their beneficial impact by serious deficiencies in the quality of care provided and insufficient attention paid to preventive interventions. A large portion of the public is purchasing health services from providers who have not been trained to do this work. Qualified private health care providers are absent in many rural areas. While regulatory mechanisms have been set up in the public sector to protect consumers, the consensus seems to be that they are not effective This chapter has made a number of suggestions to address the weaknesses of the private health sector and facilitate its development. Each of these suggestions involves the formation of some sort of partnership between the public and the private sectors. To summarize, we have suggested that the following initiatives be considered: (a) Active encouragement by the public sector of the continuing education work being carried out by various professional associations of health care providers. (b) Empowerment of professional associations to manage a system of licensing/certification for health care practitioners. (c) Introduction of a voluntary accreditation system for private clinics and hospitals. (d) Enhancement of attention to preventive care in private health care transactions through measures operating on both the supply side (correcting the curative bias of medical education) and the demand side (better informing the public about the benefits of preventive care). (e) Public campaigns to educate consumers about the dangers of seeking help from untrained health care providers, and to help consumers to identify various categories of providers. (f) Initiatives to foster the development of the health insurance industry, including allowing the self-employed to enroll in the ESSI system, a pilot project to develop health-maintenance organizations, and capacity-building work to strengthen the government's regulatory capabilities in health insurance. (g) A pilot project for provincial governments to contract with an association of private physicians for the provision of basic health services to a targeted urban slum population on a prepaid capitation basis. Other modalities could be developed for contracting with other private sector partners such as maternity homes and health services built around religious/ethnic groups.

88 PAKISTAN TOWARDS A HEALTH SECTOR STRATEGY ANNEXES

89 PAKISTAN 1 ANNEX' 1- SUMMARY OF MA:IN RECOMMENDATIONS - TOWARDS A HEALTH SECTOR STRATEGY I I I I I I I I I I I POLICY AREAS MAIN RECOMMENDATIONS REMARKS A. GOVERNMENT HEALTH SERVICES A.1. Service Priorities A.2. Cost Recovery A.3. Tertiary Hospital Autonomy *The govemment should seek to achieve a sharper focus on service priorities, both in terms of resources and of management focus. *Govemment health services should seek to complement, rather than crowd out, private health services. ^Top priority should be given to: (i) health education, in such areas as nutrition, creafing greater awareness of the importance of immunization and other preventive interventions, teaching basic hygiene practices, informing about AIDS and other sexually transmitted diseases, and producing better educated health consumers; (ii) control of communicable infectious diseases: and (iii) maternal and child health services including family planning, pre- and post- natal care,deliveries by trained health workers, and management of the sick child, especially for diarrhea, respiratory infections and malnutrition. For (ii) and (iii). greater priority should be given to the rural areas, where trained private providers are often not available. ^The govemment should reconsider its cost recovery policy with a view to increasing the percentage of costs recovered through user charges. *Additional proceeds from enhanced user charges should accrue to collecting facilities as incremental resources. *Any changes in cost recovery policy should be preceded by careful analysis, and perhaps piloted first in a few districts. *The trend towards tertiary hospital autonomy should be encouraged by the govemment. ^See Section III.E *it should be possible to deliver most of the top priority services through frontline first-care health facilities linked to I community-based health workers and backed by lean referral services in secondary hospitals. _ *See Section III.G *See Section III.H *But care should be exercised in the selection of the goveming boards, and the J l I I granting of autonomy should be accompanied by the introduction of a performance l =agreement. lll - -- l l *To forestall undesirable equity effects, the govemment contribution to the budgets of l l the autonomous hospitals should be earmarked for subsidizing consumption of I I services by the poor.

90 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY ANNEX 1- SUMMARY OF MAIN RECOMMENDATIONS Page2 2 POLICY AREAS MAIN RECOMMENDATIONS REMARKS A.4. Improving efficiency and man ement of govemment health servicesl (a) Priorities Among Types of nputs 'The establishment of new govemment health facilities and upgradation of existing ones should be kepto a minimum for the next several years, and it should be subject in each case to suitable criteria related to expected utilization and other relevant factors. *Poorly located health facilities which have not been made operational should not be made operational as health facilities. The govemment should study the potential for rationalizing hospital inpatient facii ties in view of low utilization rates in man govemment hospitals. *Priority in the allocation of incremental resources available to the health authorities should be given to providing for more adequate non-salary inputs for existing facilities. *See Sections III.E and III.F _ *Generic drugs should be emphas'zed as opposed to branded drugs. _ l *Provision of additional staff for existing facilitieshould be restricted to redressina_ imbalances, particularly increasing the number of female paramedics. 'For other categories of staff, vacancies should not be filled automatically, but the continuing need for the positions should be examined first. In particular, the categories of general medical officers and non-technical support staff would appear to deserve close scrutiny. (b) Periodic Programs Review *The govemment should undertake periodic in-depth reviews of their ongoing health l programs in order to assess their continuing need and the adequacy of program _ ldesign..the school health program is an example of a govemment program in need of being redesigned. * See Annex 4 (c) Decentralization of Management *The process of decentralization of management of govemment health services ISee Section IV.C to the district level and below, already initiated within provincial/area. L I l Departments of Health, should be continued and deepened. l l_l

91 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY ANNEX 1 - SUMMARY OF MAIN RECOMMENDATIONS Page 3 _ POLICY AREAS MAIN RECOMMENDATIONS REMARKS (d) Health Boards 'Establish Health Boards at the provincial and district levels, with broad representation from users of govemment health services and the private and public health sectors._ *See Section IV.C _ ~~~~~~~~~~~~~~then evolve over time towards incorporating a sector planning function, with real aufrty ovrihe aliocalion od govetnment resources within their respectve areas. *he Health Boardscudeetal,eoeprhaigatoiisfralhat services within a given area (probably the district level).iii (e) Community Involvement *The government health services should seek to involve the communitbes in the planning, management and support of service facilities. l l *Community representatives should be broadly representatve of the various social and l l ethnic strata in the community. ll_ 1 *See Section IV.C *The formula for implementing community participation must be worked out and it could vary by province and even within provinces. Different approaches could tried in the form of pilot projects. ~~~~~be (f) Contracting with NGOs I *The government should expand its efforts to support the development of health NGOs. *See Section IV.C I I I^*It is suggested that the government focus its assistance on NGOs which are staffed I I I Iand managed by women and whose focus is on the health of women and children. (g) Human Resource Development I I _ l l *Implement the in-service technical and management training and supportive supervision processes along the lines defined in the Family Health Proiects, but add *See Section IV.C l l l decentralization and community participabon to all training, particularly for managers. l I I I _ l l l *Personnel management should focus more on setting standards and assessing l_l I I I o erformance of staff in government health services. l l_l_i I i *Political interference with personnel management should stop. I_ I l I _I

92 PAKISTAN - TOWARDS A HEALTH SECTOR STRATEGY ANNEX 1 - SUMMARY OF MAIN RECOMMENDATIONS ; Page 4 _=_._= POLICY AREAS MAIN RECOMMENDATIONS REMARKS B. PRIVATE HEALTH SERVICES B.1. Continuing Educa ion *The government should actively encourage the continuing education work being carried *See Chapter V. out by various professional associations of health care providers. One form of support The recommendations could be the inclusion of continuing education activities by professional associations in this section refer in future intemationally-assisted proojects, which could be a good vehicle for to various types of technol transfer in this area. partnerships between. the public and the B.2. Licensing/Certification *Empower the professional associations to operate a system of licensing/certification private sectors.._ for health care pracitioners. B.3. Accreditation *Support the introduction of a voluntary accreditation system for private clinics and I hospitals. I I I B.4. Preventive Focus *Seek to strengthen the preventive focus of pdrivate health care services through measures l I.on the supply side (correcting the curative bias of medical education) and the demand lside (public campaigns to inform the public about the benefits of preventive care). _ o B.5. Consumer Education *Organize public campaigns to educate consumers about the dangers of seeking help from untrained health care providers, and to help consumers to identify various categories of providers. B.6. Health Insurance *Examine possible initiatives to foster the development of the health insurance industry (e.g., allowing the self-employed to enroll in the ESSI system, a pilot project to develop health-maintenance organizations, strengthening the regulatory capability lin health insurance). B.7. Contracting With Private Sector *The provincial governments should consider organizing pilot projects to contract with 9 associations of private physicians for the provision of basic health services to a _targeted urban slum population on a prepaid capitation basis. Other modalities could be developed for contracting with other private sector partners, such as maternity homes and health services built around religious/ethnic groups.

93 -71 - Annex 2 Pakistan - Towards a Health Sector Strategy Bibliography Abt Associates Inc. (1993). Policy Options for Financing Health Services in Pakistan. Report commissioned by USAID. Bethesda, Maryland, USA. Mimeo. Alderman, Harold and Paul Gertler (1989). The Sustitutability of Public and Privatie Health Care for the Treatment of Children in Pakistan. World Bank Living Standards Measurement Study Working Paper No. 57. Washington, D.C (1996). Family Resources and Gender Differences in Human Capital Investrments: The Demand for Children's Medical Care in Pakistan. In "Intrahousehold Resource Allocation in Developing Countries: Methods, Models and Policy", edited by Lawrence Haddad, John Hoddinott and Harold Alderman, Johns Hopkins University Press, Ali, Shaukat (1994). Incidence of Taxes and Transfers in Pakistan. Finance Division, Islamabad. Mimeo. Asian I)evelopment Bank (1996). Appraisal Report for the Social Action Program (Sector) Project II. Report No. PAK Manila. Balochistan Department of Health (1996). Provincial Feedback Report of the Health Management Information System for First Level Care Facilities, first quarter Brenzel, Logan and Akbar Zaidi (1996). Methods for the Cost Study of Health Services in Pakistan. World Bank, Washington D.C., mimeo. Collins, Charles (1994). Management and Organization of Developing Health Systems. Oxford University Press, New York. Dataline Services (Pvt.) Ltd. (1996). Report of the Health Focus Groups Discussions. Islamabad, mimeo. Federal Bureau of Statistics (1996). Report of the Pakistan Integrated Household Survey, Islamabad. Government of Pakistan (various years). Provincial and federal budget documents (various years). Operational Plans of the Social Action Program Project for the federal Ministry of Health and provincial/area Departments of Health (1996). Economic Survey 1995/96. Islamabad (1996). Planning Document for the Social Action Programme Project II ( ). Planning Commission, Federal SAP Secretariat, Islamabad. Mimeo (1996). Draft Report of Chief Ministers' Committee on SAPP II ( ). Planning and Development Division, Federal SAP Secretariat, Islamabad. Mimeo.. Griffin, Charles C. (1992). Health Care in Asia. World Bank Regional and Sectoral Studies. Washington D.C.

94 -72 - Hammer, Jeffrey (1996). Economic Analysis for Health Projects. World Bank Policy Research Working Paper No Kress, Daniel H. and William Winfrey (1997). Pakistan Private Sector Population Project: Contraceptive Demand and Pricing Study. The Futures Group International UK, mimeo. Ministry of Health (1995). Situation Analysis of Health Sector in Pakistan. Islamabad. Ministry of Health and WHO (1993). Utilization of Rural Basic Health Services in Pakistan. Islamabad. Multi Donor Support Unit to the Social Action Program (1995). SAP Sector Statistics, 1992/93 to 1995/96. Islamabad, mimeo (1996). Report of the SAP II Preparation Workshop for the Health Sector, July Islamabad, mimeo. Musgrove, Philip (1996). Public and Private Roles in Health: Theory and Financing Patterns. World Bank, Human Development Department, mimeo. Pakistan Medical Research Council (1996). Preliminary Report of the National Health Survey of Pakistan. Islamabad, mimeo. Pinto, Rogerio et al. (1994). Projectizing the Governance Approach to Civil Service Reform. World Bank, Washington D.C. Planning and Development Departments of Punjab, Sindh, NWFP and Balochistan; Federal SAP Secretariat, Planning and Development Division; and Multi Donor Support Unit to SAP (1996). SAPP Field Review, February-April Islamabad, mimeo. Planning and Development Division (1984). Evaluation of the Rural Health Program in Pakistan. Islamabad, mimeo. Politzer, Robert et al. (1992). Commentary: The Traditional Public Health Approach to Prevention and Risk Reduction. American Journal of Preventive Medicine, Vol. 8, No.6. Population Council (1995). 1994/95 Pakistan Contraceptive Prevalence Survey. Islamabad. Punjab Department of Health (1995). Provincial Annual Feedback Report of the Health Management Information System for First Level Care Facilities. Lahore. Spohr, Mark (1997). Pakistan Burden of Disease Working Paper. World Bank, Washington D.C., mimeo. The Futures Group International. Essential Drug Supply in Pakistan at the Primary Level. Annex IV of Report on Public/Private Partnerships. Draft dated July 15, Washington D.C. Tinker, Anne (1997). Improving Women's Health In Pakistan and Saving Lives. World Bank, mimeo. Washington D.C. World Bank (1993). World Development Report 1993, Investing in Health. Washington D.C.

95 (1993). Pakistan Health Sector Study: Key Concerns and Solutions. Report: No PAK (1994). Staff Appraisal Report of the Pakistan Social Action Progranm Project. Report No PAK (1995). World Development Report Washington D.C (1995). Pakistan Poverty Assessment. Report No PAK (1995). Staff Appraisal Report of the Pakistan Population Welfare Program Project. Report No PAK (1996). Staff Appraisal Report of the Pakistan Northern Health Program Project. Report No PAK.

96 Pakistan - Health Sector Strategy ANNEX 3 - BURDEN OF DISEASE ESTIMATES Availability of Data on Pakistan Health Pakistan does not routinely collect information that could be used for burden of disease calculations. There is no systematic recording of birth and death statistics with consistent accurate health information. Government health service statistics collected through the HMIS are not very useful for gauging the extent of disease. "Disease specific" programs that monitor and treat specific public health problems do collect some useful information for their area of responsibility. The other health data that exists is from various health surveys and studies which have been performed by in -country organizationsuch as the Pakistan Medical Research Council and studies that have been performed by various aid agencies. These studies, even if they are of good quality, have not been designed to collect the disease incidence informatio necessary for a burden of disease calculation and therefore are of limited usefulness. Fortunately, one of the largest and best quality health surveys that has been conducted is available. It is the National Health Survey of Pakistan (NHSP) which is a statistically well controlled health survey questionnaire and examination. National Health Survey of Pakistan Data The National Health Survey of Pakistan was conducted by the PMRC and the Federal Bureau of Statistics, with technical assistance from the National Center for Health Statistics of the U.S. Government. It is a large, well designed survey that consists of a health survey, medical examination, and laboratory component. It was not designed to collect information for a burden of disease study but it does contain information that can be used for these purposes. Since the survey was not designed with the burden of disease calculation in mind, the diseases covered do not include all of the most prevalent diseases and the questions asked do not necessarily elicit the incidence, age, and disability information required for the BoD study. The National Health Survey Pakistan (NHSP) was used for the largest proportion of data in the BoD study. Statistical Significance of Data The survey consists of a total of individuals which were selected from demographic sampling units to reflect the overall population of Pakistan. The households selected for the survey were taken randomly from representative demographic units throughouthe country. As such, the survey is an accurate reflection of the urban, rural, provincial, and male/female composition of the country. The completion rates for the survey are excellent, with the frequency of non responders in most cases less than 5%. The result of this is that the survey contains very accurate information for the questions that were asked.

97 Because of the relatively large sample size, the data is significant at the 95% confidence level for questions that have a positive response rate of as low as 0.05 % of the population (corresponding, where relevant, to an incidence of 50 per 100,000.) Incidence of chronic diseases The main limitations are in the calculation of the incidence of chronic diseases. Many of the questions in the survey yield prevalence data. However, for many chronic diseases, the survey asked "How old were you when you were told you had this disease?" For these questions, we were able to calculate an incidence for chronic diseases as well as a prevalence. In calculating the incidence, we used the difference between the patient's present age and their reported age when diagnosed. The number of people who were told one year ago, two years ago, etc. leads to an annual incidence. We feel this method yields an acceptable estimate of the incidence of these chronic diseases. Incomplete Data in NHSP Most of the data in the NHSP is accurate with a high percentage of completion. There are, however, a few crucial areas where the data are presently incomplete. The following areas of data are importanto the disease burden study. Data has been collected by the NHSP in these areas. However, the data are currently incomplete, and were not available for the burden of disease study. Malaria The study did collect malaria blood smears from most participants. However, these have not been read and checked to the satisfaction of the study directors and so this data were not available at the time of this study. Hepatitis The study did collect whole blood for hepatitis serology. However, the assay technique used gives an unacceptably high percentage of false positives with whole blood. The PMRC investigators are considering alternative assay techniques to obtain more accurate results for this important parameter and hopefully this data will be available in the near future. Important Disease Categories in Need of Better Information The survey is not all inclusive and was not designed to collect information for a BoD calculation. For the calculation of the BoD, we need to have incidence data for all diseases that have a significant disease burden. The following disease categories are important for the calculation of the BoD. However, the NHSP does not contain data that would allow determination of the incidence of these diseases: Tropical cluster These diseases are, in general, of low incidence and correspondingly low disease burden in Pakistan. Malaria data were collected in the survey and should be available fairly soon.

98 Sexually transmitted diseases (Including HIV) The survey contains no information on these diseases. It is difficult in any culture to collect accurate information on this category of disease and the survey did not attempt to ask about this highly sensitive topic. Perinatal Causes The only survey questions dealing with perinatal causes were several questions asking about the color and weight of the last child delivered. These are non-specific and were asked by lay people of lay people. It is difficult to impute neonatal conditions from them. Maternal conditions The questionnaire contained several non-specific questions regarding problems with the last pregnancy. These were not useful in formulating a disease burden. Malignant neoplasms The survey does not contain information on neoplasms. It is difficult to collect this information from patients due to the highly technical nature of the diagnoses. Better information can be obtained from a comprehensive tumor registry or death records which are filled out by trained medical personnel, neither of which currently exists in Pakistan. Neuro-psychiatric Epilepsy, psychoses, drug dependence, alcohol dependence, and dementias are important categories that need better data since they may be important sources of disease burden and in some cases are amenable to disease control programs. Cardiovascular It was difficult to use the information in the NHSP to formulate cardiovascular disease incidence information. The NHSP does not contain significant information on cardiovascular disease. This is an important disease category and additional efforts should be made to improve the quality of data available for ischemic heart disease, hypertension, inflammatory cardiac disease, and cerebrovascular diseases. Chronic respiratory disease The NHSP contained several questions about chronic cough and shortness of breath but these are non-specific and could not be used to impute respiratory disease. This is an important disease category that needs improved information. The incidence of emphysem and bronchitis have important public health implications for smoking, pollution, and industrial health programs.

99 Additional Sources of Data for Burden of Disease Study Tuberculosis TB control program STDs STD control program Studies of HIV prevalence in approximately 1.3 million blood donors and clinic patients have uncovered approximately 1000 cases in the entire country. This corresponds to a prevalence of approximately 70/100,000. It is difficult to calculate incidence from this but it is probably less than 20% of the prevalence. Malaria Malaria control program Published Data Pakistan has a medical community that is fairly active in medical research and publication. It was difficult to assess the quality of the research in the published papers and most of the research that we could find was difficult to translate into information useful for the BoD calculation. The research that we were able to locate was used to corroborate information from other sources. Consultation with Pakistani Academic Clinicians A workshop was held with Pakistani clinicians. This provided valuable information to fine tune the age of onset and duration of disability calculations. WHO Published Data The data published by the WHO in "Global Comparative Assessments in the Health Sector" was used as a reference and back up data source.

100 Disease Burden Report Date: 01122/97 Area: Pakistan Disease Category Incidence DALY Percent /100,000 /100,000 of DALY Communicable, maternal and perinatal Infectious and parasitic diseases Tuberculosis , Diarrhoeal diseases 169, , Meningitis 1, Hepatitis 1, Leprosy Trachoma Intestinal helminths 82, Other Infectious and ParasXtic diseases Malaria 2, , , Respiratory infections Acute lower respiratory infection , Acute upper respiratory infection 20, Otitis media 14, , , Maternal conditions Hemorrhage - Pregnancy Sepsis - Pregnancy Abortion 1, Complications of Pregnancy , , Perinatal causes Perinatal causes , , Sexually transmitted diseases Syphilis 10, Gonorrhoea 25, HIV infection Chlamydia 7, Pelvic inflammatory disease 4, , Childhood cluster Measles 24, Pertussis 13, Poliomyelitis Diphtheria Tetanus , , , Tropical cluster Leishmaniasis Lymphatic filariasis , , Non-communicable Malignant neoplasms Other malignant neoplasms , , Diabetes mellitus Diabetes Mellitus Nutritional/endocrine Anemias 4, Protein-energy malnutrition 10,

101 Disease Burden Report Date: 01/22/97 Area: Pakistan Disease Category Incidence DALY Percent /100,000 /100,000 of DALY Iniuries Iodine deficiency 4, Vitamin A deficiency , , Neuro-psychiatric Other neuro-psychiatric Epilepsy Sense organ Cataract-related blindness Cardiovascular disease Other cardiovascular diseases Rheumatic heart disease Ischemic heart disease , Cerebrovascular disease Inflammatory cardiac disease Hypertension , , Chronic respiratory disease Other chronic respiratory disease Chronic obstructive lung disease Asthma , Diseases of the digestive system Other diseases of the digestive system Peptic ulcer disease Cirrhosis of the liver Haemorrhoids , , Genito-urinary Other genito-urinary 3, Nephritis/nephrosis Benign prostatic hypertrophy UTI 16, Skin diseases 20, Skin disease 1, , Musculo-skeletal system Rheumatoid arthritis Osteoarthritis Other musculo-skeletal system 2, , Congenital abnormalities Congenital abnormalities , Oral health Unintentional , Dental carries 3, Peridontal disease 22, , , , Other unintentional 3, , Road traffic accidents

102 Disease Burden Report Date: 01/22/97 Area: Pakistan Disease Category Incidence DALY Percent /100,000 /100,000 of DALY Intentional Poisoning Falls 2, Fires Occupational , , Self-inflicted Homicide and violence War , , Totals 550, ,586

103 -81 - ANNEX 4: School Health Program Background 1. The school health program was established in 1987, at a time when government was under political pressure to create jobs for newly graduated doctors. The idea was to post doctors in schools to provide health services. However, the exact role and functions of these doctors was not thought through clearly. No job descriptions were developed and practically no funds were budgeted other than for doctors' salaries. In fact, few of the doctors have done any work in schools since the start of the program. Most of the doctors in the school health program are currently working in government hospitals and other government health facilities. Analysis 2. Several roles/functions have been suggested for the doctors in the school health program: immunization, growth monitoring, health screening and health education. An analysis of whether these are appropriate functions for doctors to perform in schools follows. 3. Immunization. Childhood immunizations are an important means of preventing childhood disease. Standard immunization practice calls for DPT, OPV and BCG as a series that is best completed within the first year of life. A DT booster is recommended at age 5 and every 10 years thereafter. 4. In the United States and many other countries, all children entering school are required to submit proof that they have received all immunizations. This is largely a clerical function on the part of the schools. Immunizations are generally not administered in schools. 5. It is difficult to see how child immunization would fit into a school health program. Children should have received all of their immunizations by age one. By age five, when they enter school, children have passed their greatest risk for these diseases. It is recommended here that all children be required to have their immunizations before entering school. However, due to problems with the cold chain and logistics, it is not recommended that children receive immunizations in school. 6. Growth Monitoring. The best indicator of child health and nutrition is growth. Child growth is measured by weight, head circumference, and height. There are well established norms for child growth, and children who fall below the 25th percentile should be targeted for special attention. The most critical period of child growth is the first three years of life. This is the time when the greatest relative increase in size and functional development of major body systems takes place. It is also the time when intervention (in the form of nutritional supplements, changes in diet, etc.) is most effective. By the time children enter school, most of the damage from malnutrition is irreversible. 7. Therefore, growth monitoring and nutritional intervention are most effective during the first three years of life. A school health program to perform these functions would be too late to have any significant effect on child h(ealth. It is not recommended that schools undertake to provide a growth monitoring function. 8. Health Screening. General health screening can discover some congenital and developmental problems. Some of these are amenable to specialist treatment to mitigate their ill effects. However, the incidence of these

104 -82 - problems among school-age children is generally low. At any rate, general health screening of school children could be carried out in government clinics, which would be a more appropriate setting for such activity. 9. Health Education. Health education covering topics such as sanitation, hygiene, clean water, proper nutrition, and (for older children) drug abuse and STD/AIDS avoidance is important and very cost effective in preventing illness. However, education is best done by teachers. Doctors are not trained educators and they are not trained in health education curriculum. Use of doctors for health education is not a good use of their skills. It is not recommended that doctors undertake to provide health education in the schools. Conclusion 10. The above analysis fails to find any appropriate role for doctors in schools. While a strong program of health education in the schools would be a high priority, it should be conducted by the teachers themselves.

105 PAKISTAN TOWARDS A HEALTH SECTOR STRATEGY ANNEX 5 GOVERNMENT HEALTH EXPENDITURE

106 Table 1 PAKISTAN - TOTAL GOVERNMENT HEALTH AND POPULATION WELFARE EXPENDITURE, 1991/92 TO 1997/98 Revised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/98 Figures in Rs. Million _ 1991/ / / / / / /98 1. Federal Ministry of Health _ 1.1.Current Development Total Northern Areas 2.1. Current Development Total I I 3. Azad Jammu and Kashmir 3.1. Current Development Total FATA 4.1. Current Development Total Punjab 5.1. Current Development Total Sindhi 6.1. Current Development Total NWFP 7.1. Current Development Total II Balochistan 8.1. Current Development Total Total Government Health Expenditure 9.1. Current Development Total Ministry of Population Welfare GDP at Market Prices Total Government Health Expenditure I as a Percentage of GDP Population Welfare Expenditure as a Percentage of GDP Notes: (a) From I993/94 onwards, the development expenditure figures include an estimate of expendtures financed with Foreign Project Assistance. I I i I (b) The figures in this table do not include health expenditures of local governments.l Such information is not readily available in Pakistan. Sources: Budget documents; Planning Division estimates (development expendrures); for Foreign Project Assistance, World Bank estimates and SAPP Operational Plans.

107 Table 2 PAKISTAN - CALCULATION OF INCREASES IN GOVERNMENT HEALTH EXPENDITURE IN REAL TERMS, AND IN REAL PER CAPITA TERMS, 1991/92 TO 1997/ / / / / / / /98 1. Total Government Health Expenditure, Rs. Million,. Current Prices _ 9,233 10,243 12,056 14,670 16,621 18,327 20, GDP Deflator, 1990 = Population, Millions Total Government Health 00 Expenditure in Constant 1990 Prices, (a) In Rs. Million (b) As an index, with 1991/92= Per Capita Government Health Expenditure in Constant 1990 Prices (a) In Rs (b) As an index, with 1991/92= Sources: Budget documents; Planning Division estimates (development expenditures); Economic Survey Ifor population estimates. I

108 Table 3 I Provincial Health Expenditure and Total Expenditure, 1991/92 to 1997/98 Rs. Million I I I I I I Revised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/ / / / / / / /98 1. Punjab 1.1. Health Expenditure Total Expenditure Health as a Proportion of Total Sindh 2.1. Health Expenditure Total Expenditure x 2.3. Health as a Proportion of Total NWFP 3.1. Health Expenditure Total Expenditure Health as a Proportion of Total Balochistan 4.1. Health Expenditure Total Expenditure Health as a Proportion of Total Sources: Budget documents; Planning Division estimates (development expenditures); for Foreign Project Assistance, World Bank estimates and SAPP Operational Plans. I

109 Table 4 jj j j SAP Health Expenditures and Total Health Expenditures, 1991/92 to 1997/98 Rs. Million I I I I I r Revised Estimates or Provisional Actuals for 1991/92 to 1996/97; Budget Estimates for 1997/98 1. SAP Health Expendi tures, National Total 1991/ / / / / / / Current Development Total Total Government Health Expenditure, SAP plus non-sap.f Current Development Total SAP Health Expenditure as a Proportion of Total Govt. Health Exp.. I I I" Current j Development Total _ GDP Deflator, 1993/94= SAP Health Expenditure in Constant. 1993/94 Prices, Rs. Million 4.1. Current._= Of which non-salary _ Development [_ Total , SAP Health Expenditure in Constant 1993/94 Prices, As an Index, with 1993/94= Current _ Of which non-salarv I Development Total Sources: Budget documents; Planning Division estimates (development expenditures); Social Action Program Project Operational Plans. Figures in constant prices deflated by the GDP deflator. _j * _