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Policymakers' Roundtable on Health Financing in Bhutan

Begins:   Dec 19, 2011 16:00
Ends:   Dec 19, 2011 21:00
Contact Person:   HNP Learning Program

Policymakers' Roundtable on Health Financing in Bhutan (12/19/11 Thimphu, Bhutan)Background:

In January 2010, the Ministry of Health, Royal Government of Bhutan, in association with the World Bank and with support from other development partners including WHO and DANIDA, had organized a workshop on strategic options for sustainable health financing in Bhutan. This workshop deliberated on international health financing models and concepts, as relevant to the Bhutanese context, and the specific aspects of the Bhutanese health system and health financing system were analyzed. The proposed plan of action of the MOH was also discussed in detail. The workshop concluded with a recommendation to strengthen the evidence base which could lead to more informed policy making for the health sector in Bhutan. A list of proposed studies which were recommended by the workshop and later accepted in the joint review mission of the health sector as priority areas for Bhutan, are listed at annexure 1.

As a follow up on the recommendations of the 2010 workshop, the Ministry of Health conducted three of these identified studies during 2011, each undertaken within a span of 3-6 months, namely,

  1. National Health Accounts for Bhutan,
  2. Costing of health services at different levels, and
  3. GIS mapping of health facilities and key health outcomes.

The studies have used Fiscal Year 2009-2010 data (which were the most recent and complete set of data available), and were undertaken with financial and technical assistance from the World Bank under the ongoing Human Development Public Expenditure Review (HD PER) initiative. The Ministry and the World Bank jointly worked on final dissemination products as an outcome of these studies.

As planned during the inception of the studies, a high level discussion on the emerging findings of the studies was accordingly planned for 19th December 2011. This policymakers’ roundtable was attended by the Hon’ble Minister for Health, Hon’ble Members of Parliament, Senior Government Officials, Representative of Development Partners and other stakeholders.

Outline of the Programme:

The discussions in the roundtable essentially consisted of key presentations on the health financing context for Bhutan, as well as discussions on the policy insights generated by these studies, led by the MOH and the World Bank. There was also a panel discussion on further planned studies and roadmap, chaired by the Hon’ble Health Minister.

From the World Bank, the resource person invited for the dissemination included Mr. Pablo Gottret, Lead Economist, World Bank; Mr. Albertus Voetberg, Lead Health Specialist, World Bank and Mr. Somil Nagpal, Health Specialist, World Bank. On behalf of the World Bank country office, Mr Mark LaPrairie, Country Representative, introduced the resource persons and set the ball rolling for the discussions. The event was financially supported from the Health Results Innovation Trust Fund of the World Bank.

Stated Objectives of the Roundtable:

The High Level Dissemination was expected to meet the following objectives:

  1. To apprise the policy makers of the contextual factors for health financing in Bhutan based on international and regional experience.
  2. To discuss the emerging findings from the studies undertaken under the PER, identify areas for further policy action and to give directions for the remaining studies under the PER.

Report of the Roundtable Deliberations:

Health Financing in Bhutan (12/19/11 Thimphu, Bhutan) Report of the Roundtable Deliberations

Mr Kado Zangpo, Chief planning officer, Ministry of Health started the meeting with a welcome note. Welcoming Hon’ble minister for health, Members of Parliament, resident coordinators of UN agencies, Secretaries to the Royal Government of Bhutan, representatives of development partners, media houses and other officials, he informed that the high-level meeting had been organized by the MoH in light of the 58th World Health Assembly (WHA) resolution (2005), 62nd WHA resolution (2009), and 64th WHA (2011) which called for development of health financing structure including avoiding the payment of user charges by patients at the point of health service delivery- reasons for financial catastrophe and impoverishment. He emphasized that in Bhutan, the constitution requires the free provision of basic health care- a result of effective planning and efficient management of resources- and thus meeting this constitutional right of citizens is an obligation of the government. He brought to the notice of the audience that in Bhutan, there is no payment at the point of service delivery. However, some portions of the population do make out of pocket payments which include those for transportation, certain medications and self-referred treatment outside the country. Citing from NHA 2010, he said that out-of-pocket (OOP) payments constituted only 11% of the total health expenditure in the country. Remarking that healthcare costs are increasing throughout the globe due to technological enhancement and demand for health care services, estimates by McKinsey suggest that healthcare cost would double in next 5 years, whereas there has been a decline in government healthcare spending from 7.6% in 2005-06 to 6.27% of the budget in 2009-10 and from 30% to 18% in share of external financing during the same period. He stated that the strength of Bhutanese healthcare system is, however, the provision of same quality of care irrespective of social or economic stature including at places which are in mountainous regions. He concluded that the present meeting is to fill existing gaps in the health financing structure and empower it with sustainability.

Introducing the WB team invited for the event, Mr Mark La Prairie, Country representative, World Bank cited his personal experiences receiving health care service delivery in Bhutan. He brought notice to the fact that the emphasis on provision of social sector programs like education & health make Bhutan stand out from other countries. He reminded that a new Country Partnership strategy was prepared last year, which envisaged growth as a circle with two hemispheres – one of economic growth and other of social well being. Though, former is required to finance the latter- they are both equally important. Thus with changing costs and disease pattern- much associated with life style, he saw it encouraging to see the efforts of the government to explore the options of health financing.

Dr. Dorji Wangchuck, Director General, Ministry of Health shared an overview of health systems in Bhutan and explained the importance of this deliberation to the forthcoming 11th five year plan. He gave a historical glimpse into the evolution of the current healthcare system in Bhutan, starting as early as 1914 and based on training imparted to the then medical professionals and nurses. Pointing out the development of healthcare infrastructure till date, he shared the vision and mission for Bhutan’s healthcare system. He informed that the spectrum of hospitals in Bhutan now includes research & teaching hospitals, referral hospitals, district hospitals, grade I and grade II health care centers and field health workers. However, the cost of providing care is higher at larger centres and decreases as we go to the smaller facilities. He stressed the point, that during the development of all other sectors- like roadways etc, health is to be included as an important ingredient – it being a constitutional right of the citizens, to be provided without any form of discrimination.

The systems approach model followed in Bhutan, he informed, is based on consensus and keeping into consideration issues of literacy, disease prevalence and accountability. Financing, Medical products, vaccines & technology, Human resources for health, Leadership & governance and Information & service delivery were seen by him as the main constituents of the system. He expressed the goals of health care in Bhutan as – i). Free basic healthcare provisioning, ii) 100% coverage iii) Quality & equity iv) Sustainability v) Evidence based intervention vi) Promptness of care vii) Incorporation of alternative or traditional medicine and viii) Decentralization of planning & management of health care services. The health policy is delivered around the characteristics of health being equitable, just and acceptable. Thus making health - people centric, engaging stake holders, promoting empowerment, being cost-conscious and ethical remains important for the country’s health system.

Deliberating on the health spending since 1st five year plan, he mentioned that though the outlay on health has been rising consistently, however, the public health expenditure as percentage of nominal GDP has been declining, currently at 3.2% which is the same trend as the declining total health spending as a share of government spending, currently at 6.3%, in spite of increasing health care costs. Increasing life expectancy and aging population would be a future challenge. In terms of infrastructure and services, the current strategy was to consolidate, integrate and expand accordingly. Value addition in these aspects would be a task in the future- both through building institutions as well as by having adequate regulatory framework, which is the need of the hour.

Aging population, rising trend in non-communicable diseases, effects of climate change, emergencies and disasters, burden of mental health problems, urbanization and adverse effects of financial markets crises which would restrict the support of international donor partners, were the key resource challenges to cope with. High dependence on import for most health care supplies– a major reason for increase in costs, increasing demand for free and quality health care, promoting global health goals, improving accessibility, addressing shortage of human resources for health, growing specialization and diversification in health care delivery remained challenges yet to be overcome for health service delivery. The epidemiological transition, continued burden of communicable diseases, difficulties in providing health services in hard to reach areas, rising demand and economic transition of the country together demand a strategic approach to health promotion and intervention in the forthcoming five year plan. Introducing selective and appropriate technology for health, cost effective provision of services, enhancing health personnel productivity, and exploring options for private – public partnerships in health including outsourcing of certain services, thus creating investment opportunity for health were some of the solutions that the policymakers were deliberating upon. Proper utilization of district hospitals, improving the referral system, optimization of IT-enabled services (using mobile & e-health technology) were also areas that the MOH was looking into.

Sharing the lessons from global & regional experiences on health financing, with respect to an overview of health financing in Bhutan, Dr Pablo Gottret, Lead Economist, The World Bank, remarked that the practice in Bhutan was to measure its development in terms of Gross National Happiness. However, for comparability with respect to other countries, there was still need to review the same in context of Gross National Income per capita which is around $ 2000 currently – symbolizing the country’s movement from the group of low income countries into the league of low and middle income countries. The population pyramid of Bhutan demonstrated that Bhutan will see majority of its population moving further in higher age groups. However, it would be important to see the pattern in which this aging is taking place. It is striking to see that a large portion of deaths is taking place under the age of five – the main reason being communicable diseases. In comparison, he compared the situation with Denmark where under-5 mortality is low and the diseases are predominantly of non-communicable type.

While this transition is happening for Bhutan, its demographic and epidemiological profile- both continue to change – with huge cost and financing implications. Non-communicable diseases comprising of cardio-vascular diseases, renal diseases, cancers and so on, would be predominant as this transition progresses. He explained, that in terms of financing, this would mean recurring expenditures of larger amounts that are required to be spent over large amount of time- thus implying a lot of fiscal effort- if this were to be financed through the public budget. However, he said that when the nature of these non-communicable diseases is analyzed, we would realize that many of them are complications of conditions such as diabetes, renal disease etc that could also be prevented. This made health promotion and prevention very important activities of the public health system. A significant portion of these resources should go into the education of population, he envisaged. He also brought to the fore that a large proportion of the population of Bhutan is young and will continue to be young for a long while, which means that the population which constitutes the work force, will continue to be bigger than those who are very young or very old. This signified that the young population were earning and will also be able to save for the health expenditure when health care costs increase in future. The unavoidable condition that healthcare costs are going to increase is coupled with the fact that the change in population profile and aging will add to costs as well. Bhutan has been a moderate spender on health, spending around 3.7% of the GDP. A large 80% of the health expenditure in Bhutan was from the public sector with a low OOP share, which means that the public is relatively well protected compared to other countries in South Asia. He further deliberated on a graph from 2006, which shows that the public health expenditures as a share of total government expenditures have been oscillating. For the level of expenditure on health in Bhutan, it is encouraging that maternal mortality has improved, but the fact that it is still relatively high called for further analytical work and policy action. Though non-availability of hospitals is a reason for maternal mortality, maternal education also has a role to play in it. Thus, despite improvements in maternal mortality, infant mortality and birth with the help of skilled birth attendants, there are areas where South Asia, including Bhutan is not doing well- such as nutrition. Characterized by stunting and wasting, under five malnutrition in South Asia is worse than sub-Saharan Africa. When affecting children under 2 years of age, malnutrition impacts overall productivity, ability to learn and appropriate growth. Currently, Bhutan is performing below average in the area of combating malnutrition and more work needs to be done on this front.

Since the formal sector in Bhutan was only 10%, the idea of funding health through contributions from payroll did not make much sense, thus improving general tax revenues was an option to be examined. Bhutan needs to make an evidence based decision regarding funding its aging population and to secure optimal health for all its citizens.

Dr Somil Nagpal, Health Specialist, The World Bank said that 23 months ago, the country had organized a workshop to develop strategies for a sustainable health financing in Bhutan, which had ended with a decision to undertake some studies to generate evidence to guide policy in this direction. The decision was made by the government of Bhutan to conduct the identified studies with the help of donor partners and experts, on burden of disease, health expenditure, costing, cost efficiency, cost effectiveness, access to health services, benefit packages and policies on partnership with the private sector. Those studies which have been concluded are, resource tracking of flow of funds in the health system of Bhutan (the National Health Accounts for Bhutan-NHA 2009-2010) which includes public health expenditure by level of care, geography, program, function etc. Second set of studies includes those on costing, efficiency and effectiveness, cost analysis of public health interventions and hospital services at various levels of care. A third set of studies was around Geographic Information System (GIS) tools being used to map out health infrastructure and key health outcomes in Bhutan.

The NHA study elaborated the flow of funds in the health sector in Bhutan. Key funding sources for the country, besides the ministry of finance, included the donors, the Bhutan Health Trust Fund, the corporations and the local government as well as some private sector financing such as NGOs, religious and voluntary organization, private firms, households etc. The results of the study showed that 88% of the healthcare expenditure in Bhutan is financed by the government whereas OOP accounts for only 11% of the total health expenditure. This made a citizen of Bhutan, the lowest out of pocket spender on health, in South Asia. Nearest to this was Maldives at about 20% and Sri Lanka at about 50%, while other countries such as India had 70% of their health care expenditure being OOP, the share of public health expenditure being only about 25%. In Bhutan, of the 88%, Ministry of Health at the centre spent about 50% of the public share, the District level accounted for about 31% of the spending, and external assistance accounted for 18% of the public spending. Out of the 11% of OOP, the biggest reasons of expenditure are medicines and transport and a small portion on consultations. However, though not captured as health expenditure in the NHA, the spending on traditional healers and priests, and spending on health outside Bhutan, is missing in these figures, and is likely to be a large number. He informed that the new Bhutan Living Standards Survey (BLSS) 2012 is planning to capture these numbers in the future with the help of National Statistical Bureau and The Policy and Planning division in the ministry of health.

Amongst the health sector intermediaries who finally made payments to providers of health services, the share of ministry of health was at 59%, districts at 28% and households at 11%. Among the health providers, the major share of funds flowed to public providers and a small share went to the few private providers of health services, such as private pharmacies. Stratifying it by function, 25% of funds were spent on outpatient services, 20% on inpatient services, about 6% on treatment done abroad, capital expenditure was about 20%, education & training of health personnel was about 7%, public health, food & hygiene, research and development about 14% and health administration at about 8%. Due to data limitations, the results do not fully reflect employer’s expenditure and private expenditure incurred outside Bhutan which could be significant. A small OOP in Bhutan was quite encouraging but is also subject to the fact that there are limited private providers. Rapid unregulated expansion of private providers may have significant impact on the existing OOP and simultaneously on financial protection. Government being the biggest financer of health in Bhutan, any change in health care costs, will directly affect the government and its ability to fund health care.

The GIS and access study involved the use of GIS tools to indicate the presence of health infrastructure across the country, in relation to population settlements, road access and health outcomes such as IMR & MMR. Illustrating the policy relevance of the GIS maps created in the study, he emphasized that these GIS tools could be very useful for policy makers for resource allocation and for decisions on capital investment. He also informed that efforts are underway to make these tools available online, which would make easy access to GIS information possible for the planning and policy functions of the MOH.

The third study on costing of health services was undertaken in select facilities representing 60% and 59% of the OPD and IPD caseload in the country, respectively. The study reaffirmed that the same services cost more at centers providing higher level of care. This clearly indicated that if patients could be retained at lower levels of care, it would not only save transportation costs and avoid inconvenience to the patient but will also contribute to lower health system costs which could be used elsewhere. Disaggregated analysis of health care costs was also done which included items such as human resource costs, medication costs, other recurring costs and capital costs. The findings suggested that human resource costs are relatively a smaller proportion at higher level facilities while these were greater at lower levels. Amongst capital costs, most could be attributed to buildings at referral hospitals and district hospitals. In summary, the costing study pointed to the need of developing better referral systems and also that cost effectiveness and cost efficiency need to be further areas of research.

Dr. Albertus Voetberg, Lead Health Specialist, The World Bank spoke on World Bank support for the Health sector in Bhutan, stressing on partnerships and principles for collaboration. In the Bhutan country partnership strategy, there are four clusters of results, one of the most important of which is access to quality public services. This aims at supporting the government in equitable and efficient distribution of resources in social sectors though evidence based management. In addition to the support to on the public expenditure review and the studies on NHA, GIS mapping & accessibility and costing of services, there is also a recent NCD report completed by the Bank for Bhutan which indicates an expected upsurge in the non-communicable diseases. The striking fact is that the expenditure on NCDs is not replacing the existing pattern of health sector costs, i.e. the country would still need to spend on the things it is currently spending on and spending on, and NCDs would be over and above this existing spending. The communicable diseases expectedly need public financing, but NCDs apart from preventive and health promotion strategies would need innovative financing mechanisms. Addressing the issue of malnutrition, the speaker informed that the Bank is securing funds from the South Asia Food and Nutrition Security Initiative (SAFANSI) which would permit a comprehensive assessment of malnutrition in the country. A future area of work where the Bank may provide support is in the identification of causes and potential solutions to maternal mortality, including medication/supplementation and improving referral system.

Health Financing in Bhutan (12/19/11 Thimphu, Bhutan)

Hon’ble Minister for Health, Lyonpo Zangley Dukpa, chaired the open house discussion which followed these presentations. He began with his thoughts on the funds that Bhutan gets to spend on health care. He stated that this question, though a known fact that the country’s health care expenditure is increasing, was unanswered on which areas it was high and on which areas it lagged behind- and that this was answered by this exercise conducted to frame the National Health Accounts. The ministry’s goals of achieving efficiency and cost effectiveness will be supported by this effort. It was also pointed out that until 2010-11, there was no budgetary head for NCDs, which now exists. The question of charging non-nationals of Bhutan will also be helped by this body of evidence, based on which decisions regarding why to charge and how much to charge non-nationals could be taken by the MOH. Thanking the experts from World Bank and consultants from McKinsey, for the ongoing support to the ministry in the recent past, the Health minister sought further guidance and advice of experts to develop the health financing system in Bhutan on sound lines.

Pointes where policy recommendations were required were then discussed and these included:

  1. The difficulty in calculation of maternal mortality rate in view of the small population size in the country, and possible analytical work supporting an assessment of maternal mortality and its causes in the country. Inclusion of reproductive health in the next 5-year plan, and the required external technical and funding support.
  2. The issue of undernutrition in the country and possible policy action. Hon’ble minister requested for World Bank technical support on tackling the challenges around maternal mortality and malnourishment in the country.
  3. He also mentioned the phasing out of support from GAVI and Global Fund and possible support from donor partners in bridging the gap in financing being caused thereby.

Hon’ble secretary, Ministry of Health, Dasho Nima Wangdi, stated that the key is to make health care in Bhutan sustainable in the forthcoming five year plans, and thought has to be given into ways to invest in new health facilities in future. Dr Pablo responded stating that an increase in expenditure on health or any other social sector needs to be well planned, although it is not possible to expect a dramatic change in sources of finance over a very short time period. Fairness and equity of health expenditure certainly needs to be considered. Planning of health care human resources, too, needs to be done in a way such that strengthening them in the private sector does not weaken its presence in the public sector facilities.

A query was raised on the issue of self-referral of patients to higher end facilities. The query raised was whether there should be more investment in district level facilities, in making them more equipped so as to retain patients from self-referring to higher levels. Similarly, it was pointed out that greater study would be required to understand whether reducing health care purchased from outside the country was a better option than increasing investment within the country.

Another point of discussion was about the definition of basic health services and whether we could equate basic healthcare with primary health care. One possible modality discussed in the meeting was to have well defined basic packages which are universal and free for all, and could be funded by the government. As per need, the package could be expanded to include additional services covered free for the poor. It was pointed out that these are particularly difficult choices to make.

It was discussed that performance-based budgeting and linking expenditure with results required difficult decisions and involved issues like pay-for-performance. Striking a balance between competing interests is only the first step in the journey of evidence-based decision making process. The roundtable also discussed the issue of appropriate technology in a country where the population is relatively small, vis-à-vis the cost of maintaining the equipment, cost of hiring professional manpower etc. Also, the fact that quality is related to volume of workload implies that for the relatively less common procedures, quality could suffer in a low-utilization environment despite providing high-end technology. These were factors to consider in the decision around what services needs to be provided in the country and what needs to be purchased from outside the country.

The underscoring thoughts that were echoed in the discussion were that such decisions should be evidence based, carefully considered and with care that fairness and equity in healthcare is not affected and services are available to most vulnerable sections of society.

The round table conference concluded with a vote of thanks to the chair and to the invited resource persons and participants for the rich discussions and insights gained thereby.

Annexure 1: List of Studies Proposed to be Undertaken in the Bhutanese Health Sector

  • Burden of disease in the country: distribution of CDs and NCDs; possible impact of ongoing demographic and epidemiological transitions etc.
  • Health expenditure (National Health Accounts):
    • Detailed analysis of public health expenditure by level of care, geography, program, functions etc.
    • Analysis of household expenditure on health, constituents of such expenditure and its linkages to impoverishment.
    • Private sector expenditure on healthcare (other than households) and role of external entities in health financing in Bhutan.
  • Costing/efficiency and effectiveness:
    • Cost analysis of public health interventions and hospital services.
    • Efficiency and effectiveness of health expenditure, including technical and allocative efficiency
    • Feasibility of results based financing models, pay for performance, and alternative provider remuneration systems with their positive and negative effects on the health system
    • Analysis of the make-vs-buy decision for in-country tertiary care services as against the referral of patients abroad
  • Access:
    • Equity in access: including GIS mapping of facilities and access indicators. and utilization of health services, including analysis by level of care and income groups.
  • Benefit packages: Universal coverage (depth and breadth of services to be covered)
    • Exploring the constituents of a basic benefit package, or 'basic public health services‘
  • Policies on private sector involvement:
    • Analysis of feasibility of PPPs, including possible sectors/areas for private sector involvement.
    • Study of Quality of services and institution of mechanisms/indicators to monitor service quality.

Annexure 2: Media Coverage of the Roundtable

Cover page of the daily Kuensel:

Health Financing in Bhutan (12/19/11 Thimphu, Bhutan) Cover Page of the daily Kuensel (1)Health Financing in Bhutan (12/19/11 Thimphu, Bhutan) Cover Page of the daily Kuensel (2)

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