Uganda Health Care Budget

Over the last week or two I’ve been reading about how health care is funded in Uganda. As with most other stuff I’ve studied in the last year, this is just not as straight forward as you might at first think.

Let me try to keep it simple (accept some roundings):

The Government of Uganda has over the last few years managed it’s national budget by applying some overarching macro-economic principles. Essentially this approach means that it first decides how much money should be spent in total and then how much to allocate to each sector e.g. roads, health, education and security.

Health has been allocated 10% of the overall budget. This is interesting given that GoU is one of the African Union signatories to the 2001 Abuja Declaration in which it was suggested that countries needed to allocate a minimum of 15% of national budget to health.

In the year 2009/10 Uganda allocated UGX 737 billion to health, that’s about USD 350m. Note that just USD 200m of that is money raised in taxes, or other revenue means, by GoU and the other USD 150m is in the form of budget support from overseas. So all in all about $12 per person, per year.

It seems that in addition to this government funding, people pay a further $12 per person, per year out-of-pocket (mainly for tests and treatments but sometimes for consultations as well); so now we have a total of about $24 pp, pa.

There are other funds from e.g. Global Fund, PEPFAR and USAID. These are off-budget and generally given in direct support of specific health programmes, mostly HIV/AIDS. (big debate on whether this off-budget approach is good or helpful). In any case this may add up to another $6 pp pa. Since it is off-budget it is sometimes hard to get a precise number and there’s also a big difference, or timing issue, between announced funds and disbursement of these. So now we are at $30 per person, per year.

However the WHO and others have estimated that the annual cost to provide just the minimum health care package to all is at least $40 pp, pa. By the way this minimum package does not include much of the general hospital care that many of us in the West take for granted. It’s good on public health, primary care (like the GP), treatment of HIV/AIDS, TB and Malaria and of course maternal child health. Weak on e.g. surgery and trauma care.

Ugandans are already spending almost 10% of total household funds on health. This is clearly at the top end and one could not expect any further contribution, without causing significant hardship.

So how do we fund this gap?

GoU could raise it’s overall budget allocation to at least 15%, though it does seem very set against doing so. Long debates and arguments including reference to IMF theories on macroeconomics. Though even if it did, where would this extra 5% (just $6 pp pa) come from? Either there would be less budget for something else or taxes would have to increase, which given the current size of the formal, tax-paying, sector seems unworkable.

Uganda could have more funding, Aid, from overseas. That seems like a good approach EXCEPT that since it is committed to the 10% sector ceiling, I’ve now learnt that if we give more to health in budget support the GoU would simply reduce its portion by the same amount, so the net result would still be just 10% of budget. It seems that there are sound economic theories to justify this approach.

So we either choose to fund off-budget and give to specific programmes or we, which is the conclusion I am now reaching, need to re-evaluate how we spend the $30 pp pa and ensure that when spent correctly we get better value and improved outcomes. This may mean e.g. an increased focus on community based prevention and promotive programmes, more money spent on public health issues such as safe water and sanitation and also on education, especially for girls.

One other aspect that I am keen to explore further is how we might get better value from the out-of-pocket expenditure through the deployment of appropriate risk-pooling pre-payment health schemes.

Interesting times…

About Kevin Duffy

Interim Management and Consulting - Healthcare Development. Kevin has thirteen years senior management experience in the development and delivery of healthcare services in Africa and South Asia.
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