Fiscal Health Space in Nepal

Fiscal Health Space in Nepal

Gauri Pradhan

Health is a fundamental human right of people as per the UN Declaration on Human Rights. The constitution of Nepal, 2015 also ensures fundamental health rights, emergency health services and equal access to health services for all. Therefore, providing primary health facilities to people and protecting their health rights is an essential obligation of the state. However, seen from astand point of the present healthcare coverage and the burden of health expenses of the people, Nepal is posed to encountering a difficult road ahead.

According to WHO, health financing is a core function of health systems that enables progress towards universal health coverage by improving adequate services and financial protection of people. However, in Nepal, people spend a big chunk of their income to meet their healthcare needs. Unfortunately, millions of people in Nepal are deprived of essential healthcare services.

Consequently, poor and vulnerable people are falling further into the poverty trap due to the rising health expenses, particularly during their illness. Therefore, Nepal needs to appropriately review its health coverage status and extend the fiscal space for healthcare services to respond to the dire needs of people's health issues.   

         An international study reveals a need for 86 USD per capita investment in the health field of low-income countries like ours. But, Nepal's per capita investment in health is meagre, and it is only about 20 USD. Statics reveal that the general government expenditure on health shares only 4% of the public budget. The out of pocket expenditure of an individual in healthcare is about USD 57.2 per cent despite the government's budget allocation of NPR 4.8 billion in FY 2021/22.

          In the face of having a glorious vision of "prosperous Nepal and happy Nepali", the development practice in the country is not people-oriented nor economically sustainable and environmentally friendly. Government priority is focused on "Bulldozer Development", such as building concrete urban jungles, river exploitation, road construction without proper socio-economic analysis, constructing mega airports damaging the environment and eco-system,  building view towers and big gates instead of giving priority to public goods like health, education and social security. The so-called "Rashtriya Gaurawka Aayojana" (national pride projects) also lacks a concrete vision and appropriate analysis for social empowerment, the masses' economic growth, and environmental protection. There is a close association between the general population's health and overall development. Experiences have proved that no national security is conceivable without proper human protection.

          In 2001, when the world entered into MDG era, Nepal also increased its budget to meet the declared health targets. To meet the Sustainable Development Goals (SDGs) 2030, the government has further expanded the fiscal space of the health sector. As a result, Nepal has progressed significantly in terms of prevention and control of Infant Mortality Rate (IMR), Under Five Mortality Rate (U5R), and Maternal Mortality Rate (MMR) and in life expectancy of people. Nepal has also has extended financial schemes to support the poor and vulnerable people in treating non-communicable but life-threatening diseases such as cancer, dialysis and TB.

However, the health system in Nepal faces profound challenges related to the fair distribution of healthcare services. People, in general, are complaining that they are suffering from increasing healthcare expenses due to a lack of good public health service in the country. Inadequate health budget allocation, poor administration, and ineffective health service system monitoring are also crucial challenges in Nepal.

          Generally speaking, the government's economic policies are focused on the growth paradigm. Still, unequal growth and lack of a proper social security system have also contributed to growing pains at people's level. From the perspective of growth-based economics, the state's investment in health, education, and social security is a deficit. But, the government cannot go for a paradigm shift by handing over these "state burdens" to the market economy just to collect the taxes to meet the health finances. The state should not forget that the invisible cost of people's illness and lack of proper health services will be an enormous burden in the long run if the issues are not tackled in time. Hence, the government must focus on meaningful investment in promoting and protecting people's health, which matters significantly for the country's national development. UNICEF reveals that an investment of one USD in child vaccination is equivalent to the return of sixteen USD. Similarly, a little investment in the capacity building of midwives also can save thousands of pregnant women and newborn babies during the delivery.

          There has been a substantial financial deficit to enhance the accessibility, affordability and quality of health services for people living and working under challenging circumstances. In Nepal, the National Health Policy covers programmes including vaccination, family planning, birth preparedness, free delivery services, abortion care, and community post-partum care to benefit society's marginalised and vulnerable people. The government receives a considerable amount of international grants and soft loans in this regard. Healthcare management, including public hospitals in the country, is below satisfaction. On the one hand, people are forced to go to private set-ups for better healthcare services even by lending money, on the other hand, the affluent population spends billions of NRs abroad to get treatment for speciality and super-speciality health services. 

          Traditionally, the government has been hugely taxing the production, import and sale of alcohol, tobacco-related products, vehicles and luxurious goods. Likewise, the government has also been expanding its sources of health budget by taxing services related to communication, drinking water, electricity and transportation. But this has also put a further burden on commoners. Therefore, the government needs to explore additional sources to expand the fiscal space of healthcare services. The government also needs to extend its partnership with the Non-Profit Organisations (NPOs), CBOs and cooperatives working in the health sector and promote corporate social responsibility (CSR) to meet the national health goals. During a health crisis, government and NPOs can campaign for cloud funding. Development assistance can also be regarded as a reliable source of revenue for the government, alongside taxation. Besides, issues like governance, transparency and accountability of the healthcare programmes need to be appropriately addressed to further attract international financing and public trust in the government policies and programmes.  

          Generally speaking, there are basically three significant health financing functions: re-prioritising expenses, increasing sources of revenues and enhancing service efficiency in the health sector. Besides, there should be an appropriate budget planning for the per-unit cost of essential healthcare services based on the size of inhabitants, remoteness, the burden of disease, and the degree of poverty. The government-funded programmes such as safe motherhood, under-privileged citizen health treatment and social health security need to continue to facilitate easy access to healthcare services. Due to their vulnerabilities, the poor and vulnerable people must be supported to respond to their health emergencies. If we could introduce proper social security plans and health care schemes, they could also further enhance the health response capacity of the people and the government.

Gauri Pradhan is a former member of the national human rights commission (NHRC) and associated with Public Health Concern Trust (phect-NEPAL).