Strengthen Healthcare Financing


Gauri Pradhan

Health is a fundamental right of people as per the Universal 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 are an essential obligation of the state. However, looking at the present healthcare coverage and the burden of health expenses on people, Nepal is encountering a difficult situation at present. Nepal's health budget is considerably lower than the global average of 10 per cent of gross domestic product (GDP). Referring to the budget for the fiscal year 2021/22, there is a significant reduction of budget in hospitals and academics, which may be due to the COVID-19 pandemic. 

Core function

According to the World Health Organisation (WHO), health financing is a core function of health systems enabling progress towards universal health coverage by improving adequate services and financial protection of people. An international study reveals a need for $86 per capita investment in the health sector of low-income countries like ours. Nevertheless, Nepal's per capita investment in health is meagre, and it is about only $20 per person per year. Statistics reveal that the general government expenditure on health shares only 4 per cent of the total public budget. The out-of-pocket expenditure of an individual in healthcare is about 57.2 per cent despite the government's budget allocation of Rs. 4.8 billion in 2021/22. Consequently, poor and vulnerable populations are further falling into the trap of poverty due to the rising health expenses.

The country’s development practice still lacks a pro-people essence, economic empowerment, and environmental sustainability. It is essential for the nation to avoid the "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 top priority to public goods like health, education and social security. The national pride projects also lack a concrete vision and appropriate analysis for social empowerment, the masses' economic growth, and environmental 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) by 2030, the government has further expanded the fiscal space of the health sector. As a result, the country 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, despite a decade long armed-conflict and natural calamities like the devastating earthquakes of 2015. Nepal also has extended financial schemes to support the poor and vulnerable people in treating non-communicable but life-threatening diseases like cancer, dialysis, TB, etc. 

However, the health system in Nepal faces profound challenges in the fair delivery of healthcare services. People are complaining that they are suffering from increasing healthcare expenses due to a lack of good public health services. Inadequate health budget allocation, poor quality of healthcare services, and ineffective administration and monitoring are crucial challenges. The government's economic policies seem to be focused on the growth paradigm. Still, unequal growth and lack of a proper social security system have increased people's growing pains.

 From the growth-based perspective, the state's investment in health, education, and social security is a deficit. However, the government cannot get an excuse for handing over these "state burdens" to the private sector. Hence, the government must focus on meaningful investment in promoting and protecting people's health. UNICEF reveals that an investment of $1 in child vaccination is equivalent to the return of $16. Similarly, a tiny investment increment in the capacity building of midwives can save thousands of pregnant women and newborn babies during the delivery.

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. Traditionally, the government has hugely taxed 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. Nevertheless, this has also put a further burden on commoners. Therefore, the government needs to explore additional sources of financing to expand the fiscal space of healthcare services. 


All three levels of government need to enhance their partnership with them to enhance people's rights to accessibility, affordability, and quality of care. During a health crisis, government and non-profit organisations can campaign for fundraising like cloud funding. Besides the public and private hospitals, there are other vital actors, i.e. NPO/CBO and community hospitals. They could be a reliable source of partnership for promoting healthcare services.

There are three significant types of health financing functions: re-prioritising expenses, increasing sources of revenues, and enhancing healthcare efficiency. The government needs to explore sustainable funding sources further. International grants and supports are one of reliable sources of funding besides taxation. For this, the government needs to promote accountability, transparency, and a social audit system to win over the trust of the public and the international development community.

(A former member of the National Human Rights Commission, Pradhan is associated with Public Health Concern Trust.)

How did you feel after reading this news?

More from Author

Strengthen Federalism For Effective Service Delivery

Enigma Of Giant Gaseous Planets

Wetland Conservation Initiative

A Posthumous Treatise By A Legal Luminary

Unforgettable Soviet Memories

Nepal's Hydropower Expansion Challenges

Hurdles Of Youth

PM Prachanda stresses Russia-Nepal economic partnership