Macroeconomics and Health Nepal

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WHO/SDE/CMH/04.10
Macroeconomics and Health Nepal
Situational analysis
Maria Paalman1
April 2004
World Health Organization
1
Senior Health Advisor, Royal Tropical Institute (KIT), Netherlands; Consultant, WHO Geneva
Table of contents
Acronyms .............................................................................................................. 5
Executive summary .............................................................................................. 7
Introduction ............................................................................................................................................... 7
Nepal Context ........................................................................................................................................... 7
The Health Sector ..................................................................................................................................... 8
Poverty and Health .................................................................................................................................... 9
External Development Partners .............................................................................................................. 10
Macroeconomics and Health ................................................................................................................... 10
Conclusion and recommendations .......................................................................................................... 11
Macroeconomics and Health ..................................................................................................... 12
Assignment ................................................................................................................................. 12
Nepal Context ...................................................................................................... 13
Physical ................................................................................................................................................... 13
Demographic ........................................................................................................................................... 13
Administrative .......................................................................................................................................... 13
Political .................................................................................................................................................... 13
Economical.............................................................................................................................................. 14
Social ...................................................................................................................................................... 14
Religion ................................................................................................................................................... 15
Ethnic ...................................................................................................................................................... 15
Education ................................................................................................................................................ 15
Poverty .................................................................................................................................................... 15
Security .................................................................................................................................................. 16
Government finance ................................................................................................................................ 16
The Health Sector ............................................................................................... 18
Ministry of Health ........................................................................................................................ 18
Policies, strategies and plans ................................................................................................... 18
National Health Policy 1991 .................................................................................................................... 19
Second Long Term Health Plan 1997-2017 ............................................................................................ 19
Strategic Analysis to operationalise the SLTHP ...................................................................................... 20
WB study - Nepal: operational issues and prioritization of resources in the health sector....................... 21
Medium Term Strategic Plan (MTSP) ...................................................................................................... 22
Medium Term Expenditure Programme (MTEP) ..................................................................................... 22
Medium Term Expenditure Framework for Health (MTEF-H) .................................................................. 23
Objectives ............................................................................................................................................... 24
Health Sector Strategy (HSS) ................................................................................................................. 24
Tenth 5-year Development Plan .............................................................................................................. 24
Nepal Health Sector Programme – Implementation Plan 2003-2007 (NHSP-IP) .................................... 26
PRSP and JSA ........................................................................................................................................ 27
Conclusion on policies, strategies and plans ........................................................................................... 28
Provision of health services ...................................................................................................... 28
Public health facilities .............................................................................................................................. 28
Utilisation................................................................................................................................................. 29
Human Resources................................................................................................................................... 29
Devolution of health services .................................................................................................................. 30
Private sector and NGOs ........................................................................................................................ 31
Implications of Maoist insurgency ........................................................................................................... 31
MEH/Nepal/Situational Analysis, April 2004
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Health financing .......................................................................................................................... 31
Public Expenditure Review...................................................................................................................... 31
Budget for 2003/2004 .............................................................................................................................. 33
National Health Accounts ........................................................................................................................ 33
Taxes ...................................................................................................................................................... 33
User fees ................................................................................................................................................. 34
Insurance ................................................................................................................................................ 34
Health Management Information System ................................................................................. 35
Health indicators and targets .................................................................................................... 35
MDGs (HSS June 2002).......................................................................................................................... 36
Tenth Plan ............................................................................................................................................... 36
MDG Progress Report ............................................................................................................................. 36
Health Sector Strategy ............................................................................................................................ 36
Essential health interventions ................................................................................................... 36
Conclusion .............................................................................................................................................. 38
Research ...................................................................................................................................... 38
Capacity ....................................................................................................................................... 38
Relationship poverty – ill health ........................................................................ 40
External Development Partners ......................................................................... 42
Multilateral and bi-lateral donors .............................................................................................. 42
International NGOs ..................................................................................................................... 42
National NGOs............................................................................................................................. 42
Macroeconomics and Health ............................................................................. 45
Commitment ................................................................................................................................ 45
Commitment to poverty reduction............................................................................................................ 45
Commitment to Macroeconomics and Health .......................................................................................... 45
Commitment of external development partners ....................................................................................... 46
Institutional arrangements ......................................................................................................... 46
CMH calculations for Nepal ....................................................................................................... 47
Opportunities for scaling up/reaching the poor ...................................................................... 48
Non-financial constraints to scaling up/reaching the poor .................................................... 48
Financial constraints to scaling up/reaching the poor ........................................................... 49
Sources ................................................................................................................................................... 49
Expenditures ........................................................................................................................................... 50
Recommendations and conclusions ................................................................. 51
Annexes ............................................................................................................... 53
MEH/Nepal/Situational Analysis, April 2004
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Annex 1
Policies and Plans ................................................................................................. 54
Annex 2
Tenth Plan Chapter 24 – Health .......................................................................... 59
Annex 3
Nepal Health Sector Programme – Implementation Plan (2003 – 2007) .......... 60
Annex 4
Health and Financing paragraphs in the PRSP ................................................. 61
Annex 5
People met in Nepal during mission 16/12/03 – 06/01/04 .................................. 67
Annex 6
Bibliography MEH situational analysis Nepal .................................................... 68
MEH/Nepal/Situational Analysis, April 2004
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Acronyms
Aamaa
AIDS
ALOS
ARI
BNMT
BoD
CBR
CDR
CHI
CMH
CMR
CPR
CRS
CTC
DALY
DD
DDC
DFID
DHO
DoHS
DOTS
EDP
EHCS
FP
FPAN
FR
FY
GDP
GTZ
HDI
HEFU
HIV
HMG
HMGN
HMIS
HP
HR
HSS
IEC
ILO
IMCI
IMF
IMR
INF
INGO
JICA
KIT
Aamaa Milan Kendra (Mother’s Club)
Acquired Immune Deficiency Syndrome
Average Length of Stay
Acute Respiratory Infections
Britain Nepal Medical Trust
Burden of Disease
Crude Birth Rate
Crude Death Rate
Community Health Insurance
Commission on Macroeconomics and Health
Child Mortality Rate
Contraceptive Prevalence Rate
Nepal Contraceptive Retail Sales Company
Close-to-Client
Disability Adjusted Life Year
Diarrhoeal Disease
District Development Committee
Department of International Development (British Govt)
District Health Office
Department of Health Services
Directly Observed Treatment, Short-course
External Development Partner
Essential Health Care Services
Family Planning
Family Planning Association of Nepal
Fertility Rate
Fiscal Year
Gross Domestic Product
Gesellschaft für Technische Zusammenarbeit (German Development
Organisation)
Human Development Index
Health Economics and Financing Unit MoH
Human Immuno-deficiency Virus
His Majesty’s Government
His Majesty’s Government of Nepal
Health Management Information System
Health Post
Human Resources
Health Sector Strategy
Information, Education and Communciation
International Labour Organisation
Integrated Management of Childhood Illness
International Monetary Fund
Infant Mortality Rate
International Nepal Fellowship
International Non-Governmental Organisation
Japan International Cooperation Agency
Royal Tropical Institute Amsterdam
MEH/Nepal/Situational Analysis, April 2004
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LE
LIC
MCHW
MDGs
MEH
MMR
MoF
MoH
MSI
MTEF
MTEF-H
MTEP
NGO
NHA
NHEICC
NHRC
NHSP-IP
NLSS
NPC
NRCS
OR
P-1/2/3
PAF
PER
PHC
PP&IC
PPP
PRSP
RH
SDC
SHI
SHP
SLTHP
STD
SWAp
TB
TBA
UMN
UN
UNDP
USAID
VAT
VDC
VHW
WB
WDR
WHO
Life Expectancy
Low-income country
Maternal and Child health Worker
Millenium Development Goals
Macroeconomics and Health
Maternal Mortality Rate
Ministry of Finance
Ministry of Health
Marie Stopes International
Medium Term Expenditure Framework
Medium Term Expenditure Framework – Health
Medium Term Expenditure Programme/Plan
Non Governmental Organisation
National Health Accounts
National Health Education, Information and Communication Centre
National Health Research Council
Nepal Health Sector Programme – Implementation Plan
Nepal Living Standard Survey
National Planning Commission
Nepal Red Cross Society
Occupancy Rate
Priority 1/2/3
Poverty Alleviation Fund
Public Expenditure Review
Primary Health Care
Policy, Planing and International Cooperation
Purchasing Power Parity
Poverty Reduction Strategy Paper
Reproductive Health
Swiss Agency for Development and Cooperation
Social health Insurance
Sub Health Post
Second Long Term Health Plan 1997-2017
Sexually Transmitted Disease
Sector-wide Approach
Tuberculosis
Traditional Birth Attendant
United Mission Nepal (INGO)
United Nations
United Nations Development Programme
United States Agency for International Development
Value Added Tax
Village Development Committee
Village Health Worker
World Bank
World Development Report
World Health Organization
MEH/Nepal/Situational Analysis, April 2004
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Executive summary
Introduction
The Government of Nepal requested WHO to provide technical assistance to take forward the
Macroeconomics and Health (MEH) agenda. The Royal Tropical Institute in Amsterdam
(KIT) was selected to provide this support during the preparatory phase (around 6 months).
The support will consist of the production of a situational analysis, facilitation of establishing
the institutional mechanisms for taking the work forward, support for the organisation of a
national meeting and facilitation of a workshop to produce a proposal for the planning phase.
The consultant visited Nepal from 16 December 2003 to 6 January 2004 to collect
information, discuss options and further work as input for the situational analysis. This report
is the situational analysis.
Nepal Context
Nepal is a relatively small (population 24 million) land-locked country, bordered by the two
biggest countries in the world, India and China. Its renowned physical beauty makes it very
fragmented and many parts are inaccessible by modern transport and lack of communication
facilities. There are few cities and 86% of the population live in rural areas. The country is
divided into 5 development regions, 14 zones and 75 districts and almost 4000 Village
Development Committees and 58 municipalities.
Nepal was never colonised, is a constitutional Hindu monarchy and has a multiparty
bicameral parliamentary democracy. However, since October 2002 the King has taken over
power. Since 1996 an ever increasingly violent Maoist insurgency has thrown the country into
civil war. Road blocks, abductions, forced protection and fighting are increasingly making the
country outside the capital Kathmandu an insecure place to live and travel.
Underlying the insurgency is (among other things) a pervasive poverty. The country’s GDP
per capita is only $250 and 38% of the population live below the poverty line. There are large
inequalities. The poorest people live in the remote mountainous areas or belong to the lowest
caste, the Dalits, in particular in the Western part of the country. This is also the part where
the Maoists are strongest. While only 15% of households is connected to the electricity grid,
80% have access to safe water. Unemployment is a big problem, and many work abroad,
bringing more money into the economy than toursim, foreign aid and export together.
Illiteracy is very high, with around 40% of men and 75% of women not able to read or write.
Nepal is still a very traditional country, hierarchical, linked to a caste system, strong religious
and family traditions and a feudal structure. Favouritism is institutionalised, corruption rife.
On the positive side civil society is well developed with numerous NGOs, including human
right organisations, and a diverse and free press. Two braod ethnic groups can be subdivided
into some 60 different groups, with their own culture and language, but there is only one
official language: Nepali.
Total government expenditure over FY 2002/2003 was $48 per capita, being 19% of GDP.
Two-thirds of that is regular budget,one third development budget. 11% of government
expenditure was used for debt repayment. The government budget for 2003/2004 is almost
20% higher. Around 60% of that comes from domestic revenues, 15% is expected to come in
as foreign aid and 25% will be borrowed. The real percentage of foreign aid to Nepal is much
higher, as a substantial percentage does not go through the MoF and is not accounted for in
MEH/Nepal/Situational Analysis, April 2004
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the so-called Red Book. In the health sector this percentage is even 90%. Maybe this is the
reason why the expected government expenditure 2003/2004 for the health sector is so low,
both compared to education (3x as much) and as compared to other countries: only 5.1% of
total government budget, being $2,94 per capita and 1.18% of GDP is publicly spent on
health.
The Health Sector
The central section of the MoH is responsible for policy making, and planning, financing,
international cooperation, human resources, monitoring and evaluation, as well as for the
central and zoanl hospitals. The Division for policy, planning and international cooperation is
rather weak, but the health economcis and financing unit has become strong. The Department
of Health Services is responsible for the provision of all health services at the district level
and below and produces very informative annual reports. Regional Health Directors are
responsible for technical backstopping as well as programme supervision. Their role seems to
become less clear under the decentralisation process. At the district level and below, District
and Village Development Committees are responsible for the delivery of health services.
Over the years many policies and plans have been produced. It seems that more or less
simultaneously two sets of documents were developed, one government driven and related to
the 5-year development plan cycle, the other EDP driven. It seems that the detailed work done
by the MoH jointly with the EDPs has to some extent informed the development of the
documents for the Tenth 5-year Plan. The problem seems to be that the most current,
prevailing documents have somewhat different objectives, strategies and activities. The main
government document in force is the Tenth Plan, the health chapter and budget of which are
organised by priority programme and/or organisational centre, probably following present
budget lines. The NHSP-IP, more donor-driven, is organised by objectives, outputs and
activities in a logical framework and does not have a budget yet. The PRSP, supposed to be a
summary of the Tenth Plan, contains elements of both the Tenth Plan’s Health Chapter and
the NHSP-IP, but also includes new activities. It is therefore not clear at this point which
document the MoH is implementing and using to monitor its activities. Officially the MoH is
bound by the Tenth Development Plan and its MTEF. It would be helpful, if a detailed
comparison was made between the IP, the Tenth Plan and the PRSP, after which the MoH,
NPC and MoF could sit together with the EDPs and decide which activities they will
implement together.
From all these plans however it is clear that Nepal is highly committed to poverty reduction
and also sees health as a major driving force for economic growth. The MoH has identified
essential health care services and the main objective of the health sector relates to scaling
these up to reach more people. The EHCS package is very similar to the globally agreed
priorities of maternal and child care, RH and infectious diseases, consistent with the MDGs
and the package that the CMH advised. However, it is not clear which concrete activities are
included. The NHSP-IP has outputs, broad actions, but no detailed activities for each output.
The Tenth Plan includes prioritised programmes, but does not include the kind of detail, that
sheds light on which parts of these programmes, or which activities, belong to the
prioritisation. This obviously makes the costing very difficult.
The MoH further has objectives to partner with the private and NGO sector, to decentralise
resources and responsibility to village levels and to improve quality of services. Alternative
sources of financing and exemption schemes for user fees will be developed. The health
information system will be changed in such a way that the impact of the health strategy on the
MEH/Nepal/Situational Analysis, April 2004
8
health status of the poor can be monitored. As in so many countries the implementation is the
problem, utilisation of public health services is low, staff does not want to work in rural and
remote areas, supplies and drugs are inadequate etc.
The MoH website gives an astonishingly candid and comprehensive summary of the health
status of the population and its determinants: “The Mortality and morbidity rates especially
among women and children are alarmingly high. Acute preventable childhood diseases,
complications of child birth, nutritional disorders and endemic diseases such as malaria,
tuberculosis, leprosy, STDs, rabies, and vector borne diseases continue to prevail at a high
rate. Determinants of such conditions are associated with pervasive poverty, low literacy
rates, poor mass education, rough terrain and difficult communications, low levels of hygiene
and sanitary facilities, and limited availability of safe drinking water. These problems are
further exacerbated by under-utilization of resources; shortages of adequately trained
personnel; underdeveloped infrastructure; poor public sector management; and weak intraand inter-sectoral co-ordination”.
Another major problem is that money does not follow agreed policies. While the MTEF for
the health sector, produced by the MoH in preparation for the Tenth Plan, set aside 57.6% of
the budget for Priority-1 programmes and the Tenth Plan itself even 70%, the Public
Expenditure Review of the health sector showed that actual funding going to Priority-1
programmes decreased from 58% to 50% over the last 3 years, while funding for priority-3
programmes increased. Also running counter to plans, is the fact that the share of the funding
going to rural areas decreased, the expenditures for RH drastically decreased, and the share of
health expenditures for children under 5 wasonly 4,7%, while they bear around 50% of the
burden of disease.
Provision of public sector health services is basically financed from taxes and user fees. Both
are regressive, as the taxes are mainly indirect (VAT) and the user fees are a fixed amount,
meaning that the poor pay relatively more than the rich, if and when they make use of public
services at all. There are virtually no insurance schemes in place. People pay around $10 per
capita out-of-pocket per annum. A pilot with community health insurance is planned for this
year. Public services are mostly used by the middle income groups, while the rich go to the
private sector and the poor don’t go at all. The ongoing Nepal Living Standard Survey will
give more information on utilisation of health services in the rural areas.
Poverty and Health
Data from different sources have been analysed to get a grasp on the relationship between
poverty and health and reveal great disparities in both health outcomes and intermediate
indicators. Differences between the richest and poorest income quintiles in attended delivery,
antenatal care, immunization coverage, malnutrition, total fertility rate and use of modern
contraceptives are 2-10 fold. Infant and child mortality rates are much higher in rural areas
and in particular in the mountains, coinciding with income differentials. A relation between
the educational level of the mother (often in itself income related) and major health indicators
has also been clearly established, as well as a relation between health care seeking behaviour
and poverty. Geographical focus of reaching the poor should be on the Mid-and Far-West
Regions, where 22% of the population live, who have the worst health indicators of the
country and where hence great health gains can be made. As these are also the strongholds of
the Maoist groups, this is far from simple.
MEH/Nepal/Situational Analysis, April 2004
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External Development Partners
In Nepal 6% of external aid is spent on health. Donor expenditure in the health sector has
more than tripled over the last 3 years and amount to about 40% of total public expenditures,
translating in $2 per capita per annum. The biggest donors at the moment in the health sector
are Japan and the UK, together good for half the external aid, with UNICEF, WHO, UNFPA,
Germany, the US and Switzerland making up most of the remainder. The WB recently
reduced its IDA grants to Nepal, but might be coming back soon. The financial inputs by
indigenous and international NGOs are less well documented.
The donors and the MoH have jointly developed the Health Sector Strategy and its
Implementation Plan. Although this plan is a move towards a sector-wide approach, most
donors are not in favour of fundpooling (yet), except DFID and the WB. At present all
support is still organised in the form of projects or programmes and almost all funds go
directly to the MoH or are self-executed by partners. The bulk of the donor funds go to
essential health care or system development/strengthening.
Macroeconomics and Health
HMG of Nepal is very committed to poverty reduction, as is evident from all major policy
and planing documents, but less so to health, as is evident from the low budget made available
for the health sector (which might be related to the large direct flows of funding from the
donors to the MoH). Within the health sector the MoH is on paper equally committed to
reachng the poor with health services, but also hear money does not follow policy and the
transfer of large amounts from Priority-3 to Priority-1 programmes must be considered
unrealistic in such a short period.
Nepal attended both global consultations on Macroeconomics and Health in Geneva and
established a Sub-Commission on Macroeconomics and Health under the National
Commission for Sustainable Development. The Sub-Commission met only once and
appointed a working committee of 3 people, headed by the Chief of the Division for Policy,
Planning and International Cooperation, Dr. B.b. Karki. This working committee made a Plan
of Action for the preparatory phase of Macroeconomics and Health work, which was
submitted to WHO. A revised version has been approved in March 2004. It remains to be seen
whether the Sub-Commission will continue to be active, now that Dr. B.B. Karki has left
Nepal for the USA.
On the basis of the calculations by the CMH and the available information in Nepal the
consultant estimated that total health expenditures in Nepal would have to double by 2007.
HMG of Nepal would at least need to double its investment in health before 2007 and the
donors would need to increase their share with $17 per capita, an eigth-fold increase from the
present $2. Possibilities to channel the $10 that people now spend on health care out-ofpocket into pre-paid schemes need to be studied.
Recently (during pre-consultative meetings of the Nepal Development Forum in April 2004)
most donors have made restoration of democracy and conflict resolution conditionalities to
future aid. Some donors advocated co-operating with the rebels in order for service delivery
to continue. Therefore the present political situation could hamper scaling up efforts, in as far
as both HMG of Nepal and donors do not seem willing and/or able to put more resources into
health in the current situation.
MEH/Nepal/Situational Analysis, April 2004
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Conclusion and recommendations
There are many achievements and developments in Nepal that forebode well on the
possibility to scale up essential health interventions and specifically reach the poor. The
opportunities have been summarised on page 47. However, there are also a considerable
number of non-financial and financial constraints, which are summarised on pages 48/49. The
main constraints are of a political nature and lie outside the health sector, namely the
insecurity due to the conflict and the instable bureaucracy, resulting in lack of continuity in
governance.
Recommendations include:
 aligning the different operational plans,
 collecting (income poverty) disaggregated data for key indicators,
 adapting District Health Plans on the basis of detailed District Health and Poverty
Profiles,
 focusing on interventions that address the burden of disease experienced by the poor
and on actually reaching the poor with these interventions,
 studying options to contract out to NGOs and/or private sector, contract in or link up
with existing services or schemes in other sectors
 ensuring that costing of the EHCS includes all system costs related to scaling up and is
based on real local costs
 finding out how the P-1 programmes relate to the EHCS and how much of present
expenditure is used to finance EHCS
 doubling HMG’s health budget
 increasing donor health budget
 using the full increase on scaling up EHCS for the poor
 including evaluation of community health insurance pilot in the proposal for the
planing phase
 establishing research needs on the basis of the inventory made during the preparatory
phase and the information gaps to be agreed during the national meeting and
workshop in June 2004.
Together with the working committee for Macroeconomics and Health and the WHO office
the consultant adapted the Plan of Action and drafted ToR for a number of local consultants to
carry out the desk review of local studies relevant to Macroeconomics and Health, to make
district health and poverty profiles, and to organise a national advocacy meeting and
workshop to draft a proposal for the planing phase. These activities are elaborated in the Plan
of Action, last version dated 3 March 2004.
MEH/Nepal/Situational Analysis, April 2004
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Introduction
Macroeconomics and Health
The Commission for Macroeconomics and Health showed that investing substantially more in
health will result in great economic returns. Disease creates poverty, but effective health care,
especially targetted to the poor, will create economic growth. The health sector no longer only
consumes resources, it can be a productive economic sector with very high returns on
investment, if resources are used for prioritised interventions and targeted to those in greatest
need.
The Macroeconomics and Health agenda focuses on:
1. Achieving better health for the poor, thereby reducing poverty and stimulating economic
growth
2. Eliminating financial constraints by increasing investments in health
3. Eliminating non-financial constraints to providing a package of essential interventions to
the poor
Assignment
The Government of Nepal requested WHO to provide technical assistance to take forward the
Macroeconomics and Health (MEH) agenda. The Royal Tropical Institute in Amsterdam
(KIT) was selected by WHO Geneva, in consultation with the Regional Office, the WHO
country office and the MoH Nepal, to provide this support during the preparatory phase
(around 6 months). The support will consist of the production of a situational analysis,
facilitation of establishing the institutional mechanisms for taking the work forward, support
for the organisation of a national meeting and facilitation of a workshop to produce a proposal
for the planning phase. This report is the situational analysis.
The consultant visited Nepal from 16 December 2003 to 6 January 2004. Initial briefing took
place by the WR, Dr. Klaus Wagner, and the WHO Health Planner, Dr. Lin Aung. The
consultant was introduced to Dr. Benu Behadur Karki, Chief Policy, Planning and
International Cooperation in the MoH. He was the driving force in Nepal to get the
Macroeconomics and Health agenda implemented and was my main counterpart during the
consultancy. A list of people met is provided as Annex 5 and a list of documents consulted in
Annex 6. The consultant attended a meeting of the main donors in the health sector and gave a
brief presentation on Macroeconomics and Health in general and the ToR for the consultancy
in Nepal. A meeting was also organised by WHO and the MoH to meet with the core
members of the National Commission for Macroeconomics and Health, with whom the first
findings of the mission and the Plan of Action for the preparatory phase were discussed. At
the end of the misson a debriefing took place at the MoH, where the consultant gave a power
point presentation, which was provided to WHO in Geneva and Nepal for further
dissemination.
MEH/Nepal/Situational Analysis, April 2004
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Nepal Context2
Physical
 Nepal is a landlocked country. The Himalaya mountain range in the north is bordering
China (Tibet actually) and a flat jungle belt (terai) in the south is bordering India, with
hills in the middle. The country is very fragmented by mountains and rivers.
 Due to its physical isolation, Nepal only opened to the outside world in 1951.
 Even today a large part of the country remains inaccessible by modern transport and
communications.
 The environment is very fragile and an increasing population causes deforestation,
erosion and pollution problems. Each year the summer rains cause landslides. Nepal is
also earthquake prone.
Demographic
 Nepal has 24.2 million inhabitants (estimate 2003)
 1,5 million of which live in the Kathmandu valley (23x12 km)
 1.8 million (7.4%) live in the mountains, which make up 35% of the land area
 10.8 million (44.6%) live in the hills, which make up 42% of the land area
 11.6 million (48%) live in the terai, which make up 23% of the land area
 14 % of the population lives in urban and 86% in rural areas
 Population growth is presently 2.27%
 TFR is 4.1 (DoHS 2001)
Administrative
5 development regions divided into 14 zones and 75 districts:
Eastern Region has 16 districts and a population of 5.7 million (23.6%)
Central Region has 19 districts and a population of 8.2 million (33.9%)
Western Region has 16 districts and a population of 4.9 million (20.2%)
Mid-Western Region has 15 districts and a population of 3.2 million (13.2%)
Far Western Region has 9 districts and a population of 2.2 million (9.1%)
Districts are divided into total of 205 electoral constituencies and 3,995 Village Development
Committees (VDC) and 58 municipalities. Each VDC has 9 wards and each ward comprises
3-5 villages.
District Development Committees (DDC) are responsible for the political and economic
development of their respective districts. The Local Self Governance Act 1999, empowers the
DDC to function as an integrated development institution in line with the national
decentralization policy. Furthermore, this act delegates development authority to the
respective municipalities and villages.
Political
 Nepal was never colonised
 It is constitutional hindu monarchy
 Nepal has a multiparty bicameral parliamentary democracy since 1990: a Lower
House with 205 members and an Upper House with 60 members. The country is very
politically unstable. In October 2002 the King dismissed parliament and later
government, and appointed a Prime Minister. At present 5 ministers run 20 ministries.
2
Nepal, Landenreeks. KIT Publishers 2002, Annual Report MoH 2001/2002, PER Health Sector MoH 2003
MEH/Nepal/Situational Analysis, April 2004
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


During the consultants’s stay in December 2003 fierce student protests broke out,
supported by the 6-7 major political parties. They demanded the King’s decision be
repealed, democracy be restored and dialogue with the Maoist groups, which were
broken off in August 2003, be resumed.
Because of the aphno manche system every change of government means replacement
of a large number of government officials, not only at the central level, but also at
lower levels, causing severe problems with administrative capacity and lack of
continuity in policies and governance in general, resulting in inefficiency.
The country also suffers from a high level of corruption. Payment of baksheesh is
standard practice.
An increasingly large percentage of civil servants and politicians are brahmins or
chetris (98% of civil servants). In December 2003 a proposal was filed stipulating that
at least 20% of seats in parliament should be reserved for women, 10% for dalits (the
lowest caste) and 5% for ethnic groups.
Economical
 One of the poorest countries in the world and the poorest on the Eurasian continent
with GDP of around $250 p/c (2003) or PPP $1310 (2001)
 The currency is the Nepalese Rupee. In December 2003 US$1 buys around 73
Nepalese Rupees. Inflation has been 8-10% per year over recent years3.
 Almost entirely economically dependent on other countries, mainly India.
 80% of population works in agriculture, being the largest economic sector, followed
by small-scale industry.
 Unemployment causes many people to find work abroad, sending home 1 billion euro
a year, more than tourism, foreign aid and export together bring into the economy.
 Large inequalities: 13% of the population earns 50% of the national income. Average
income in Kathmandu is 4-5 times that in the rural areas.
 Only 15% of households is connected to the electricity grid.
 80% of the population has access to safe water (UNDP 2001)
 Nepal has entered the World Trade Organisation in 2003.
Social
 Human development index 2001: 0.499
 Gender Development Index 2001: 0.479
 Very patriarchal, hierarchical society, linked to the caste system, strong religious and
family traditions and a feudal structure. The Nepalese caste system is made up of
some 100 different castes. People from the same caste/family favour each other
(aphno manche) and citizens often show their loyalty to influential persons by visiting
them, in the hope to be rewarded at some point in the future (chakari).
 Women are supposed to be and often are subordinate to men, have to work longer
hours, doing heavy physical labour. Abortion was illegal and punished with life-long
imprisonment until abortion for medical reasons was legalised in 2002. Most
marriages are still arranged.
 The modern world has definitely arrived in Kathmandu, but outside the capital many
people still live without running water, electricity, telephone, radio and tv.
 The country has one official language: Nepali, the language of the brahmin and chetri
castes, but Nepal harbours 20 languages and many more dialects.
3
Oral information MoF Shyam Nidhi Tiwari
MEH/Nepal/Situational Analysis, April 2004
14

Civil society is well developed. There are many indigenous and international NGOs, a
diverse and free press and human rights organisations, many of them also externally
funded.
Religion
 Hindu 60%, Buddhist 30% with animist, muslim and christian making up the
remaining 10%
 So far little or no religious unrest.
Ethnic
 Two main population groups can be distinguished: Mongol (35%) and Indo-Aryan
(65%).
 The Mongols live mainly in the north, speak Tibeto-Birmese languages and are mainly
buddhist
 The Indo-Aryan population live in the middle belt and the south, speak a Sanskrit
language and are hindu.
 Both brahmins and chetris belong to the hindu Indo-Aryan population groups.
 These two broad ethnic groups can be subdivided into some 60 different ethnic and
caste groups each with their own language, culture and religious rituals. Some
population groups contain different castes and ethnicities.
Education
 Adult illiteracy is very high, with almost 40% of men and 75% of women not able to
read or write (UNDP 2003).
 Only 2/3 of children go to primary school, of the dalits only 1/3.
 In the budget speech for FY 2003/2004 the Minister of Finance announced that all the
children from Dalit families admitted in primary schools will be provided with
scholarships. An amount of Rs. 81.7 million has been earmarked for this purpose.
Poverty
 Poverty is widespread. An estimated 38% of the population live below the poverty line
($1 a day), in rural areas 41.4%, in urban 23.9%, in the mountains 56%, among dalits
90% (partly UNDP 2001).
 This percentage has not changed much during the last 25 years, meaning that the
absolute number of people living in poverty has increased.
 The target for the MDGs is 17%.
 Income poverty is more common in rural areas, where 90% of the poor live, in the
mid-western and far western development regions, among mountain villagers, women,
certain ethnic groups, called Janajati, and the lowest castes (Dalits). While the poverty
rate for Kathmandu is 4%, it is as high as 72% in the remote areas of the Mid-Western
and Far-Western hills and mountain regions. Poverty is most intense/severe among the
mountain populations.
 Similar disparities exist for literacy rates, life expectancy, percentage op population
having access to drinking water and the Human Development Index (HDI) in general.
 Breakdowns are generally given by ecological area, urban/rural, and development
region. Whether they are also available by district, needs to be checked.
 Factors contributing to persistent poverty, mentioned in the PRSP, are limited resource
endowment, ill health, rugged terrain, isolation, a high population growth rate of
2.2% per annum.
 Economic growth over the past decennium has largely bypassed the rural poor.
MEH/Nepal/Situational Analysis, April 2004
15
Security
 The country is torn by a conflict between Maoist
groups and the government security forces, which
started in February 1996 and escalated in November
2001, after several months of peace talks broke down.
 The Maoist goal is to replace the present polity with a
“people’s republic” and finds its justification in the
deep poverty and social exclusion of large parts of the
population, grievances about poor governance,
corruption, lack of land reform, caste discrimination,
control by economic and political elites etc.4
 A cease-fire was agreed in January 2003, and peace
talks began once more, but were broken off again in
August 2003.
 The Maoist groups are in control of most remote hilly
areas, particularly in the western part of the country.
In those areas they have developed parallel or
replacement structures, following government
withdrawal. In Rukum district they have held
elections, established a people’s court and tax offices5.
 Their methods of gaining influence have become more
violent over time and security is seriously threatened
in many parts of the country. They impose strikes,
even in schools, organise roadblocks, abduct people
and use methods of forced protection.
 Government staff cannot travel in government cars to
numerous districts.
 Between August 2003 and December 2003 alone
around 500 people have been killed in the conflict.
Maoists abduct over 2,000,
abduction results in exodus
The Maoist rebels on Monday abducted
over 2,000 people from the south-east
part of Kanchanpur district, various
dailies Thursday said.
According to the Nepal Samacharpatra,
the rebels abducted over 2,000 youths
and students from Tribhuvan Basti,
Parasan, Shripur, Laxmipur,
Raikbarbichuwa, Baisebichuwa,
Shankearpur, Kalika and Beldandi
VDCs in Kanchanpur district. The
rebels took them away in 28 tractortrailers to unidentified locations.
With the Maoists escalating their
abduction campaign in the district,
5,000 youths from the district have
started fleeing their villages to
neighboring Indian towns, Rajdhani
daily said Thursday.
nepalnews.com April 08 2004
Maoists abduct over 60 teachers
in Taplejung
Over 60 teachers from Singam VDC in
Taplejung district were abducted by
armed Maoist rebels on Tuesday to
force them to participate in the
‘peoples’ oriented education’ campaign,
reports said.
nepalnews.com Apr 15 2004
Government finance
 In his budget speech on 17 July 2003 the Minister of Finance announced that the
revised estimate of income and expenditure over the FY 2002/20036 shows a total
expenditure of Rp 84.6 billion, 67% on the regular and 33% on the development
budget. Recurrent costs made up 75% of the expenditures, capital costs 25%. Of total
expenditures Rp 9.5 billion or 11% was used for repayment of principal debts.
 The sources of financing consisted of Rp 55.3 billion from domestic revenues and Rp
8.4 billion from foreign grants. The deficit of Rp 21 billion was borrowed, Rp 9 billion
from multilateral donors and Rp 12 billion from domestic sources. The total
expenditure translates into $48 per capita7. This is 19% of the estimated GDP per
capita of $250.
4
Karki, AK (2002) A radical reform agenda for conflict resolution in Nepal, May, 2002. Cited in Collins et al
2003.
5
Philipson, L (2002) Conflict in Nepal: perspectives on the Maoist Movement, May 2002. Cited in Collins et al
2003.
6
Nepal’s FY runs from 16 July – 15 July.
7
84.6B NR/pop24.2M/exchange rate73=$47.89
MEH/Nepal/Situational Analysis, April 2004
16








The estimate of government revenue for FY 2003/2004 is 62.2 billion on a total
budget of Rp 102.4 billion.
The main sources of domestic revenue are indirect (61%) and direct taxes (17%).The
main earners from indirect taxes are import duties,VAT and excise duties; the main
earner from direct taxes is corporate income tax. Revenue from excise duty on
cigarettes is Rp 2.3 billion, from alcohol Rp 2.5 billion, together good for 7.7% of
domestic revenue and 4.7% of the total budget. Remuneration tax brings in Rp 1.3
billion only (2.1% of domestic revenue and 1.25 % of total budget). Foreign grants are
expected to increase to Rp 15.5 billion (15.1% of the resource envelop), mainly due to
a doubling of grants by bilateral donors. The foreseen deficit of Rp 24.6 billion is
expected to be financed by foreign and domestic loans on a 50/50 basis.
The amount of foreign grants only includes the funds that go through the MoF (the socalled Red Book). The real amount of external funds is much higher, as a substantial
percentage of foreign aid goes directly to the other ministries, the districts, or through
NGOs.
Personal income tax is progressive, with the first 80,000 Rupees per year for a single
and the first 100,000 Rupees for a couple being exempt (0%). The next 75,000 Rupees
are taxed at 15%, any higher income than 175,000 is taxed at 25%. Only people in
formal employment with government, larger companies or organisations pay income
tax.
VAT is 10% for all items that are taxed, but many items are VAT exempt, such as
unprocessed food, lifestock and basic commodities such as oil, water, kerosine, salt
etc.
Domestic revenue is largely used to meet regular, recurrent expenditure (53% of the
recurrent budget is for salaries), while development expenditure is increasingly
dependent on domestic borrowings and foreign assistance. Of the 41.8 billion
development budget for FY 2003/2004 75% is destined to be spent at the central level
and 25% will go to the districts. The development budget for the poor Mid-and FarWestern regions has been increased by 34% to 6.5 billion Rupees.
17.1% of the total budget (24% of the recurrent budget) will be used for domestic and
external debt servicing. Nepal does not qualify for the Heavily Indebted Poor
Countries (HINPC) scheme, so no savings from debt relief are foreseen.
Compared to the Rp 15.5 billion budget for the education sector, the 2003/2004
budget for the health sector is small with Rp 5.2 billion, which is 5.1% of the total
government budget, $2,94 per capita or 1,18% of GDP. Of this amount Rp 3.2
billion is for development expenditure.
MEH/Nepal/Situational Analysis, April 2004
17
The Health Sector
Ministry of Health
The MoH has a central section and three Departments: Department of Health Services
(DoHS), Department of Ayurveda (traditional medicine), and Department of Drug
Administration. The central MoH is responsible for policy making, planning, financing,
international cooperation, human resources, monitoring and evaluation, as well as for the
central and zonal hospitals. According to the NHSP-IP in practice senior officials spend most
of their time in personnel management and non-policy issues. The policy and planning
division of the MoH has 9 staff, who on average have been there 2 years and their capacity is
inadequate. The Health Economics and Financing Unit (HEFU), supported by DFID, is
headed by an economist from the MoF and has (among other staff) two health economists
with a degree from Chulalongkorn. The MoH, like all ministries, suffers from the frequent
changes in government, frequent appointment of new leaders and/or transfer of staff.
The DoHS is responsible for the provision of all health services at the district level and below
and produces the Annual Report.
Regional Health Directors are responsible for technical backstopping as well as programme
supervision. Their role seems to become less clear under the decentralisation process.
At the district level and below, DDCs and VDCs are functionally responsible for the delivery
of health services.
Policies, strategies and plans
Over the years a number of policy documents and plans have been produced. It seems that
more or less simultaneously two sets of documents were developed, one government driven
and related to the 5-year development plan cycle, the other EDP driven. There are clear
interlinkages between the two sets of documents, although there are also quite some
differences. It seems that the detailed work done by the MoH jointly with the EDPs has to
some extent informed the development of the documents for the Tenth 5-year Plan. Officially
the MoH is bound by the Tenth Development Plan and its MTEF.
Below a schematic overview of production of all the main papers is given on a timeline. The
shaded ones relate to the Tenth Plan. Annex 1 contains a summary of the ones, that appear on
the MoH website (downloaded on 3 January 2004).
Timeline
Document
1991
<><>
1999
National Health Policy
MoH
Second Long Term Health Plan 1997-2017
MoH/NPC/EDPs/private/NGOs
2000
Strategic Analysis
Operational issues and prioritization of resources
Medium Term Strategic Plan
MoH/EDPs
WB
MoH/EDPs
2001
none
2002
Medium Term Expenditure Programme
MEH/Nepal/Situational Analysis, April 2004
Main agencies involved
MoH/NPC
18
2003
Medium Term Expenditure Framework Health
Nepal Health Sector Strategy
MoH/NPC
MoH/EDPs
Tenth Plan
MTEF
Nepal Health Sector Program Implement Plan 2003-2007
PRSP
Public Expenditure Review of the health sector
Joint Staff Assessment PRSP
NPC/Sectoral ministries
NPC/MoF
MoH/EDPs
NPC
MoH (HEFU)
WB/IMF
Below each of these documents is briefly described; in particular those features that have a
specific bearing on the Macroeconomics and Health work are highlighted.
National Health Policy 1991
In 1991 a National Health Policy was adopted. It’s primary objective was to extend the PHC
system to the rural population. In order to bring basic preventive, promotive and curative
health services to the whole population the plan states that:
 Sub Health Posts will be established in all Village Development Committees and
mobile teams would provide specialist services to remote areas.
 Priority will be given to reduction of infant and child mortality.
 Hospital capacity will be based on population and patient loads and hospitals will be
integrated into District Health Offices. A referral system will be developed.
 Training institutions will be strengthened in order to deliver competent staff for all
health facilities.
 Alternative ways to mobilise more resources will be explored, such as insurance, user
charges and revolving drug schemes
 Community participation will be sought and activities will be coordinated with NGOs,
private sector and other government sectors
 Planning and management will be decentralised to the district level
Second Long Term Health Plan 1997-2017
The SLTHP, published in August 1999, is to serve as a resource document for the preparation
of successive five-year development plans and annual plans and will be periodically reviewed
on the basis of evaluations. The SLTHP focuses on improving the health status of ‘those
whose health needs often are not met: the most vulnerable groups, women and children, the
rural population, the poor, the underprivileged and the marginalized’8. Disparities in health
status would be addressed, assuring equitable access for the poor and vulnerable groups, with
full community participation and gender sensitivity. Government and EDP funding should
focus on areas of greatest need.
Given resource constraints priorities have been set. Based on the demographic and disease
profile (likely from the burden of disease study 1997) a package of Essential Health Care
Services will be delivered at the district level and below before HMG and donor resources are
diverted to provision of tertiary care. The SLTHP specifically mentions that resources should
be redirected from high-cost low-impact interventions to the low-cost high-impact
EHCS , while also improving effectiveness and efficiency.
8
Depending somewhat on the definitions of some of these terms, these groups combined could easily cover 90%
of the population.
MEH/Nepal/Situational Analysis, April 2004
19
With regard to health financing, the Plan states that a ‘safety net’ will be maintained to
ensure that the needy and underpriviliged populations are not deprived of necessary health
care because of inability to pay. Information on central and district level expenditures will be
made more transparent and base-line data on public budgets, private expenditures and
cost-sharing will be collected at the district level.
HMG intends to decentralise (devolve – MP) responsibility and budget for PHC services to
the District Development Committee, which will also be allowed to generate and retain local
resources. Capacity for planning, management, supervision, monitoring and evaluation will be
strengthened.
The SLTHP includes targets for major outcome indicators (see page 2 and 3 of Annex 1). As
output target the Plan wants the EHCS at the District to be available to 90% of the population
living within 30 minutes travel time.
The SLTHP includes key issues and policy options for the following areas: burden of disease,
EHCS at the district, HCS beyond the district, health service delivery system, human
resources for health, health financing, inter- and intrasectoral collaboration and
decentralisation, management and organisational constraints, quality assurance, essential
national health research, as well as the changing trend in communicable and noncommunicable diseases. It also mentions a number of emerging health issues that have not
been dealt with and need to be addressed in the upcoming Five-year development plans.
In September 1999 the Cabinet approved the EHCS package as part of its approval of the
second SLTHP (see page 5 of Annex 1).
The SLTHP describes many interesting policy options, but only a few of these refer
specifically to improving access to health care services for the poor, although the overall
objective of the Plan is to improve the health status of the needy. There is for instance no
mention of the need to expand or upgrade the number of facilities in rural and remote areas.
As usual targets are national averages. In the context of the objectives it would also be more
meaningful to have specific targets and indicators for the vulnerable, women, children, rural
populations and specifically for the poor. To reflect this the health management information
system would need to be adapted. It would be helpful to disaggregate information on health
status and utilisation by gender and income quintile for example.
Strategic Analysis to operationalise the SLTHP
In the fall of 1999, immediately after the SLTHP was published, HMG of Nepal and the EDPs
together made a strategic analysis of the health sector, which was published in May 2000. It
replaced individual EDP reviews. Its main purpose was to map out the action needed to
develop capacity in order to improve delivery of health services. It would also serve as input
to the 10th Five-year Development Plan. Four technical working groups reviewed the
institutional context and relationships with EDPs, the capacity to turn policies into plans, the
capacity to deliver the EHCS package, the capacity to regulate the private sector, and the
capacity to meet the needs of the poor.
The commitment to equity and meeting the health needs of the poor regardless of ability to
pay is repeated. The analysis mentions that there is lack of information on the extent of
inequity in provision and access to services, as well as on the way in which policies and
management systems affect equity. There are no guidelines with respect to exemption of user
MEH/Nepal/Situational Analysis, April 2004
20
fees for the poor. It is noted that given the expected future level of finance the identified
EHCS will need to be further prioritised and choices will have to be made as to which
population groups will be supported by government to receive these services. It is further
noted that, contrary to agreed policy, more funds are flowing towards secondary and tertiary
level hospital services, while the share going to PHC fell from 77% in 91/92 to 57% in 97/98.
Due to lack of staff, drugs, equipment and maintenance, as well as poor supervision, public
facilities have lower utilisation rates than private and NGO ones. Overall government
spending on health remains low and there is considerable donor dependence.
The Strategic Analysis recommends the following actions that could specifically benefit the
poor:
 Encourage the private sector and NGOs to provide EHCS and consider contracting
out.
 Advocate for additional resources from HMG
 Develop alternative sources of financing
 Increase community participation
 Develop guidelines with respect to user fees (exemption rules)
 Strengthen training institutes and identify future need for health workers
 Link (integrated) budgets to priorities, performance and outcomes
 Move towards a SWAp in order to use funds more efficiently and decrease transaction
costs, starting with a medium term health strategy and financing framework that all
stakeholders will agree to
 Establish a monitoring system that will assess the impact of the health strategy on the
health status of the poor
WB study - Nepal: operational issues and prioritization of resources in the health sector
A month later, in June 2000, the World Bank issues its own, often cited, study on the health
sector. It was based on several studies and workshops done between 1996 and 1999, in
conjunction with the formulation of the SLTHP. The report analyses the burden of disease in
Nepal, investigates whether allocation of resources corresponds to the main health problems
and what the main problems affecting the health delivery system are. The key findings of the
report, all of which are consistent with the priorities of Nepal’s Second Long-Term Health
Plan, include the following:

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



Expected population growth of 60% in 20 years will mean that a corresponding
increase in health services will be necessary just to sustain the current level of
inadequate services.
Regional disparities in health indicators and health care are large (e.g. life expectancy
ranges from 37 to 74 years).
Nepal’s burden of disease will remain dominated by infectious diseases and maternal,
perinatal, and nutrition-related disorders during the next decade. These disorders
represent 69% of the BoD in Nepal. Degenerative and non-communicable diseases
account for 23% and injuries and accidents for 9%. Children <5 bear 51% of the BoD.
Targeted interventions should be aimed at disadvantaged areas and the poor.
Interventions outside the health sector-particularly efforts aimed at improving water,
sanitation, and public hygiene-would have a strong influence on the burden of disease,
in particular of the poor.
Current public sector allocations for the health sector are low and poorly allocated.
Quality-enhancing nonsalary recurrent budget allocations are woefully inadequate,
and resources will remain constrained for years to come.
MEH/Nepal/Situational Analysis, April 2004
21


Institutional weaknesses and ineffective programme management are at the root of
poor service delivery. Capacity for strategic planning, policy development, resource
mobilisation and coordination is very limited. Absorption capacity is therefor also low.
The private and NGO sectors are active, unregulated and the care they provide is often
poor quality.
Recommendations suggest an increased political commitment, focusing on infectious
diseases, maternal, and prenatal ailments, and nutrition deficiencies. In addition, institutional
capacity should be developed, and better health care systems ensured through public-private
partnerships. Priorities should be established through careful planning, appropriate
management, and financial availability. Detailed recommendations include limiting the role of
the public sector to basic preventive and essential clinical care, expand public infrastructure in
underserved areas and decentralise facility management.
Medium Term Strategic Plan (MTSP)
The follow-up of the strategic analysis was the Medium Term Strategic Plan, a logical
framework that was developed later in 2000 to provide operational support for the SLTHP.
More specifically, the MTSP provided the strategic framework for developing the health
component of the Tenth Five Year Plan (2002-2007). The objectives for the medium term
(still operational) are:




To develop an effective health system for the provision of affordable and accessible
Essential Health Care Services (EHCS)
To promote a public-private-NGO partnership for the provision of healthcare
To decentralise the health system and ensure participatory approaches at all levels
To improve the quality of health care provided through the public/private/NGO
partnership by total quality management of human, financial, and physical resources.
For each objective several outputs have been defined, whereby especially the outputs for the
first objective refer to equity and reaching the poor. It mentions improved access to and
utilisation of health services by the poor and vulnerable, as well as a safety net for providing
them with access to services “beyond the EHCS”.
Medium Term Expenditure Programme (MTEP)
Probably in the first half of 2002 the MoH drafted an MTEP (written by a local consultant) to
operationalise the first three years of the Tenth 5-year Plan under development by the
National Planing Commission (NPC). It clearly draws on the Strategic Analysis and the
Medium Term Strategic Plan and concisely sums up the vision, mission, policies, strategies
and lists the 4 objectives, 8 outputs and identifies a number of activities per output.
Separately17 key quantitative targets are listed. It is not clear how they relate to the outputs
and activities. The document also gives an overview of priority levels for each MoH
programme and organisational units and includes a cost estimate for 3 years per the same.
Programmes and organisational units listed as Priority 1:
1. Child Health: regular immnization (excl. Hep B); national immunization day; CDD;
Vit. A and micronutrient supplementation;
2. Family Planning; Safe Motherhood; RH;
3. Epidemiology and Disease Control: communicable disease; emergency preparedness
and disaster management;
4. TB control programme
MEH/Nepal/Situational Analysis, April 2004
22
5.
6.
7.
8.
Leprosy Control Programme
HIV/AIDS/STD
Hospitals: Teku, Bir, Kanti Children’s, Maternity and Bhaktapur
All district hospitals; PHC Centers; HCs; District Public Health Offices; Health Posts;
SHPs
9. Organisation: MIS; NHTC; Medical & Inst. Supplies; Health Laboratory; Community
Drugs; Health Insurance; Institutional Capacity Building in relation to
Decentralisation; Health Poverty Alleviation Fund (PAF)
The cost estimate was prepared expecting a 20% reduction in the health budget for 2002/2003
(Rps 3,802 billion as compared with the previous year 4,581), while for the 2 consecutive
years an increment of 10% each is foreseen. This was probably based on advance information
from the MoF about the available resources.
Medium Term Expenditure Framework for Health (MTEF-H)
This document was prepared by the MoH (5th draft in July 2002) for the first 3 years of the
10th Plan as input into the Tenth Plan. The MTEF-H was based on the above MTEP, but used
higher budget estimates (2002/2003 allocation 4,872 billion). The MTEF-H reiterates the
goal, vision, mission, policies, strategies and key reforms of earlier documents. The MTEF-H
provides somewhat lower, probably more realistic targets for the 17 key indicators, with the
2002 status as a baseline. It also adjusts the priority levels, based upon burden of disease,
implementation capacity, equity considerations and on whether the programme is directed at
the poor and vulnerable. A number of programmes and all hospitals are prioritised down to
level 2. On the other hand some programmes are included in total, while the MTEP specified
certain components.
The MTEF-H lists the following programmes as Priority 1:
1. National TB Center and National TB Programme
2. AIDS and STD Center
3. Population and Family Health
4. Family Planing and MCH Programme
5. National Immunization Programme
6. CDD and ARI
7. Nutrition Progamme
8. Epidemiology; Malaria and kala-azar; Natural Disaster management
9. Leprosy control
10. Drug supply
11. HMIS
12. NHEICC
13. Vector Borne Disease Research Training and Control
14. Community Drug and Health Insurance
A Policy Matrix gives an overview of programmatic activities, indicators and targets for each
of the 13 (rather than 8) outputs related to the 4 objectives.
The MTEF gives 3-year and 5-year budget estimates broken down by regular and
development budget (both further divided into recurrent and capital expenditure) and by
priority level. In the following tables the breakdown is shown for the first 3 years.
MEH/Nepal/Situational Analysis, April 2004
23
Budget breakdown by priority level in percentages of total health sector budget
Priority level
Expenditure 2001/2002
Budget estimate 2002/2005
1-highest
48
57.6
2-medium
7
27.2
3-low
45
15.3
Interestingly these drastic changes in breakdown are not gradual, but foreseen for the first
year 2002/2003 immediately, which seems very unrealistic, as many hospital costs are
included in the 3rd priority level, and they are notoriously difficult to downscale. It will soon
be known in how far the MoH succeeded in this.
The MTEF also gives a budget breakdown by objective and as can be seen below almost ¾ of
the budget is reserved for the provision of the EHCS.
Budget breakdown by objective in percentages of total health sector budget
Objectives
Budget estimate 2002/2005
Provision of EHCS
72.6
Promote PPP
9.2
Decentralisation/participation
9.1
Improve Quality of services
9.1
The revised expenditure for the health sector 2001/2002 as mentioned in the MTEF-H was
5.195 billion Rupees. The allocation for 2002/2003 is less: 4.872 billion. For the forecast for
2003/2004 and 2004/2005 the regular budget was increased with 3% per annum and the
development budget with 10%. The target in the MTEF for health sector expenditure as a
percentage of total HMG budget is 6.5, while in 2003/2004 the real MoF budget for the health
sector was only 5.1% of the total government budget.
As said this MTEF-H served as input into the Tenth 5-year Plan, which is the operational
document that the MoH is bound to and includes the final budget. See below.
Health Sector Strategy (HSS)
On the basis of the joint Strategic Analysis of 1999, HMG, NGO and private sectors and
EDPs in the mean time continue to work together in a series of workshops and consultations
led by the Health Sector Reform Committee. In August 2002 the Health Sector Strategy is
finalised. It (again) provides a concise situational analysis, lists 6 key issues with their
strategic implications and goes on to formulate 3 programme outputs and 5 Sector
Management outputs, based on the previously agreed 4 objectives. It announces that a costed
sector plan will be drawn up to deliver this strategy, covering the Tenth 5-year Plan period
and taking account of its MTEF, which is being developed at the same time. Although the
latter gives the impression that the costed plan will be based on the available resource
envelop, interestingly it is mentioned that “it will identify the additional financial and
technical support needed for its implementation. Negotiations can then take place with EDPs
as to how that support can be made available”.
Tenth 5-year Development Plan
This Plan of over 600 pages covers the years from mid-2002-mid 2007 and was approved by
the Cabinet in Feb 2003. It took 2 years to develop. During this process it became clear that
MEH/Nepal/Situational Analysis, April 2004
24
the fiscal situation was deteriorating and available resources for the Tenth Plan would be less
than previously expected (38 billion, rather than 50 billion Rupees for the development
budget). Therefore preparation of the MTEF was started by end 2001, so that the Plan could
be scaled down as necessary, while protecting the key priorities. The principle was
established that P-2 and P-3 activities would only be funded if funds would still be available
after providing for the P-1 activities.
It contains a 20-page chapter on health, written in a diferrent style and wording than any of
the other documents mentioned above. It seems to be a truly Nepali product. Also the content
is different from what the MoH produced before. The consultant does not have any
information at this point how, why and by whom decisions on changes were made, but this
seems to be important to find out for future planning.
The Health Chapter starts out to compare progress of the Ninth Plan with its targets. Most
targets have been met, except for delivery of obstetric care by trained health workers and
child mortality. In the case of obstetric care this is probably due to a change in definition of
what constitutes a trained health worker (local birth attendants – sudenis – are no longer
counted as such).
The overarching national objective for health as formulated in the Tenth Plan clearly links
health to poverty reduction:
“Reduce the magnitude of poverty among the Nepalese people substantially and sustainably
by developing and mobilising the healthy human resource”.
The two objectives deduced from this include improving quality of health services, access by
the poor, especially in rural and remote areas, and specifically access to RH and FP services
in rural areas to bring down population growth rates and improve maternal health. Bring
down popualtion growth rates did not feature in any of the MoH policy documents before.
Decentralisation and promoting public-private partnerships are not mentioned as objectives,
but as strategies to reach the objectives. The chapter goes on to describe 7 strategies related to
the 2 objectives and the policies related to the strategies in a fuzzy way. The relationship
between goals, objectives, strategies and policies is not very logical, nor clearly quantified.
The plan also lists 16 key health indicators for the Plan’s period, ending in 2007. They are
based on the status in 2002 and targets are given for the general and the alternative growth
scenario. See Annex 2.
Fully consistent with the MTEF-Health the following programmes are labeled Priority 1:
1. Expanded vaccination and national polio vaccine
2. Control of ARI and DD
3. Nutrition
4. Safe motherhood and FP
5. RH of adolescents
6. Female community health volunteers and trained traditional birth attendants (sudenis)
7. Prevention and Control of malaria, kala-azar, tuberculosis, leprosy and
HIV/AIDS/STDs
8. IEC
9. Natural disaster management
10. Centre for vector-borne diseases and their control, research and training
11. Supply management.
MEH/Nepal/Situational Analysis, April 2004
25
12. Essential medicines
13. Health insurance
14. Information management
Health training, some key hospitals as the children’s hospital, maternity hospital and
infectious disease hospital, as well as auxiliary services, monitoring and evaluation and
research, and urban health and ayurveda services have been given priority 2.
A specific target for access to facilities is included: a health institution or outreach clinic
should not be more than 2 km or one hour walking away. In line with poverty focus the Plan
also promises special programmes in Far Western and Mid-Western Development Regions.
In the context of disparity in the conditions of the health services mention is made of “an
independent national Microeconomic (!) Health Commission, to be set up within the accepted
structure of the national programme for poverty eradication”.
The Plan includes a budget for each of the 43 programmes, divided over the priority levels, as
shown in the table below. Under the expected average growth rate of 6.2%, the Tenth Plan
allocates almost 5% more to P-1 programmes than the MoH did in their MTEF-Health, at the
expense of P-3 programmes. Under the alternative average growth rate of 4.3% (which is the
operational basis at present9), the P-3 programmes are scheduled to loose 90% of their
funding, in order to keep the P-1 programmes fully operational. Given the fact that the
average growth rate during the Ninth Plan was 3.6% even the lower alternative growth rate
seems to be optimistic. And the realism of scaling down government support to P-3
programmes (mainly hospitals) with 90% is questionable.
Source: Tenth Plan, Chapter 24.9
Nepal Health Sector Programme – Implementation Plan 2003-2007 (NHSP-IP)
The Plan, based on the Health Sector Strategy of August 2002 and developed under the
guidance of the Health Systems Reform Committee, is ready one year later, in August 2003,
but without a financial paragraph. For each of the 8 outputs the IP describes which of the 24
longterm strategic objectives are supported by the output, and lists the activities that will be
undertaken and their key indicators. New health reform actions are added to the existing
activities EHCS programme (see Annex 3). In the accompanying logical framework also the
means of verification and assumptions are included. Many targets (OVIs) do not carry a
specific percentage however, but show X%. Whether this has not been agreed yet, or whether
9
PRSP para 177/page 65
MEH/Nepal/Situational Analysis, April 2004
26
the consultant had a non-final copy of the document is not clear. “The key focus of the IP is to
increase the coverage and raise the quality of the EHCS, with special emphasis on improved
access for poor and vulnerable groups”. Key new activities, relevant for this situational
analysis, include:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
costing of and resources allocation for EHCS
redefine institutional arrangements for delivering EHCS
develop systems for priority access for poor and vulnerable groups
introduce local management of sub-health posts
establish district level health co-coordinating committees
update inventory of existing private/NGO/public involved in health sector, by district
define an appropriate public/private/NGO mix for each district
strengthen regional and district management
capacity building at central and district levels
identification of health sector priorities and reallocation of resources to priorities services
alternative financing arrangements, such as community health insurance, explored
MoH to develop national guidelines for user fee practices and other payments in public facilities
drug financing mechanisms strengthened to support increased and equitable availability of essential
drugs
A Programme Preparation Team estimated the resource envelope for the health sector over the
Tenth Plan period. The most realistic scenario, based on 4.6% GDP growth, a revenue growth
of 14%, foreign assistance at 4.6% of GDP, a budget deficit of 2.7%, a 5.2% share of the govt
budget for health and 70% of that for the EHCS, comes to a total of $US 663 million over 5
years (1$ =78 rupees), which translates into $4.72 per capita annually. This includes donor
funds in and outside the Red Book. The report concludes that this is a far cry from the $12 in
the WDR 1993 and the $34 mentioned in the CMH report. However real costs might be less
in Nepal, but cost information on the EHCS are not available, and the IP announces cost
studies and cost estimations by key programmes, divisions and centres.
The World Bank has in the mean time commissioned a study to cost the NHSP-IP and provide
unit costs of the EHCS. The results of this exercise will be available in April 2004. The
consultant received a draft report dated 25 February 2004, which seems to not include all
costs involved in scaling up to meet needs and does not make use of real country data in many
cases.
The NHSP-IP also includes an Annual Planning Cycle timetable. It is intended as a move
towards a SWAp, but as yet the majority of donors does not favour pooled funding. The Plan
indicates a big move towards a joint vision however, and HMGN and EDPs have agreed to
joint planning and review exercises.
PRSP and JSA
A “more sharply focused” summary of the Tenth plan functions as the PRSP, dated May
2002. It received a positive Joint Staff Appraisal in October 2003.
The following health indicators made it into the key goals and targets in the PRSP:
Infant mortality rate, total fertility rate, maternal mortality rate, contraceptive prevalence rate,
obstetric services by trained manpower, average life expectancy.
Annex 4 contains major paragraphs from the PRSP dealing with or relevant for health.
Strangely enough many details are quite different from the health content of the Tenth Plan.
For instance the PRSP clearly indicates expansion and upgrading of PHC centres and district
hospitals and strengthening outpatient care in hospitals. These objectives have not been
MEH/Nepal/Situational Analysis, April 2004
27
encountered in any preceding document. The Policy Matrix in logframe format also includes
many different activities and indicators than the NHSP-IP.
Conclusion on policies, strategies and plans
Many good documents have been prepared by HMGN and the MoH in collaboration with
EDPs. The problem seems to be that the most current, prevailing documents have somewhat
different objectives, strategies and activities. The main govt document in force is the Tenth
Plan, the health chapter and budget of which are organised by priority programme and/or
organisational centre, probably following present budget lines. The NHSP-IP, more donordriven, is organised by objectives, outputs and activities in a logical framework and does not
have a budget yet. The PRSP, supposed to be a summary of the Tenth Plan, contains
elements of both the Tenth Plan’s Health Chapter and the NHSP-IP, but also includes new
activities. It is therefore not clear at this point which document the MoH is implementing and
using to monitor its activities. It would be helpful, if a detailed comparison was made between
the IP, the Tenth Plan and the PRSP, after which the MoH, NPC and MoF could sit together
with the EDPs and decide which activities they will implement together.
Provision of health services
Public health facilities
The government of Nepal has constructed or upgraded a Health Post (HP) or Sub Health Post
(SHP) in 97% of VDC areas and a PHC centre in 93% of electoral constituencies. There are
83 public hospitals over the kingdom. There are 4 districts without PHC level facilities and 4
districts without a hospital (not the same districts). In 2003 there are in total 4,439 public
health facilities under Ministry of Health: 3,170 SHPs, 700 HPs, 190 PHCs/HCs, 67 district,
11 zonal and 5 central hospitals. At the lowest level 15,548 PHC outreach clinics are being
operated from the HPs and SHPs. Government also operates 6 military hospitals, 1 police
hospital, and a number of specialty and teaching hospitals. Despite these impressive numbers
the NHSP-IP mentions that only 29% of the poor can reach a health facility within half an
hour, while 57% of the wealthiest households can.
The Strategic Plan for Human Resources in Health (see below) mentions that the public sector
bed to population ratio is 1 bed to 5,435 people, providing 59% of total beds. Together with
the 41% beds provided in the private sector (profit and not-for-profit) the bed to population
ratio is 1 bed to 2,993 people. Around half of public beds are in acute tertiary care hospitals
and longstay specialty hospitals, which have a 95% occupancy rate (OR), partly reflecting
cases that could have been treated at a lower level health facility. District hospitals have an
OR of 60% and Health Centres with beds only 10%. The OR for all public sector beds is 72%.
The OR of private sector beds is 50%. The national ALOS was 4.2 days in 2001/200210.
Like in many low-income countries government is not able to provide or guarantee the
provision of basic health services to the population, as intended. The problem is the quality of
care (equipment, drugs and supplies, as well as technical knowledge of staff) and the
availability of health workers to work in the rural and remote areas. On the demand side there
are problems such as lack of awareness, negatively influencing health seeking behaviour,
distance to the health facility, and perceived low quality of public health services. The NLSS
2003 includes questions on what kind of amenities are present in the health facility, and which
essential services are available.
10
page 391 Annual Report DHS 2001/2002
MEH/Nepal/Situational Analysis, April 2004
28
Utilisation
According to the Nepal Living Standards Survey (NLSS) 1996 40% of rural cases and 13% of
urban cases were treated at public PHC centres and HPs. When disaggregated by income
quartile it became clear that 5% of the richest quartile and only 3% of the poorest quartile
made use of public facilities. This means that the public services are mostly used by the
middle income groups, while the rich go to the private sector and the poor don’t go at all. The
PER 2003 concludes that there is a persistent inequity in the use of services by girls and
women for non-maternity care. The difference in utilisation of health services is reflected in
terms of per capita expenditure: the richest households spend 8.7% and the poorest
households only 3.2% of their household expenditure on health care. The NLSS 2003 asks
questions on why people do not visit government health facilities.
A referral system does not exist yet, but will be introduced shortly. A feasibility study has
been done, manuals have been developed and training conducted.
The consultant visited a SHP in a village (pop. 4400 over 742 households) in the hills about
25 km from Kathmandu. It was a temporary housing, since the VDC intends to build a new
one. The present SHP had two rooms (a waiting and a consultation room) with a corrugated
iron roof, was very, very simple, with faded health education posters on the wall, wooden
benches and a kerosine steriliser. A few drugs in stock in a locked cupboard. There was noone there, no staff, no patients. The village health profile was manually kept up-to-date on a
chalk board in the waiting room. The previous VDC chairman, whom I met, indicated that the
major health problems in this village are: low awareness of disease, ARI, alcohol abuse,
pregnancy related problems and injuries. Girls marry very young at 14-15 years and have 3-4
children.
Human Resources
In April 2003 the Strategic Plan for Human resources for Health – 2003-2017, prepared by
the PP&IC Division with support of GTZ, was published by the MoH. The Plan provides an
analysis of the current situation, essential policies, objectives and targets for the future
workforce, and training proposals. The total number of staff per population is low. While
there is a deficiency in the middle technical grades, the high number of unskilled and semiskilled labour (70% of the total) will need to be reduced. While expansion of training middle
level staff is needed, a surplus of medical officers is expected. Training is at present driven by
individual initiative, but will have to be more managed. Role of managers vis-à-vis the
administration remains ill-defined.
The public sector has only one medical doctor for each 18,500 inhabitants (more of them
sNPCialists than medical officers!) one nurse for 4000 people, a paramedic or health assistant
for 4500 people, a VHW for 6000 people, an MCHW for 7500 people and one hospital bed
for every 2000 people. Furthermore there are 54,000 Female Community Health Volunteers
and 15,000 TBAs. Management information on HR deployment, vacancies, staff transfer etc.
is not well developed. Human resource development will need to be professionally managed.
The MoH is presently lacking the capacity to do this.
Health workers in Nepal earn relatively well, but pay differentials between senior staff and
unskileld workers are small. An Auxiliary Health Worker, running an SHP receives Rp 6,000
per month ($82). Doctors working in a PHC centre can earn as much as Rp14,000 per month
($192). Even so it has been difficult to find providers who are willing to serve in remote
areas. The government has tried to get health workers out to remote areas by providing
MEH/Nepal/Situational Analysis, April 2004
29
monetary and training incentives. The first has not worked, but the second has: after 5 years
of service, of which one year in a very remote area or two years in a near remote area, the
Health Act guarantees the health worker full time higher education. During this time the
health worker will receive twice his regular salary. The NLSS will provide information on
what kind and how many health workers are actually present for how many hours in each
health facility.
Relevant recommendation in the Strategic HR Plan for MEH:
Expansion of staff will focus on SHPs and the related outreach clinics to strengthen the
availability of primary care services.
Devolution of health services
By the District Development Act of 1992, later replaced by Local Self Governance Act of
1999 HMG of Nepal decided to decentralise management responsibility to lower levels. The
mode of decentralisation is devolution.
The process of devolution is phased in. Central and zonal hospitals are semi-autonomous and
receive block grants, based upon number of beds and occupancy rate. District hospitals are
financed by line item and all hospitals are still directly financed by the MoH. In the future
they will be financed through the DDC by the MoF. At the moment the central MoH and the
DOHS still decide the resource allocation from the central budget for each health facility
lower than the district hospital. The basis for this allocation is catchment population,
geographical coverage and utlisation data. Resources for PHC centres and below then go from
the central level MoF directly to the District Development Committees (DDC), who passes
them on as block grants to the PHC facilities and to the VDCs. Similar arrangements exist for
grants form the Ministry of Education and the Ministry of Local Development. In the future
the DDC will be able to decide the resource allocation over the different facilities. The
District Health Officer is responsible for all publicly financed health activities in the district
including the organization and management of the district hospital, PHCs, HPs and SHPs.
Local Health Committees have been established, but they do not have a plan of action yet.
Their capacity needs to be built up. The DHO also operates the bank account and is
responsible for payment of salaries for all health workers in the district.
With a bold policy the government has decided to transfer ownership of HPs and SHPs to the
VDCs. This means complete privatisation, since property, equipment and staff are handed
over. In 2002/2003 468 HPs and SHPs in 12 districts were handed over. In 2003/2004 another
700 will be handed over in 14 districts. The time-frame to complete hand-over of all health
posts is 3-4 years (by the end of the Tenth Plan). The National Health Training Centre has
conducted 1 week training for the facilities involved, using operational and financial manuals,
supported by DFID, UNICEF, USAID/CARE International and GTZ, who have health care
strengthening initiatives in the districts to be handed over.
The Regional Health Offices officially have a supervisory task, but it seems that they are not
functioning very well, at least partly due to the impossiblity to travel due to insecurity.
Collins et al (2003) describe the implications of the insecurity for the devolution process (see
below). Local elections, scheduled for July 2002, did not take place due to the security
situation, and power was handed over to the lower level bureaucracy, rather than to elected
local government officers, as mentioned above. How this hand-over relates to the parallel
structures the Maoist have set up in many districts is not clear.
MEH/Nepal/Situational Analysis, April 2004
30
Private sector and NGOs
There is a growing and unregulated private-for-profit sector, that cannot be clearly
distinguished from the public sector, as many doctors working in the public sector have a
private practice on the side. A permission is necessary, but easily granted, in order to keep
doctors in public service. As usual private practitioners are most dense in the urban areas, but
the ongoing NLSS will shed more light on the number of private pharmacists and doctors
throughout the country.
There are 14 non-government teaching hospitals and 3 community run hospitals. As
mentioned above 41% of hospital beds are in the private and NGO sector.
237 indigenous and international NGOs reported to the District Health Office (DHO), spread
over all development regions, but 60% of them work in the Terai. In the Annual Report of the
DOHS 2001/2002 it is mentioned that 54 private health institutions reported to the DHO.
Although this is undoubtedly a minute fraction of the total, almost all of them were
concentrated in the central and western regions.
The policy of the MoH is to recognise the important contribution the private and NGO sector
make in the delivery of health care services, to better coordinate with them, avoid duplication
of efforts and to formalise partnerships by engaging into service delivery agreements. The
PRSP specifically mentions in the policy matrix for health that the private sector and NGOs
have a role in environmental and occupational health, as well as in sanitation facilities. The
NLSS also asks about NGO activities in each ward.
NGOs used to need approval for their activities, but now they only hve to register. NGO
coordination is weak, but the Council of Social Welfare has a list of NGOs.
Implications of Maoist insurgency
Also the delivery of health services has been affected by the Maoist insurgency. The MoH
informally estimates absenteeism to reach 50% and many health workers cannot carry out
their duties without harassment, intimidation and interference by both Maoist and government
forces. There are reports of destruction of SHPs, blockades of essential drugs, difficulties in
supervision and monitoring visits by regional and district health officers, disruption of the
cold chain, all of which impact negatively on the delivery of the EHCS11.
Health financing
Public Expenditure Review
A Health Economics and Financing Unit (HEFU) was established in the MoH in July 2002.
They produced a Public Expenditure Review of the health sector in July 2003 (supported by
British Council and DFID), covering the period 1999/2000 to 2001/2002.
Sources of finance
 In the FY 2001/2002 public expenditure in the health sector, including donor spending
was Rp 398 or $5.1 per capita12.
11
12
Collins et al, 2003
An exchange rate of Rp 78 to the US dollar was apparently used.
MEH/Nepal/Situational Analysis, April 2004
31




The central government contributed 50.6%, donors 39.7%, SOEs 7% and local
governments 2.5%.
All domestic resources together financed 60% of the health expenditures or Rp 239 or
$3.10 and the donors $2 per capita, together being 2.2% of GDP at the time (1.3% and
0.9% respectively).
The central government share was Rp 201 or $2.58 per capita, being 1.1% of GDP
The share of locally raised funds by DDCs and VDCs is still low, but growing.
Allocations of funds
 In 2001/2002 74% of HMG and EDP indirect funding was spent on recurrent costs,
26% on capital costs.
 Of the recurrent costs 55% was spent on salaries, i.e. 40.7% of total spending.
 Spending on care provided at district level and below made up 60% of expenditures,
zonal and regional level care 7% and tertiary level care 24%. The remaining 9% was
used for the employees medical benefits scheme
 The share of funding going to the rural areas decreased somewhat over the 3 years
 The share of funding going to Priority 1 programmes (as defined in the 10th Plan and
the MTEF) has decreased from 58% to 50% over the last 3 years, whereas the
expenditures on Priority 3 programmes increased from 33% to 40% (the targets are
71% on P-1 programmes, 28 on P-2 and only 1% on P-3 programmes under the 4.3%
GDP growth scenario)
 The expenditure share on interventions that address infectious diseases, MCH and
nutritional deficiencies (Group 1 diseases, accounting for 68% of the burden of
disease) is 60%
 Although 85% of the population live in rural areas and likely have higher health needs
than the urban population, health spending on rural areas accounts for only 51% of
total expenditures, and spending on urban areas for 32%. The remainder is spent on
national programmes that cover both urban and rural areas. The trend over the last 3
years is one of decreasing expenditures in rural areas and increasing expenditures in
urban areas
 The share of RH in total public expenditure decreased drastically from 14 to 3% due
to the closure of the population and Family Health Project, while maternal mortality
remains high
 The share of health expenditures for children under 5 (>12% of the population) was
only 4.7%, while they bear the major share of the burden of disease
The PER further revealed the following important information:
 The MoH spent 82% of the public health budget, the MoF 13% and other ministries
the rest
 EDPs changed their funding channels and increased their direct funding (not through
MoF, the so-called Red Book) to 90% in 2001/2002 (up from 56% 2 years earlier)
 DFID and JICA are the biggest donors to the health sector, together good for around
50% of all donor aid
 While the regular budget of HMG was fully used, only 27% of EDP development
budget was used in 2001/2002 (from 61% two years earlier)
MEH/Nepal/Situational Analysis, April 2004
32
Budget for 2003/2004
The official 2003/2004 public budget for the health sector is Rp 5.2 billion13. This translates
into 5.1% of the total public budget, including foreign grants and loans going through the
MoF. On a per capita basis this is Rp 215, or $2.95, being 1.2% of GDP per capita ($250). If
we assume that donor aid for the health sector through the MoF stays at 10% of total donor
grants, the true domestic central share of the public health budget will be Rp193.50 or
$2.65, being 1.06% of GDP/capita. This represents a decrease of Rp7.50 as compared with
2001/2002 expenditures and given inflation of around 8-10% per year, a real decrease of Rp
9 or 4.5% per capita, compared to expenditures of 2001/2002.
National Health Accounts
HEFU is developing a system of NHA for which they are carrying out several surveys:
 INGO/NGO survey
 Private company expenditure survey
 Private health providers survey
 Public health facility survey
 Drug expenditure survey
The first round of NHA data will be available in April 2004. Total health expenditure per
capita is preliminarily estimated at around $1514. Given that total health expenditures of HMG
and EDPs is currently around $5, the OOP expenditures are estimated to be 2/3rd of total
expenditures at $10 per capita per annum.
Taxes
While income tax is progressive and poor people are unlikely to pay income tax at all, the
main taxes that individuals pay are VAT and excise duties on tobacco and alcohol, both of
which are regressive in nature, compensated somewhat by the exemption from VAT of basic
commodities. In theory this means that public services which are financed from government
revenues are relatively more expensive for the poor than for the rich. In the case of the really
poor, it is unlikely that they consume many products that have VAT or excise duties levied on
them, so in practice they probably hardly contribute to government revenue at all.
As of the present FY, a portion of excise duty on cigarettes and alcohol will be earmarked
through the budget to support programs for preventing tobacco-related diseases. Fifty percent
of the earmarked budget will be used to support institutions engaged in the prevention of
cancer, while the remaining 50 percent will be used to assist institutions engaged in the
prevention of heart and tobacco-related diseases and also in running anti-smoking and alcohol campaigns15. The consultant was informed that this health tax is only 40 paisa (Rp
0.4) per pack of 20 cigarettes16. The consultant could not find out how much the total excise
duty per pack of cigarettes is. But since the revenue from excise duty on tobacco and alcohol
is Rp 4.8 billion, this total amount is more than the entire health budget that comes from
central domestic revenue sources for FY 2003/2004 (Rp 5.2 billion minus 10% EDP funds
going through the MoF is Rp 4.68 billion). Forty paisa per pack of cigarettes seems therefore
very low and the MoH could make a strong case for a much higher share of the excise duty.
13
Whether this is the budget for the MoH only, or also includes the allocations for other ministries is not clear
from the budget speech, but the consultant takes it to mean that it does include the allocations for all ministries .
14
Oral communication Tanka Mani Sharma
15
Budget speech
16
Oral communication Anil Mishra
MEH/Nepal/Situational Analysis, April 2004
33
User fees
Nepal introduced user fees 20-30 years ago. All public health facilities are allowed to charge
fees. The level of the fees at the HP and SHP service level is set by the Local Health
Committee. The PHC centres and hospitals charge higher fees. The facilities can retain all of
the fees and are not required to report the amount they have received. So this source of
income is not well documented. Since 2002-2003 the MoH is requesting this information
however.
As user fees are a fixed amount, they are income regressive and the poor pay relatively more
than the rich. There are exemption schemes. Hospitals for example have been instructed to
allocate 5% of the centrally provided grant and 5% of their other income to treating the poor,
marginalised and disadvantaged. Also community drug programmes have an exemption
scheme. However, the exemption schemes are said not to work properly, because there is no
incentive for providers to exempt people. Besides formal fees, health providers also charge
informal fees, although the extent to which this happens is unknown.
Insurance
Government operates a security fund for its 300.000 civil servants from which predefined
health benefits for employees are paid if and when needed. Care to be paid from the fund can
only be provided in public facilities. Government pays a maximum of 12, 18 and 21 monthly
salaries for all officers, support staff and lower staff respectively into the fund, while
employees themselves do not contribute. For the current budget year, government has
increased the fund to enable costly medical treatment when civil servants fall seriously ill. An
additional Rp 40.000 each was made available for an estimated 3000 people needing
hospitalisation and Rp 200.000 each for an estimated 200 people needing ‘special treatment’.
The management of the fund is contracted out to an insurance company, external to
government.
HEFU is looking into the possibilities to establish Social Health Insurance for salaried
employees and Community Health Insurance (CHI) for people not formally employed. HEFU
believes that SHI is at present premature, because the formal sector is too small. Instead they
want to look into the possibility to link up specific companies with hospitals, whereby the
companies would contract the hospitals to provide health services to their employees without
a third party involved. From the company survey that they did it became apparent that some
of them already have an internal scheme, whereby the company pays the health care costs of
its employees.
Community Health Insurance Schemes will shortly be introduced on a pilot basis in Morang,
Dhading, Nawalparasi, Banke, Gorkha, Lamjung, Kailali and Solukhumbu districts17. This is
easier to set up, because no legal framework is required, as is the case for SHI. The CHI
would be centered around a facility. HEFU estimates that 20-25% of the catchment area will
be poor. These people will get a card and their premium will be subsidised by the
government. They would pay a small percentage themselves. Once a year the ward officer
would have to re-estblish the poverty level of card-holders. HEFU might want to look into the
possibility to set up a re-insurance system to increase the risk pool. A CHI coordination
commission, consisting of government, donors, NGOs and ILO, has been set up. At present
the government does not have any technical assistance in setting up this CHI pilot, but would
17
Budget speech 2003/2004
MEH/Nepal/Situational Analysis, April 2004
34
like to make use of 1 local and 1 international consultant to evaluate the pilot. This could
possibly be financed through the budget for the Macroeconomics and Health planning phase.
Dr. Aviva Ron, private consultant for ILO, is working on a masterplan for social insurance,
which would incorporate formally employed and self-employed people and their dependents.
The insurance systems should be big enough to pool sufficient funds and cover both PHC and
hospital costs. As said HEFU does not think this is feasible at present.
Health Management Information System
The DoHS publishes very detailed annual reports with an overview of the health policies and
strategies, population and health facilities, sections on child and family health, disease
control, in- and outpatient care statistics, morbidity and mortality data, health education,
training programmes, availability of drugs, laboratory services, management of logistics,
administration and finance. It also includes sections on the contribution of EDPs. An effort is
being made to capture information of NGOs and private sector, but this is still scanty. Most
key data are available per district.
Health indicators and targets
As mentioned above in Annex 2 the health status per 2002 and targets for the Tenth Plan
period is given for 16 key indicators.
The main causes of mortality and morbidity cannot be found in the Annual Report. A small
leaflet published by the MoH contains top 10 morbidity figures, but it is not clear whether
these are based on hospital in- or outpatient data or on PHC data.
Based on data from 1996, the Burden of Disease Study18 showed that infectious diseases,
maternal and perinatal ailments, and nutritional deficiencies (Group 1 diseases) together
account for 50% of all deaths, 80% of deaths of children under 5, and 69% of the total burden
of disease. Degenerative and non-commnicable diseases account for 23% and injuries and
accidents for 9% of the total burden. The number of DALYs lost in Nepal is much higher than
in India or China, the neighbouring countries. The BoD is higher for females than for males,
particularly for group 1 diseases, suggesting gender bias in health seeking behaviour. Children
under 5 carry half the disease burden. Leading causes of BoD in the 0-4 age group are
perinatal diseases, acute respiratory infections, diarrhoea and measles. The leading causes of
DALYslost for women are maternal illness, tuberculosis, burns and psychiatric disorders. For
men diseases influenced by lifestyle were more important, such as ischemic heart disease,
cirrhosis, alcohol dependency and injuries and accidents. Projections for the next 10 years
show that Group 1 diseases will keep accounting for the main part of the BoD.
The study recommends to give priority to Group 1 diseases, focus on children and safe
motherhood programmes, increase the focus on tuberculosis, improve sanitary conditions,
control risk factors for non-communicable diseases (such as hypertension and diabetes),
reduce smoking and drinking, and target underserved areas.
As these data are somewhat dated, there is a clear need to compile an up-to-date overview of
morbidity and mortality and compare this to the EHCS package.
18
Nepal, operational issues and prioritization of resources in the health sector. WB, June 8, 2000
MEH/Nepal/Situational Analysis, April 2004
35
MDGs (HSS June 2002)
In February 2002 HMG of Nepal together with the UN published a Progress Report on the
MDGs. The conclusion is that it is unlikely that the MDGs will be reached, with a possible
exception for the reduction of child mortality. The targets to be reached differ in different
documents, that were all published in 2002:
Status and targets for child mortality rate (CMR) and maternal mortality rate (MMR)
Status
Target 2015
Tenth Plan
CMR
91 (2001)
74
MMR
415 (?)
315
MDG Progress Report
CMR
91 (2001)
54
MMR
539 (1996)
129 or 213
Health Sector Strategy
CMR
91 (2001)
30
MMR
539 (1996)
134
The HSS document seems to have mistakenly calculated the targets with 2001 as a baseline,
rather than 1990. The Tenth Plan seems to have taken into account that the set targets were
not realistic and has probably adapted them.





Child mortality reduced over the past decade from 162/1000 live births in 1990 to 91 per
1000 now. The MDG target is 54 per thousand (74 in the Tenth Plan). Mortality is
highest in rural areas and the mountain region in particular.
MMR is currently high at about 539 per 100000 live births. The target is 129 or 213
(dependent on which baseline data for 1990 are used) and 315 in the Tenth Plan. No info
on geographical spread.
Data on HIV is scarce but the infection rate is rising. Estimated prevalence is 0.29% but it
is much higher in at risk groups.
Malaria fatality rates have declined dramatically –from 92 per 100,000 in 1992 to 29 in
1997. However it is still a problem and adequate control programmes will have to
continue.
Tuberculosis is a major challenge. Though the rate has increased from 92 to 106 cases per
100,000 from 1995 to 1998 this is due to better reporting systems. Effective programmes
are in place but the strategy will need to reach the 15% not yet covered by the DOTs
programme.
Essential health interventions
The disease profile indicated that:
 Children under 5 account for half of the total disease burden, with the leading causes
of mortality and morbidity being perinatal conditions, ARI, DD and measles.
 The disease burden of females is higher than of males, primarily due to high maternal
mortality and morbidity.
 Infectious diseases, maternal and perinatal disorders and nutritional deficiencies will
still dominate the BoD pattern throughout the first decennium of the next millenium.
MEH/Nepal/Situational Analysis, April 2004
36
Realisation of scarce resources led to a prioritisation attempt on the basis of the 1996 Burden
of Disease study. In September 1999 the Cabinet approved a package of Essential Health
Care Services at the district level as part of its approval of the Second Long Term Health
Plan. Twenty broad areas of intervention were identified, with the bold intent to ‘redirect
resources from high-cost-low-impact interventions to those that can substantially reduce
mortality, morbidity and disability without increasing expenditures’. By 2017 these EHCS
should be available to 90% of the population within 30 minutes travel time. The list is
included in Annex 1. Specific targets were included for important indicators such as IMR,
<5MR, MMR, LE, CBR, CDR,TFR, CPR, attended deliveries and weight of newborns. These
need to be compared with the MDGs, as they use about the same timeframe.
The HSS of August 2002 acknowledges that the whole package of essential health care
services is not immediately affordable. Initially therefore the focus will be on four main areas
of essential care: safe motherhood and family planning, child health, control of communicable
diseases, and strengthened out patient care. The delivery the EHCS will mainly focus on
personal preventive and curative services. It will however be supported by a national
programme to increase knowledge about common illnesses and cost effective interventions
particularly in the four priority areas, targeting both consumers and providers in the informal
sector e.g. rural shopkeepers and pharmacists. Although the ECHS will not initially give
priority to non-communicable diseases it is essential that the BCC programme in the first five
years includes programmes aimed at reducing tobacco and alcohol abuse. HMGN will also
consider what legislative and taxation policies could be effective in this latter area.
The HSS continues to state that “The first task will be to identify and cost the resources
necessary to delivery the package across all districts. Prioritising these services at VDC/sub
heath post level will require a major transfer of resources. The staff and skills mix at that
level will need revision, regular and timely provision of drugs and equipment will be required
and service protocols and quality standards will need to be established to build confidence
and awareness. This will draw on the work already done in these priority areas by the
DOHS. The role of the district hospital in supporting the EHCS needs to be further developed,
particularly their role in providing essential obstetric care. Clear policies for financing and
providing care outside the priority programmes will have to be in place with exemption
mechanisms for the very poor”.
Phasing of scaling up is foreseen: “Fifteen districts will be targeted initially to achieve full
coverage of the essential services at all levels within three years. They will be selected to
ensure maximum coverage of the poor and vulnerable. Over years four and five extension
across a further twenty districts will be targeted”.
Partnerships form a key feature in order to deliver the services: “A key feature will be
integrating programmes in these areas being supported by EDPs. Where appropriate NGOs
and private providers will be contracted to provide the services”.
Both outcome and process/output indicators will be monitored, as well as utilisation of
and satisfaction with the services: “Indicators of progress will include the rate of increased
coverage, the MDGs, the increase in budget both real and proportionate given to the EHCS,
community perception of services available and accessed, and direct health impact”.
MEH/Nepal/Situational Analysis, April 2004
37
Conclusion
Although the EHCS package has been further prioritised, it is not clear which concrete
activities are included. The NHSP-IP has outputs, broad actions, but no detailed activities for
each output. The Tenth Plan includes prioritised programmes, but does not include the kind of
detail, that sheds light on which parts of these programmes, or which activities, belong to the
prioritisation. This obviously makes the costing very difficult.
Research
The consultant visited the National Health Research Council (NHRC), established in 1991 to
promote and facilitate medical and health research. They coordinate, collect and disseminate
information, operate a library, strengthen capacity, ethically and technically assess and
approve study proposals, and give training. Each Regional Health Directorate has a focal
point for research. They get 25 laks (1 laks =100,000 Rupees) or around $33,000 core funding
from the government and a yearly contribution of $40,000 from WHO, and have a 5-year
grant of $200,000 from Mary Knolls. A 3-year $200,000 project funded by the Rockefeller
Foundation finished in 2003.
Research in Nepal is done by the MoH, medical schools, NGOs, EDPs, but there is no special
research institute or School of Public Health. The Council made a bibliography of all medical
and health-related research done in Nepal. It shows that a number of studies relevant for
Macroeconomics and Health work seem to have been done. Unfortunately the overview does
not contain abstracts, meaning that the original studies will have to be traced to asses their
quality and relevance.
A major survey, the Nepal Living Standard (Measurement) Survey, done by the Central
Bureau of Statistics, will yield preliminary results in 2004. The consultant looked at the
questionnaires used, in particular for the rural areas, and found that the survey will produce
much relevant information, that can be used for targeting interventions to the poor.
The Chairman of the Council, Dr. Sachey Kumar Pahari, thinks research should be done into
why public policies and plans have not been implemented in Nepal.
Capacity
Technical capacity vis-à-vis essential interventions (diagnosis, treatment, counseling)
The consultant was not able to assess this.
Planning, management and monitoring capacity at different levels
The planning capacity at the central MoH is weak, but the monitoring and data collection by
the DOHS seems to be good quality and linked to policies and targets. The MDGs are
monitored by a UN Team Group together with the Government. How the administrative and
management capacity at the regional and district levels is, is not clear, but in all likelyhood
needs to be upgraded.
Financial management capacity at different levels
The capacity of the HEFU in the MoH has substantially increased due to DFID support and
capable leadership.
Supervision arrangements
MEH/Nepal/Situational Analysis, April 2004
38
Several policy documents mention the inadequacy of supervision by the regions to the district.
While this may partly reflect lack of capacity, is it at present undoubtedly also due to the
increased insecurity to travel.
Research capacity
Seems to be reasonable, but needs to be verified and specified for different areas of health
research, in particular for health systems, financial and operational research. A quick search in
Pubmed learned that there are a good number of publications in peer-reviewed international
journals that have Nepalis as first author.
Health education and promotion capacity
Still to be assessed. Important, because the often mentioned ow awareness of the population
on health and disease issues.
Absorption capacity
Due to the failing bureaucracy and constant transfers of staff, absorption capacity is less than
it could be.
MEH/Nepal/Situational Analysis, April 2004
39
Relationship poverty – ill health
Just like in the economy at large, there are great inequalities in health status of people. The
health gap between the poor and the rich remains. Health data are available by district, and
some by gender and age. The breakdown by district will give some idea of (in)equity, because
they can be linked to economic indicators for the districts. A Living Standard Measuring
Survey was done in 1996 and is presently being done again by the Central Bureau of
Statistics. This survey, the data of which will be available soon, has breakdowns by income
quintiles.
Tirtha Rana (WB Kathmandu) compiled some data on health indicators by income quintile
from different sources19: It is clear that all indicators are strongly and gradually related to
income. The greatest disparity between the poorest and richest quintile is for attended
delivery: poor women have twice as many children as rich women, but the number of them
that receive antenatal care is three times less and the number that have their deliveries
professionally attended to is 11 times less. The number of children underweight is 5 times as
high among the poorest quintile than among the richest one, while the number immunized is
half that of rich children.
Percentages of people in each income quintile for important health indicators
Poorest
20%
2.9
5.2
6.4
9.1
Attended Delivery
21.5
34.7
35.6
43.5
ANC
32.4
34.6
40.8
51.0
Immunization coverage1
2
20.1
19.6
17.6
14.1
Severe malnutrition
6.2
5.0
4.7
4.4
TFR3
15.7
21.2
23.2
26.6.
Use of modern contraceptives
Richest
20%
33.7
66.5
71.1
4.4
2.9
44.9
1
% children under 2 receiving all vaccinations
% children underweight
3
% births per 1000 women age 15-49 (this is a wrong definition – TFR is number of children the average
woman gives birth to during her lifetime -MP)
2
The Nepal HSS shows the differences in infant and child mortality rates between urban and
rural areas and between the three ecological regions. The children that live in the mountains
clearly have the highest mortality, followed by those in the terai. The hilly regions and in
those the urban areas have the lowest rates.
Infant and Child Mortality by Area of Residence
Area of Residence
Infant Mortality Rate
Urban
60.4
Rural
100.2
Mountains (North)
132.3
Hills (Middle)
85.5
Terai (jungle in the South) 104.3
Under 5 Mortality Rate
93.6
147.0
201.0
131.3
147.3
Source: Nepal Health Sector Strategy, draft June 2002
19
From Living Standard Measuring Survey, Demographic Health Survey (2001), HMIS MoH, UNDP Report
2001
MEH/Nepal/Situational Analysis, April 2004
40
In February 2002 The MoH organised a National Seminar on Health and Poverty Reduction,
sponsored by WHO/SEARO, with reference to the CMH report. Bishwambher Pyakuryal,
professor in Economics at the Tribhuvan, gave a presentation on the links between Education
& Health and Poverty & Health in Nepal. His findings:
1. There is a clear relationship between the education level of the mother and major health
indicators. When the mother’s educational level increases:
 Percentage receiving antenatal care increases
 Percentage receiving tetanus toxoid injections increases
 Percentage receiving skilled attendance at delivery increases
 Infant and child mortality rates decrease sharply
 Percentage of children fully immunized increases sharply
 Percentage of children underweight decreases
Relevant in this context is that of the 8429 respondents in the 1996 Nepal Family Health
Survey, on which the above results are based, 80% had no education, that is had never been to
school.
2. There is a clear relationship between income poverty and health indicators. When the
level of per capita consumption increases:
 Access to a health post increases (measured by time taken to reach the nearest health
post)
 Health care seeking behaviour increases (measured by consultation of in particular a
doctor)
 Percentage of fully immunised children increases
 Prevalence of chronic illness decreases
3. There is a clear relationship between poverty rate and health indicators (IMR, CMR and
% of attended deliveries) for different areas of the country:
 Comparing urban and rural areas, mortality rates are much higher and percentage of
attended deliveries much lower in rural areas, which are also poorer.
 Comparing Mountains, Hills and Terai, all three indicators are worse in the poorest
areas, being the mountains.
 Comparing regions, indicators are worse in the Mid and Far West Development
Regions, where poverty is also much higher than in the other regions.
The disparities are big indicating that great health gains can be made. Focus should be on the
Mid and Far West Development Regions, where 22% of the population live, who have the
worst health indicators of the country.
According to the information the consultant was able to collect, studies on catastrophic health
care costs have not been done yet in Nepal.
MEH/Nepal/Situational Analysis, April 2004
41
External Development Partners
According to UNDP 2001 6% of external aid is spent on health, another 6% on water and 9%
on education, 9% on rural development, while 28% is spent on energy and 19% on
transportation.
An overview of Technical Assistance by multilateral and bilateral agencies over all sectors in
the Fiscal Year 2003/2004 is available from the MoF. The table includes titles of current
projects and programmes, areas of Nepal in which the activities are being implemented, type
of technical assistance and budget. A similar overview of all INGO-supported programmes
for the Fiscal Year 2003/2004 is also available from the MoF. The health projects can be
distilled from these overviews. See bibliography.
The MoH Annual Report gives detailed overviews of support to the health sector by the main
multilateral and bilateral partners, as well as international and national NGOs, and the
achievements in a given year. Also the MoH website provides EDP information.
Multilateral and bi-lateral donors
The main multilateral agencies active in the health sector are UNICEF, WHO and UNFPA.
Main bilateral donors are JICA/DRF, DFID, GTZ/KWF, USAID and the Swiss Development
cooperation. The lack of governance, slow implementation of reforms and level of corruption
was the main reason that the WB greatly reduced it’s IDA grants to Nepal in FY 2001/2002.
For the health sector the IDA expenditure fell from 464 and 406 million Rupees in 2000 and
2001 to only 52 million Rupees in 2002. The PER gives an overview of donor expenditure in
the health sector for 1999/2000-2001/2002. The share of EDP funds going through the Red
Book of the MoF has declined over the years from 44% to only 10%. At present 90% of EDP
funds for health go directly to the Ministry of Health or are self-executed by partners.
The donors have regular meetings, chaired by the WHO Representative. As mentioned above
all support is still organised in project/programme form, in some cases by several donors
jointly. Most donors are however not (yet) in favour of pooling funds in a sector-wide
approach, although all of them now subscribe to the jointly developed Health Sector Strategy
and its Implementation Plan. Given the substantial differences between this strategy and plan
on the one hand and the Tenth Plan, to which the MoH is nationally committed, on the other
hand, it is not clear how the MoH will seek to reconcile the two paths.
International NGOs
The main INGOs active in health are United Mission to Nepal (UMN), Save the Children UK
and US, Marie Stopes Inernational (MSI), International Nepal Fellowship (INF), Netherlands
Leprosy Relief (NLR), The Asia Foundation Nepal (TAF) and the Britain Nepal Medical
Trust (BNMT).
National NGOs
The main national NGOs involved in health are the Family Planning Association of Nepal
(FPAN), Aamaa Milan Kendra (Mother’s Club), Nepal Contraceptive Retail Sales Company
(CRS), the Nepal Red Cross Society (NRCS) and the National Vitamin A programme.
MEH/Nepal/Situational Analysis, April 2004
42
The EDPs are active in the following areas:
 Safe motherhood, RH and FP (UNFPA, UNICEF, DFID, USAID, GTZ, TAF, Save
US, MSI, Aamaa, FPAN, CRS)
 Child Health (EPI, CDD, ARI, IMCI, Vit A & Iron Supplementation, salt iodisation
and deworming) (UNICEF, JICA, Save US, Nat Vit A progr)
 Priority disease programmes (TB, polio, leprosy, HIV/AIDS/STDs, malaria, kala-azar,
Japanese encephalitis) (WHO, USAID, DFID, JICA, UMN, Save US, Save UK, INF,
NLR)
 Provision of community health care or PHC (UMN, BNMT, NRCS)
 Provision of health services in conflict affected areas (DFID, Save UK, NRCS)
 Provision of hospital services (UMN, NRCS)
 Nursing (UMN)
 School and community health (JICA)
 Health education, information and communication (UNFPA,
 Physical assets and Drug management (GTZ)
 Construction, extension and rehabilitation of facilities (KfW)
 Procurement of essential drugs, equipment, contraceptives, vaccines (KfW, JICA)
 Integration of health in general development and poverty reduction programmes
(WHO)
 Human Resource Development (WHO, GTZ)
 Strengthening District Health Systems (WHO, GTZ, DFID, SDC, INF)
 Health financing (DFID)
 Tobacco control (WHO, JICA)
WHO is also involved in non-priority areas such as mental health, non-communicable
diseases, blindness, deafness, oral health, disaster preparedness, blood safety, laboratory
technology, environmental protection etc. UMN is also active in some of these areas.
The NRCS is responsible for the blood safety in Nepal and runs 51 blood transfusion centres
throughout the country. The organisation is becoming more involved in providing some
health care services, operates an ambulance service in 43 districts. They have 27 warehouses
around the country. It is further worth mentioning that the NRCS has a youth volunteer
programme, in which almost 800,000 children and young adults participate. They are
involved in First Aid, HIV/AIDS/RH information and water & sanitation programmes. Given
their huge national network, reaching into very remote areas, they could be an interesting
partner in providing the EHCS package to remote and poor populations.
Capacity building and developing/strengthening management, financial and information
systems (including disease surveillance) is part of most programmes/projects. Most donors are
involved in supporting development of policies and strategic plans, decentralisation, health
sector reform etc.
Some projects are nationwide, others focus on a number of districts. The EDPs that support
programmes in certain districts, usually support a wide range of activities, including maternal
and child health, RH, infectious diseases, iec, drug schemes etc.
With a few exceptions there was little mention of research activities. An inventory needs to be
made which studies have been done by EDPs that are relevant for the macroeconomic and
MEH/Nepal/Situational Analysis, April 2004
43
health agenda. It was agreed that this would be done as part of the Plan of Action for the first
phase of Macroeconomics and Health work.
The consultant did not receive information about mechanisms by which NGO coordination
takes place, either among themselves or with the MoH.
In how far the EDPs work with poor/remote/vulnerable populations should be assessed by
comparing their district work with economic indicators and studying their programmes in
detail. This can be done as part of the planning phase of the macroeconomic and health work.
Latest news Nepali Times 16-22 April 2004
The pre-consultative meetings of the Nepal Development Forum (NDF) have brought heightened donor concern
about Nepal’s parliamentary crisis and the conflict to the fore. Most donors have made restoration of democracy
and conflict resolution conditionalities to future aid, with some even including respect for human rights by the
security forces as a pre-requisite.
Government officials admit the crises have made it difficult to ask for more aid, but say they need to know the
level of program, sectoral and project support to plan future activities.
Some bilateral donors have placed their programs under the UN umbrella while others have started work without
associating themselves with government networks to avoid Maoist confrontation. Some donors have argued again
that service delivery should be attempted in Maoist-held areas, even if it means working with the rebels.
But by far the major disagreement between the government and donors is over making specific aid commitments.
Government officials want donors to commit before the main conference on 5-6 May. Donors have been saying
that there has to be adequate discussion on aid policy first, while the government has been insisting that they
ease their conditions.
MEH/Nepal/Situational Analysis, April 2004
44
Macroeconomics and Health
Commitment
Commitment to poverty reduction
The Government of Nepal is very committed to poverty reduction, as is evident from all
major policy and planning documents related to development. The PRSP20 mentions that a
Nepal Dalit Commission and a National Academy for the upliftment of indigenous people will
be created. A Poverty Alleviation Fund has already been created to strengthen local ownership
and coordinate special programmes by line ministries at the local level and to involve NGOs
and CBOs. The NPC has furthermore created a central monitoring unit and poverty mapping
will also be initiated.
A key question of course is whether finance follows this political commitment. For the health
sector the PER showed that some trends in expenditures over the last 3 years actually go
against the agreements or intentions (more detail under Health Financing above): The share of
funding going to the rural areas, to Priority 1 programmes and to RH have all decreased. This
shows that agreements on policies without calculating the budgetary consequences, and
especially agreeing on disinvestments to free up resources for the priority investments, is not
good enough. It also shows that it might not be politically feasible to really transfer large
amounts of resources from one programme to another. In the CMH Report this was taken into
account, when the recommendation was made that more funds were needed, to finance
additional investment for scaling up essential services for the poor, keeping the present nonessential services at the same level.
Commitment to Macroeconomics and Health
Already in June 1992 Dr. Suniti Acharya from the MoH and Dr. Bal Gopal Baidya from the
National Planning Commission attended the International Conference on Macroeconomics
and Health in countries in greatest need, held at WHO Geneva. Dr. Acharya (now WR in
Bangladesh) co-authored a chapter in the proceedings21.
Nepal also attended both recent WHO consultations on Macroeconomics and Health. Mr
Mahendra Nath Aryal, Secretary MoH, Mr Madhav Prasad Ghimire, Joint Secretary MoF and
Mr Ram Krishna Tiwari, Joint Secretary NPC attended the first consultation in June 2002,
while, according to the official participants list the following persons attended the second
consultation in October 2003:
Mr Kamal Thapa, Minister of Health, Ministry of Health, Kathmandu
Mr Bhoj Raj Ghimire, Member-Secretary, National Planning Commission, His Majesty’s Government
of Nepal, Kathmandu
Mr Bijay Raj Bhattarai, Secretary, Ministry of Health, Kathmandu
Mr Surendra Mani Tripathi, Under Secretary, Ministry of Finance, Kathmandu
Dr H.N. Acharya, Member of the Executive Board of the World Health Organization and Chief Public
Health Administrator, Ministry of Health, Kathmandu
Mr Gyan Chandra Acharya, Ambassador, Permanent Mission of Nepal to the United Nations Office and other
International Organisations at Geneva
Dr B. Datt Chataut, Director-General, Department of Health Services, Kathmandu
Nepal has submitted a thoughtful Plan of Action for the preparatory phase to WHO.
20
21
PRSP: pages 57 and 58
Acharya et al. 1993
MEH/Nepal/Situational Analysis, April 2004
45
Commitment of external development partners
The consultant gave a short presentation on the key messages and strategies of WHO’s
Macroeconomics and Health agenda during a donor meeting on 30 December 2003. The plans
for the preparatory phase were also briefly indicated. The biggest concern of the donors is
how the Macroeconomics and Health work will fit into existing strategies and plans. The
consultant stressed that the work would not duplicate any ongoing activities, but complement
them. According to GTZ there is more suspicion than representatives of donors showed
during the meeting, so this point will need continuous attention. Intense cooperation with the
EDPs during the planning phase is warranted.
Institutional arrangements
Under the National Commission on Sustainable Development, chaired by the Prime Minister,
a Sub-Commission on Macroeconomics and Health (SCMH) was formed, co-chaired by the
Ministers of Health and Finance. The following persons serve on the SCMH:








Member of National Planning Commission responsible for Health
Member of National Planning Commission responsible for Finance, Commerce and
Industry
Secretary, Ministry of Finance
Secretary, National Planning Commission
Secretary, Ministry of Health (as member secretary of the SCMH)
A woman representative from NGO having significant contribution to
macroeconomics and health ( Mrs. Meena Acharya)
Health economist ( Dr. Badri Raj Pandey )
Chief of Policy, Planning and International Cooperation Division, Ministry of Health
During its first meeting the SCMH has formed 3 people working committee consisting of one
representative each from MoH (Dr. Benu Bahadur Karki), MoF (Mr. Lal Shankar Ghimire)
and NPC (Mr. Ram Krishna Tiwari). Together with WHO this committee has identified a
number of issues to be addressed in relation to Macroeconomics and Health work and made a
Work Plan for 2003-2004, which contains actions to be taken during the preparatory phase,
but also 2-3 actions that would be part of the planning phase. The Work Plan with a budget of
$50,000 was submitted to WHO in September 2003.
The consultant met with the working committee on 29 December 2003 and some adaptations
in the Work Plan (=Plan of Action for preparatory Phase) and budget were agreed. This
adapted plan, albeit with a lower budget still, has in the mean time been accepted by WHO.
The commitment of Nepal to macroeconomics and health is threatened by the departure of Dr.
B.B. Karki22 and the frequent change in people in key positions. The WR Office is trying to
minimise this threath by constantly briefing new staff and involving them in meetings. Even
so it is likely that any process, including macroeconomics and health activities, will take
longer in Nepal due to the instability of the bureaucracy.
22
Dr. Karki, who has been the leading force on Macroeconomics and Health so far, has left the MoH and Nepal.
Most likely, his direct chef, the Chief Specialist Dr. Bishnu Pandit, will become the focal point for
Macroeconomics and Health in the MoH.
MEH/Nepal/Situational Analysis, April 2004
46
CMH calculations for Nepal
The Commission on Macroeconomics and Health calculated that scaling up a package of 49
essential interventions in 5 priority areas (see page 174 of CMH Report) to target levels at the
close-to-client (CTC) level would cost an additional $11 per person per year on average for
least-developed countries by 2007 and an additional $16 by 2015. But this is not enough,
because in order to scale up services at the CTC level, system expansion is also needed. The
CMH therefore also estimated the additional costs for requirements for the process of scaling
up. This includes improving management above the CTC level, improving absorptive
capacity, improve the quality of current services, and increase the number of staff as well as
their salaries. These costs were estimated to be another $11 and $16 per capita for the least
developed countries on average. The total additional costs would therefore be $22 per capita
for 2007 and $32 for 2015.
These costs are over and above the baseline expenditure, which was estimated to be $13 per
capita in 2002. The total health expenditure required would therefore be around $34 per
person per year by 2007 and >$40 by 2015. The CMH thinks that the least developed
countries (including Nepal) should be able to domestically mobilise around $15 per person
per year by 2007 and $20 by 2015 (around 5% of per capita income). The EDPs would have
to close the gap of $19 per capita per year in 2007 and $21 in 201523.
Efforts are underway in Nepal to estimate the total health expenditure from all sources. The
results of the first round of NHA calculations will be available in March/April 2004.
According to preliminary estimates Nepal’s total health expenditure is around $15 at present 24
Roughly 1/3rd of this amount is public expenditure, including HMG of Nepal budget and
EDP funds, and the other 2/3rd is private out of pocket expenditure. This means that total
health expenditure would have to more than double by 2007 in order to provide an essential
package to the whole population, as calculated by the CMH.
On the basis of a 4-5% growth scenario the estimated income per capita in 2007 would be
around $300 (at present $ value). If we agree that it is reasonable to expect 5% of per capita
income to go to health care costs, this would be $15 per person per year (again at present
value), that would have to be raised domestically. At present Nepal’s domestic spending is
around $13 p/c (only $3 government and $10 OOP). The EDPs spend just over $2 per capita,
If we assume that:
 Nepal indeed needs an additional $21 per person (as calculated by the CMH for the
average least developed country) per year to finance a scaled up EHCS package
 non-EHCS are not expanded
donor investment in the health sector would need to increase very substantially with $17 per
capita per person per year ($34-$15-$2=$17), being an eight-fold increase of present
investment.
The EHCS package established by HMG of Nepal (11 areas of interventions) is being costed
at the moment by a consultant of the WB (unit costs, zero-based budgeting, for limited scaling
up). The results will be available in April 2004. It is as yet not known whether upgrading of
the system, facilities, personnel etc. is included in the costing. It is further not exactly known
how much of the present domestic expenditures is actually spend on the EHCS. Part of of this
amount, especially the OOP part spent in the private sector, might be spent on non-effective
23
24
US$ 2002 (executive summary CMH report page 11 and Tables A2.4, A2.5 and A2.6 in Appendix 2)
Oral communication Mr. Tanka Mani Sharma, Chief HEFU, MoH.
MEH/Nepal/Situational Analysis, April 2004
47
interventions. Most of the EDP contribution likely does go to EHCS and related system
development costs. As the impact of scaling up EHCS within the Macroeconomics and Health
framework is expected to come in particular from reaching the poor with the EHCS, we will
also need to assess how much of present expenditures actually benefit the poor. It is also very
likely that most of the $10 OOP average per capita expenditures on health are paid by the
middle and higher income classes. The poor will be able to spend less, and will need to be
subsidised, by large-scale pooling of funds and risks between the rich and the poor, an income
related contribution system and/or through direct subsidisation of the poor by the government.
Therefore it is very likely that the part of HMG of Nepal’s share in the financing of health
care will have to be substantially increased. With how much would depend on the ability and
willingness of the poor to contribute, on the willingness of the middle-and higher income
groups to subsidise the poor through a progressive contribution system, and on the feasibility
to set up operational pre-paid schemes without the risk of adverse selection.
Opportunities for scaling up/reaching the poor
There are many achievements and developments in Nepal that forebode well on the
possibility to scale up essential health interventions and specifically reach the poor:
 Strong pro-poor policies and plans are in place as well as commitment to the
macroeconomics and health agenda.
 Nepal has a well-developed and in principle functional administrative structure, and a
good coverage of public health facilities.
 Health care workers earn relatively well (as compared with the average per capita
income and with health worder salaries in other low-income countries)
 A decentralisation/devolution process is well under way, which will mean more local
ownership and possibilities to target interventions to local needs and vulnerable
groups, if local political commitment to poverty reduction is present and health is seen
as an important issue, both in its own right and as a vehicle for development.
 Essential Health Care Services have been identified and further prioritised.
 The unit cost of some EHCS are being calculated.
 A first PER of the health sector has been made and a system of NHA is being set up,
which will further improve availability of data on financial flows, necessary to
monitor macroeconomic and health work.
 New community financing schemes will be piloted in 2004.
 Results of a new Living Standard Survey will soon be available, including information
on health facilities, personnel and health care seeking behaviour. It will be possible to
link the data to income and poverty statistics at district level. This will be a very
powerful data source for detailed planning, necessary to reach the poor with essential
services.
 The HMIS is excellent and the DoHS produces very useful data on key indicators per
district, which can also be used to monitor progress towards targets.
 Donors are willing to support Nepal and have also indicated their willingness to
increase their support.
Non-financial constraints to scaling up/reaching the poor
A considerable number of non-financial constraints are described in the documents mentioned
above under Policies, strategies and plans.
MEH/Nepal/Situational Analysis, April 2004
48
Geographical constraints exist because is Nepal is very fragmented, hampering transport and
communication. Because of this there are relatively many remote areas in this relatively small
country. And it is in those areas that most of the poor live.
Institutional constraints include a lack of planning and coordination capacity within the
Ministry of Health, lack of clarity of roles and responsibilities between the MoH and the
Directorate of Health Services, the need to strengthen intersectoral collaboration, and the need
to integrate several disease based programmes. The HMIS does not allow disaggregation of
key indicators by income or poverty status. Absorptive capacity is weak; utilisation of funds
has been lower than in other ministries, especially for the development budget.
Supply side constraints include a lack of staff in rural and remote areas, weak supervision of
service delivery, a need for quality assurance, but also for improving attitudes of staff.
Facilities need to be upgraded and supply of drugs and medical supplies ensured.
Demand side constraints include lack of awareness among the public about health and
disease and inability to pay the user fees, while exemption schemes do not work well. Supply
and demand side constraints together lead to a low utilisation of the public facilities,
especially by the poor.
Partnership constraints include the lack of mechanisms to regulate the private sector and
probably lack of coordination with international and national NGOs. A particular issue is
collaboration between HMGN and the EDPs. This has improved over recent years but there is
still considerable work to do in increasing coordination of donor resources within a national
strategy. In particular not all EDP expenditure is notified to the Government.
Political constraints include the present political instability, due to the Maoist insurgency, and
the frequent change of key staff at all levels in the MoH (and elsewhere in the public service).
The implications of the insurgency on the delivery of health services are increasing, with
reports of destruction of SHPs, blockades of essential drugs, difficulties in supervision and
monitoring visits by regional and district health officers, disruption of the cold chain etc. The
conflict makes it even more difficult te find staff willing to serve in the areas under control of
the Maoist forces. The frequent changes in the civil service lead to lack of institutional
memory and continuity in policy and planning. But also to lack of proper skills for any
particular job, because by the time an officer has acquired the knowledge for a specific job is
becoming productive, s/he is being transferred again.
While lack of good governance, corruption and slow implementation of agreed reforms were
still a reason for the WB to minimise its financial contributions to Nepal in 2002, according to
the WB CAS Progress Report made end of 2002, the government has become increasingly
more serious about reform implementation (under the Immediate Action Plan – IAP).
Financial constraints to scaling up/reaching the poor
Sources
 Nepal is the poorest country on the Eurasian continent with 38% of the population
living below the poverty line and a per capita income of just $250 per annum. People
do not have enough money to buy health services.
 HMG of Nepal has problems raising enough revenues. The government does not have
enough money to invest enough in basic services to make an impact on health status.
MEH/Nepal/Situational Analysis, April 2004
49







Even so, compared to other low-income countries, HMG of Nepal spends very little
on health: the national government spends only 193.5 million Rupees on health, being
$2.65 or 1.06% of GDP.
HMG of Nepal also spends relatively little on health as the health budget 2003/2004 is
only 1/3rd of the education budget.
The health budget has increased less than the general budget over the last years.
The domestic share of the national public health budget has decreased with 4.5% in
real terms since 2001/2002.
People pay 3-4 times more out-of-pocket for health than the government does.
Health services are mostly financed from direct taxes and user fees. As these are
regressive, the poor pay relatively more for health services than the rich and often get
less.
Pre-paid plans hardly exist.
Expenditures
Expenditures have not followed policies:
 Spending on PHC slightly decreased over the last years
 Spending on health services in the rural areas decreased in favour of urban areas
 Spending on priority-1 programmes decreased, while those on priority-3 programmes
increased
 Spending on RH drasticially decreased and those on child diseases is very low,
compared to the burden of disease
MEH/Nepal/Situational Analysis, April 2004
50
Recommendations and conclusions
1. Nepal has good pro-poor policies and plans in place and quite some work relevant to
Macroeconomics and Health is ongoing. However, some of the major constraints can only
be solved politically. The security situation in particular seems to be getting worse and
might seriously hamper necessary work, both in the planning and implementation phase.
2. It is needed that objectives and targets/indicators of NHSP-IP and those in the Tenth Plan
and in the PRSP are compared and differences discussed. It would be highly desirable that
all three sets of objectives, outputs and targets would be streamlined. It cannot be that the
MoH has to work with three pretty different plans.
3. As usual, targets in the HSS and the NHSP-IP, as well as in the Tenth Plan and the PRSP
are national averages. In the context of the development objectives it would be more
meaningful to have specific targets and indicators for the vulnerable, women, children,
rural populations and specifically for the poor. To reflect this the health management
information system would need to be adapted.
4. Rather than national solutions we might have to look for local solutions in this
fragmented, inaccessible country. This would also align well with the devolution process
that is gaining momentum. Therefore the consultant has recommended to produce District
Health and Poverty Profiles. In order to speed up work, this was included in the Plan of
Action for the preparatory phase. The NHRC has been requested to implement this
activity. These profiles will subsequently serve as a basis for adapting the existing District
health Plans into District Health and Poverty Plans during the planning phase.
5. Focus should be on interventions that address the burden of disease experienced by the
poor and on actually reaching the poor with these interventions, ensuring that health and
other systems serve them more effectively. To this end a number of options should be
studied in detail in each district as part of the district profile, such as:
 Analysis of the burden of disease among the poor, disadvantaged and marginalised
 Utilisation of public services and barriers to utilisation
 Given the big impact of clean water and sanitation services on the burden of disease of
the poor, the availability of these should be included in the district profiles
 Linking up with existing public or private organisations that are on the ground/have
network, such as the Nepal Red Cross, which has an extensive network, but also
organisations in other sectors, such as the Annapurna Conservation Area Project and
the Hills Leasehold Forestry and Forage Development Project
 Operating outreach/mobile services
 Organise transport to health facilities
 Telemedicine
 Linking up with microcredit schemes for community financing
 Linking up with user groups, such as farmers group, water user association, forestry
user group (more than 10,000 all over the country), credit group, women in
development group etc.
6. The methodology of the costing of the EHCS done by the WB recently needs to be studied
in more detail in order to ensure that all costs of system expansion and the process of
scaling up are included, also those at the higher levels. Final costing should be based on
real local costs, not literature based.
MEH/Nepal/Situational Analysis, April 2004
51
7. The PER calculated the expenditure on priority-1 programmes, probably by ministerial
budget lines for programmes and centres. But these do not necessarily coincide with the
EHCS, as these are defined by activities and the priority programmes probably also
undertake activities that would not be included in the EHCS. Moreover the EHCS have
been further prioritised since 2001/2002. There is a need to find out how the P-1
programmes relate to the EHCS and how much of present expenditure is used to finance
EHCS.
8. HMG of Nepal should consider doubling the health budget by 2007, as it spends very little
on health, both compared with other social sectors in Nepal and compared with other
LICs. The present trend in resource allocation goes against the agreed policies. Resource
allocation should improve and follow priorities.
9. Donors should also consider to substantially increase their health budget.
10. The full increase (of both HMG and donors) should be used for scaling up EHCS for the
poor.
11. Because of the regressive forms of financing of the health sector and low utilisation by the
poor, the urban and wealthier people pay relatively less and get more benefits, whereas the
poor pay more and get less benefits. People in Nepal spend 3-4 times as much OOP as
HMG spends on health. A plan to channel these OOP contributions into pre-paid plans
should be developed. The handing over of HPs and SHPs to VDCs offer opportunities for
CHI to be introduced. The MoH is planning a few pilot projects. The evaluation of the
CHI pilots could be included in the Macroeconomics and Health planning phase proposal.
12. Research should be focused on generating answers to questions and options that will
facilate pro-poor strategic planning.
MEH/Nepal/Situational Analysis, April 2004
52
Annexes
MEH/Nepal/Situational Analysis, April 2004
53
Annex 1
Policies and Plans
1. NATIONAL HEALTH POLICY 1991
The National Health Policy was adopted in 1991 (FY 2048 BS) to bring about improvement in the health conditions
of the people of Nepal. The primary objective of the National Health Policy is to extend the primary health care
system to the rural population so that they benefit from modern medical facilities and trained health care
providers. The National Health Policy addresses the following areas:
1. Preventive Health Services
Priority is given to programmes that directly help reduce infant and child mortality rates. Services are to be
provided in an integrated manner throughout the health system to sub health posts at the local level.
2. Promotive Health Services
The programmes that enable people to live healthy lives will be given priority.
3. Curative Health Services
Curative health services will be made available at all health institutions-central, regional, zonal and district
hospitals; primary health care centres (PHCC), health posts (HP), and sub health posts (SHP); and, at health
institutions at all levels of the healthcare system. Hospital expansion will be based on population density and
patient loads. Mobile teams will be organised to provide specialist services to remote areas. A referral system will
be developed to direct the rural population to well-equipped institutions.
4. Basic Primary Health Services
Sub Health Posts will be established in phased manner in all Village Development Committees (VDC). One Health
Post in 205 electoral constituencies will be upgraded in a gradual manner and converted to a Primary Health Care
Centre.
5. Ayurvedic and other Traditional Health Services
The ayurvedic system will be developed and other traditional health systems (such as Unani, homeopathy, and
naturopathy) will be encouraged.
6. Organisation and Management
Improvements will be made in the organisation and management of health facilities at the central, regional and
district levels. This will include the integration of the district hospitals and the public health offices into District
Health Offices.
7. Community Participation in Health Services
Community participation will be sought at all levels of healthcare through the participation of female community
health volunteers (FCHV), traditional birth attendants (TBA) and leaders of various local social organisations. VDCs
will provide sites for the location of SHPs.
8. Human Resources for Health Development (HRH)
Technically competent human resources will be developed for all health facilities. Training centres and academic
institutions will be strengthened.
9. Resource Mobilisation in Health Services
National and international resources will be mobilised and alternative concepts (such as health insurance, user
charges, and revolving drug schemes) will be explored.
10. Private, Non-Governmental Health Services and Inter-sectoral Co-ordination
The Ministry of Health will co-ordinate activities with the private sector, non-governmental organisations (NGOs),
and non-health sectors of HMG. The private sector and NGOs will be encouraged to provide health services.
11. Decentralisation and Regionalisation
Decentralisation and regionalisation will be strengthened; peripheral units will be made more autonomous. District
Health Offices (DHO) will have a prominent role in the planning and management of curative and promotive health
services from district to village levels.
12. Blood Transfusion Services
The Nepal Red Cross Society will be authorised to conduct all programmes related to blood transfusion. The
practice of buying, selling, and depositing blood will be prohibited.
13. Drug Supply
Improvements will be made in the supplies of drugs by increasing domestic production and upgrading the quality
of essential drugs through effective implementation of the National Drug Policy.
14. Health Research
Health research will be encouraged for better management of health services.
MEH/Nepal/Situational Analysis, April 2004
54
2. SECOND LONG TERM HEALTH PLAN, 1997-2017

The Ministry of Health of His Majesty's Government of Nepal developed a 20-year Second Long-Term
Health Plan (SLTHP) for FY 2054-74 (1997-2017). The aim of the SLTHP is to guide health sector
development in the improvement of the health of the population, particularly those whose health needs
are not often met.

The SLTHP addresses disparities in healthcare, assuring gender sensitivity and equitable community
access to quality healthcare services. The aims of the SLTHP are to provide a guiding framework to build
successive periodic and annual health plans that improve the health status of the population; to develop
appropriate strategies, programmes, and action plans that reflect national health priorities that are
affordable and consistent with available resources; and to establish co-ordination among public, private
and NGO sectors and development partners.

The SLTHP vision is a healthcare system with equitable access and quality services in both rural and urban
areas. The system would encompass the concepts of sustainability, full community participation,
decentralisation, gender sensitivity, effective and efficient management, and private and NGO
participation.
2.1 OBJECTIVES

The objectives of the SLTHP are as follows:

To improve the health status of the population of the most vulnerable groups, particularly those whose
health needs often are not met-women and children, the rural population, the poor, the underprivileged,
and the marginalized population.

To extend to all districts cost-effective public health measures and essential curative services for the
appropriate treatment of common diseases and injuries.

To provide the appropriate numbers, distribution and types of technically competent and socially
responsible health personnel for quality healthcare throughout the country, particularly in under-served
areas.

To improve the management and organisation of the public health sector and to increase the efficiency
and effectiveness of the healthcare system.

To develop appropriate roles for NGOs, and the public and private sectors in providing and financing
health services.

To improve inter-and intra-sectoral co-ordination and to provide the necessary conditions and support for
effective decentralisation with full community participation.
2.2 TARGETS

The targets of the SLTHP are as follows:

To reduce the infant mortality rate to 34.4 per thousand live births;

To reduce the under-five mortality rate to 62.5 per thousand;

To reduce the total fertility rate to 3.05;

To increase life expectancy to 68.7 years;

To reduce the crude birth rate to 26.6 per thousand;

To reduce the crude death rate to 6 per thousand;

To reduce the maternal mortality rate to 250 per hundred thousand births;

To increase the contraceptive prevalence rate to 58.2 percent;

To increase the percentage of deliveries attended by trained personnel to 95%;
MEH/Nepal/Situational Analysis, April 2004
55

To increase the percentage of pregnant women attending a minimum of four antenatal visits to 80%;

To reduce the percentage of iron-deficiency anaemia among pregnant women to 15%;

To increase the percentage of women of child-bearing age (15-44) who receive tetanus toxoid (TT2) to
90%;

To decrease the percentage of newborns weighing less than 2500 grams to 12%;

To have essential healthcare services (EHCS) in the districts available to 90% of the population living
within 30 minutes' travel time of facilities;

To have essential drugs available at 100% of facilities;

To equip 100% of facilities with full staff to deliver essential health care services; and

To increase total health expenditures to 10% of total government expenditures.
3. STRATEGIC ANALYSIS
In October-November 1999 the Ministry of Health, in collaboration with external development partners (EDP),
conducted a strategic analysis of the health sector with a view to developing an effective planning approach. The
aim of the strategic analysis was to initiate a process for analytical decision-making in planning. During the analysis
it became apparent that despite policy commitment, equity in access to healthcare remained elusive. Of further
concern was that compared with investments achievements were lower than expected. The following issues were
identified: weak management of public sector health facilities and institutions; inadequate compliance with existing
guidelines and quality of care protocols; lack of clear roles and responsibilities for health authorities (central and
district level) regarding decentralisation; the absence of an effective system to ensure quality and fair pricing of
private sector services; and the lack of policies for human resource development and management.
The outcome of the strategic analysis was the Medium Term Strategic Plan (MTSP), which was formulated to
provide operational support for the SLTHP. More specifically, the MTSP provides a strategic framework for
developing the Tenth Five Year Health Plan (2002-2007).
MEH/Nepal/Situational Analysis, April 2004
56
4. MEDIUM TERM STRATEGIC PLAN (MTSP)
Aims
To develop an effective health
system for the provision of
affordable and accessible
Essential Health Care Services
(EHCS)
To promote a public-privateNGO partnership for the
provision of healthcare
To decentralise the health
system and ensure
participatory approaches at all
levels
Outputs

Delivery of prioritised Essential Health Care Services (EHCS) elements
according to National Standard Guidelines

Provision of services beyond EHCS, ensuring a safety net for poor and
vulnerable groups

Improved access to and utilisation of health services by the vulnerable
population (poor, disadvantaged, women and children)

Defined and strengthened roles of public-private-NGO providers in the
provision of health services

A regulatory framework for the private sector

An effective partnership management system

Developed and implemented financial mechanisms for public-private-NGO
involvement

Enhanced participatory planning and management capabilities at all levels
in the spirit of devolution ensuring gender balance

Functional health management committees (HMCs) at all levels including
the central level

To improve the quality of
health care provided through
the public/private/NGO
partnership by total quality
management (TQM) of
human, financial, and physical
resources.
Defined and operational roles and responsibilities for all stakeholders

Mobilised communities with lifestyles developed to increase service
utilisation and to see the practice these lifestyles at home

An adequate and appropriate mix of HRH developed and deployed at all
levels and systems

Quality assurance mechanisms in place in public/private/NGO sectors for
provision of quality services

Assurance of availability and proper utilisation of financial resources

Availability and use of adequate and reliable information for management
decision making

Development and implementation of a national healthcare technology
strategy

Supplies of drugs and medical consumables of approved quality available
throughout the year
MEH/Nepal/Situational Analysis, April 2004
57
5. DELIVERY OF ESSENTIAL HEALTH CARE SERVICES
The Second Long Term Health Plan indicated that priority be given to health promotion and prevention activities
based on Primary Health Care principles. It identified Essential Health Care Services (EHCS) that address the most
essential health needs of the population and that are highly cost-effective. EHCS are priority public health
measures and are essential clinical and curative services for the appropriate treatment of common diseases. The
EHCS for Ayurveda and other traditional systems of medicines are defined separately.
Essential Care Services for the Modern System of Medicine
*
Main Interventions*
Health Problems Addressed
Appropriate treatment of common
diseases and injuries
Common Diseases and injuries
Reproductive health
Maternal and Peri-natal
The expanded programme on
immunisation (EPI) and Hepatitis B
Vaccine
Diphtheria, Pertusis, TB, Measles, Polio, Neonatal Tetanus, Hepatitis B
Condom promotion and distribution
STD/HIV, Hepatitis B, Cervical Cancer
Leprosy control
Leprosy
Tuberculosis control
Tuberculosis
Integrated Management of
Childhood Illness (IMCI)
Diarrhoeal Disease, Acute Respiratory Infection (ARI), Protein Energy
Malnutrition (PEM)
Nutritional supplementation,
enrichment, nutrition education and
rehabilitation
PEM, Iodine Deficiency Disorders, Vitamin A Deficiency, Anaemia,
Cardiovascular Disease Prevention, Diabetes, Rickets, Perinantal
Mortality, Maternal Morbidity, Diarrhoeal Disease, ARI
Prevention and control of blindness
Cataracts, Glaucoma, Pterygium, Refractive Error, and other Preventable
Eye Infections
Environmental sanitation
Diarrhoeal Disease, Acute Respiratory Infection, Intestinal Helminthes,
Vector Borne Diseases, Malnutrition
School health services
Diarrhoeal Disease, Helminthes, Oral Health, HIV, STDs, Malaria, Eye and
Hearing Problems, Substance Abuse, Basic Trauma Care
Vector borne disease control
Malaria, Leishmaniasis, Japanese Encephalitis
Oral health services
Oral Health
Prevention of deafness
Hearing Problems
Substance abuse, including tobacco
and alcohol control
Cancers, Chronic Respiratory Disease, Traffic Accidents
Mental health services
Mental Health Problems
Accident prevention and
rehabilitation
Post Trauma Disabilities
Community-based rehabilitation
Leprosy, Congenital Disabilities, Post Trauma Disabilities, Blindness
Occupational health
Chronic Respiratory Disease, Accident, Cancers, Eye and Skin Diseases,
Hearing Loss
Emergency preparedness and
management
Natural and Man-made disasters.
Main Interventions are listed in priority order
MEH/Nepal/Situational Analysis, April 2004
58
Annex 2
Tenth Plan Chapter 24 – Health
MEH/Nepal/Situational Analysis, April 2004
59
Annex 3
– 2007)
Nepal Health Sector Programme – Implementation Plan (2003
Output 1: Prioritised EHCS
1.
costing of and resources allocation for EHCS
2.
redefine institutional arrangements for delivering EHCS
3.
develop systems for priority access for poor and vulnerable groups
4.
strengthen outpatient services
5.
additional behaviour change and communication (BCC) activities
Output 2: Decentralised health management
1.
introduce local management of sub-health posts
2.
create hospital autonomy and initiate resource mobilisation
Output 3: Private and NGO sector developed
1.
formally establish committees and workgroups for specific programme areas to coordinate the work
of government, donor and I/NGO groups
2.
establish district level health co-coordinating committees
3.
update inventory of existing private/NGO/public involved in health sector, by district
4.
define an appropriate public/private/NGO mix for each district
5.
set quality standards and regulatroy emchanisms for private and NGO delivery
Output 4: Sector management
1.
strengthen joint MoH/donor annual planning, programming, budgeting and monitoring cycle
2.
strengthen ongoing MoH/donor programmatic collaboration
3.
strengthen sector management at the central level
4.
strengthen regional and district management
5.
capacity building at central and district levels
6.
systematic assessment of institutional and organisational arrangements
7.
redefinition of roles throughout the health system
Output 5: Financing and resource allocation
1.
identification of health sector priorities and reallocation of resources to priorities services
2.
alternative financing arrangements, such as community health insurance, explored
3.
MoH to develop national guidelines for user fee practices and other payments in public facilities
4.
drug financing mechanisms strengthened to support increased and equitable availability of essential
drugs
Output 6: management of physical assets
1.
product selection and quality improved
2.
commodity distribution improved
3.
drug financing mechanisms strengthened
4.
national drug policy better implemented
5.
logistics management information sytsem (LMIS) strengthened
6.
disaster relief commodities management strengthened
7.
quality and safety policies and systems to be established
Output 7: Human resource development
1.
the MoH will reform its HRD unit and locate it in an appropriate place
2.
the MoH will improve its personnel management
3.
in-service training coordination and quality will be improved
4.
new training for identified needs
5.
better coordination between the MoE, MoH and CTEVT for pre-service education
Output 8: Integrated MIS and QA policy
1.
develop and establish integrated MIS
2.
establish and implement QA Policy
MEH/Nepal/Situational Analysis, April 2004
60
Annex 4
Health and Financing paragraphs in the PRSP
Health paragraphs in the PRSP (page 54/55)
145 The health sector is of critical importance for human development, improving living
standards in rural areas and for mainstreaming marginalized groups and communities. Despite
significant progress in recent years, service delivery in the health sector remains weak.
Although an extensive network of primary healthcare centers has been constructed nationwide,
it has not been functioning well in many rural areas due to lack of trained staff, drugs
and medicines, etc. The sector's overall performance has suffered due to inadequate funding
for essential recurrent expenditures, misallocation of resources and limited capacity for
supervision and, for co-ordination of the activities of other agencies providing health care
services.
146 To address the health sector needs, the government formulated a Health Sector Strategy in
August 2002, which provides a coherent strategic framework to involve all the stakeholders.
The key sector objectives are: (i) Extending essential health care services to all, with special
emphasis on the poorer population living in rural areas; (ii) Management of the growing
population by enhancing the accessibility of rural population to family planning services and
expanding maternal and child health services; and (iii) Ensuring effective control of
communicable diseases, such as Malaria, and Tuberculosis, as well as HIV/AIDS.
147 The Tenth Plan has adopted a number of strategies to achieve these objectives: (i)
Expansion of primary health centers and district hospitals, and strengthening out-patient
services in hospitals; (ii) Development and retention of trained health personnel in rural areas;
(iii) Increased supply of essential drugs and vaccines; (iv) Improved delivery of health
services, publicly, through decentralized management/delivery, through increased
participation of the private sector, INGOs and NGOs, or through public -private partnerships;
(v) Improved regulatory mechanisms to ensure the quality and accessibility of health services;
and (vi) improving human resource development and management and health care financing.
148 The major policies and programs to implement these strategies include, among others, the
following: As noted, primary health centers and outpatient facilities in hospitals will be
expanded. In order to mainstream the marginalized groups and regions, efforts will be made
to ensure access to a facility within one hour's walk to all, and to initiate special programs in
the Mid and Far Western regions. Given the inadequate staffing and quality of health facilities
in rural areas, the government will make recruitment and transfer process of health workers
transparent; and adopt an incentive mechanism to encourage them to work in remote areas.
The policy of transferring the management of sub-health posts and health posts to local
communities will be further intensified; and recruitment of health workers and procurement of
drugs will be done at the local level. The community drug program and human resources
development program to produce trained health manpower will be further expanded. Focus
programs particularly for immunization, safer motherhood and control and prevention of
communicable diseases such as HIV/AIDS, as well as a Health Insurance Scheme will be
initiated. Family planning and nutrition programs will be expanded and made more effective.
MOH is also developing an annual work plan within the framework of the MTEF and the
Tenth Plan that would help implement these key reform actions identified in the Health Sector
Strategy as a part of a sector-wide approach to improve performance. It is expected that with
effective implementation of these policies and programs, the existing infant mortality rate will
come down to 45 and life expectancy will increase to 65 years from the current 61.9 years.
All sub-health posts, some of the health posts, and some hospitals will be managed by local
bodies/communities by the end of the Plan.
149 The new implementation modalities in the education and health sectors should be seen as
a logical extension of the decentralization process. Indeed, they represent the
operationalization of the commitment the government made two years ago to transfer
increased functions and responsibilities to local governments and communities, starting with
education, health, rural roads and agricultural extension services. While the management of
MEH/Nepal/Situational Analysis, April 2004
61
primary schools and primary health centers in specified areas are being transferred to
community management committees, funding for them will be channelled through local
governments—DDCs and VDCs. The community management committees will be
answerable to, and be monitored by the DDCs/VDCs for ensuring effective use of and
accountability for resources, while technical support for the management committees will be
provided by the district offices of the line departments, since the DDCs and VDCs do not
have sufficient capacity in this regard at present. Moreover, in both education and health, the
pace of transferring management to the communities will be gradual, taking into account the
management capacity and readiness of communities to take on such responsibilities, the
degree of availability of support through NGOs and CBOs, and implementation constraints
created by the domestic disorder. As conditions improve, particularly as peace and a degree of
normalcy return to the affected areas, it would be possible and necessary to develop new
implementation modalities involving local groups, NGOs and CBOs in order expand the
community management approach to those areas also.
Finance paragraphs in the PRSP (page 64-66 en 72/73)
177 Accordingly, the rest of this section briefly reviews the Tenth Plan's strategy with regard
to its financing. It starts with the "normal case"—what the government would like to do, if
resources are available. Even here though, the program for the first year has been sharply
reduced, (reflecting the present resource constraints), but picks up quickly thereafter.
Recognizing that the resolution of the present fiscal and socio-political constraints may take
more time and the Plan's targets and expenditure programs may have to be scaled down for a
longer period, a “lower case” scenario, (which is really a base case) is then presented. The
lower case scenario is indeed the operational basis at present, and will be adjusted every year
through the MTEF as resource availabities and development needs change, (for example as
may be required with the progress of the peace negotiation process). And, as and when
resource availabilities improve, the Government will try to move up to the normal case
scenario to the extent possible. The remainder of this section will discuss how future
expenditure adjustments will be made in practice, (through the MTEF, expenditure
prioritization etc); as well as the actual adjustments that have been made so far in this year's
budget to firmly anchor the Tenth Plan to resource availability and to protect its poverty
reduction priorities through the MTEF. A third "low case" scenario is not separately
discussed, because these built-in mechanisms will help reduce the Plan expenditures further in
a systematic way, if needed.
Macro-economic Framework
178 The macro-economic framework of the Tenth Plan has been set taking into account the
economic growth target, the financial resources required to meet that target, and the
incremental capital output ratio estimated at 4.3:1. Given the fact that resource availability,
implementation capacity and Plan outcome will be heavily influenced by the law and order
situation in the country, the macro economic framework has been designed on the basis of
two scenarios for targeted economic growth. The first—Normal Case—assumes that
restoration of peace within the first year of the Plan would provide room for a GDP growth of
6.2 percent per annum. The investment requirement to attain this growth, given the
incremental capital-output ratio, would be about Rs. 610 billion for the entire Plan period. As
private sector is expected to contribute about 72 percent of this investment, the required
government investment for attaining the growth target would be Rs. 170 billion for the Plan
period. The corresponding development outlay by the Government would be Rs. 234 billion.
The annual decomposition of this development outlay is in line with the MTEF, which was
formulated in FY 2003. Starting from Rs. 32.5 billion in the first year of the Plan,
development expenditure would reach Rs. 51.5 billion in the third year of the Plan.
179 In case the restoration of sustainable peace takes a longer time, the 'normal' economic
growth would be difficult to attain. A risky investment climate for the private sector, resource
constraints in the public sector and constrained Plan implementation capacity would hamper
the growth potential. Accordingly, economic growth in the constrained environment is
expected to be confined to only 4.3 percent per annum under this alternative 'low case'
scenario. The investment required to attain the lower growth target would be Rs. 457 billion.
Of this, the investment to be made by the government would be Rs. 129 billion; and the
MEH/Nepal/Situational Analysis, April 2004
62
corresponding development expenditure level would be Rs. 178 billion for the five year Plan
period. Accordingly, from Rs. 29 billion in the first year, the development expenditure will
rise to Rs. 40.5 billion in the third year of the Plan.
180 The key assumptions underlying these two scenarios are discussed in some detail below.
However, it is worth noting that maintaining a sustainable macroeconomic framework and
ensuring macroeconomic stability are built in as key imperatives under both scenarios. The
major differences between the two scenarios are with regard to the scope for mobilization of
government revenue and domestic/national savings, (both of which will be closely related to
the levels of economic activity/growth), and the feasible levels of external assistance inflows.
Under both scenarios, prudent monetary, fiscal and exchange rate policies designed to keep
domestic inflation at around 4.5% p.a. and foreign exchange reserves at comfortable levels
(nine months' imports equivalent) will be pursued; and the overall fiscal deficit (after grants)
is expected to remain at a sustainable level of about 5 percent of GDP throughout the Plan
period. Much of this deficit would be financed by concessional external loans; and domestic
borrowing will average only about 2.0 percent of GDP per annum over the Plan period. Such
a fiscal deficit would not pose any serious threat to price and balance of payments stability of
the country. Financing this defic it through the planned level of domestic borrowing also will
not lead to a substantial rise in the debt burden of the government. Debt servicing will remain
within affordable limits.
The Normal Case
181 The Normal Case Scenario is based on a number of critical assumptions: (i) The security
situation will improve beginning in the second half of 2002/03, helping to bring about a
modest revival in tourism and domestic economic activities. (ii) The agriculture sector is
expected to grow at a modest rate. These will help the economy to achieve a 3.3% growth rate
in 2002/03. (iii) Global economic conditions will also improve in 2003/04, helping to achieve
faster GDP growth from then on—-6.1% in 2003/04, rising to 7.5% in 2006/07. (iv) Lower
revenue growth will initia lly constrain development spending in 2002/03 to only about Rs.
32.5 billion; but will recover strongly after that. (The revenue/GDP ratio will rise from 12.0%
in FY 2002 to 14.0% in FY 2007). (v) Savings and investment rates, after a slow start in
2002/03, are expected to grow by 11% and 9% per annum respectively during the Plan period.
(National savings will rise from 17.4% of GDP in FY 2002 to 23.1% in FY 2007). (vi)
Prioritization of projects and improved monitoring will increase the effectiveness of public
expenditure and bring positive results; and (vii) Accelerated reforms will help attract more
foreign assistance and raise growth rates further, especially during the last 2 years of the Plan
period.
The Alternative Case
189 Recognizing that some of these risks outlined above may indeed materialize and constrain
resource availability and the potential for economic recovery and growth, the Tenth Plan
incorporates an alternative lower case scenario to indicate how the government will deal with
such a situation (Table 15). The key assumptions of the lower case scenario include the
following: (i) The security situation will improve late in (beginning in the last quarter of)
2002/03; (ii) The recovery in the domestic economy will be slower and take longer, with a
slower rate of growth in exports and remittances reflecting slower recovery of the
international economy also. (iii) Revenue growth will be slow, reflecting the continuing
weakness in the economy. The revenue/GDP ratio, after an initial decline (from 12.0% in
2001/02) to 11.8% in 2002/03, will rise slowly to 13.0% by 2006/07, averaging only 12.4%
p.a. for the Tenth Plan period. (iv) Current expenditures will decline marginally from 11.7%
in 2001/02 and 12.6% in 2002/03 (reflecting the need to sustain some security-related
expenditure) to 11.1% of GDP by 2006/07, and average 11.9% p.a. of the Tenth Plan period.
(v) Gross aid inflows will increase only modestly (from 4.7% of GDP in 2001/02 to 5.7% in
2006/07); (vi) but, the government will continue to limit domestic borrowing to limit the debt
burden; and such borrowing will fall steadily from 3.2% of GDP in 2002/03 to only 0.8% in
2006/07. (vii) The cumulative effects of these assumptions are that resource availability for
financing development spending by the government will remain very tight. For example, in
2002/03 development spending is assumed to be only Rs. 29 billion (equivalent to 6.5% of
GDP) compared to a budget target of Rs. 38.3 billion and actual spending ratio of 7.6% in
2001/02. Moreover, development expenditure/GDP ratio will rise only gradually to 8.4% by
MEH/Nepal/Situational Analysis, April 2004
63
2006/07, averaging 7.6% of GDP p.a. over the Plan period. (viii) Under this scenario
domestic/ national savings and overall investment levels in the economy will decline below
the 2001/02 levels, refle cting a sharp decline in these variables during the current year
(2002/03), followed by a very modest recovery in the next few years. Thus, national savings
are expected to reach only 16.1% of GDP by 2006/07, and total investment in the economy
only 21.8% by 2006/07 (Table 15). Therefore, to attain a growth rate of 4.3% p.a. over the
Plan period, a significant improvement in the efficiency of the use of resources will be
required. This is of course what the Tenth Plan strategy tries to do by prioritizing
expenditures, focusing on quick returns and results in terms of output and service delivery and
improving accountability and monitoring.
190 Given these assumptions, the economy’s performance in terms of GDP growth, social and
infrastructure development and poverty reduction will be significantly lower under the Lower
Case than under the Normal Case (Table 12, last column). For example, GDP growth will be
only about 2.0% in 2002/03, and rise slowly thereafter to 4.0% and 4.5% in the next two
years, though picking up thereafter to 6.0 % by 2006/07. For the Tenth Plan period as a
whole, GDP growth will average 4.3% p.a., permitting per-capita income growth of about 2.0
% per annum. This is still better than the GDP and per capita income growth rates of 3.6%
and 1.3% respectively achieved during the Ninth Plan, but not good enough from a
macroeconomic perspective to achieve significant progress in poverty reduction. Not
surprisingly, development programs, activities and results in virtually every area would be
constrained.
Medium Term Expenditure Framework (MTEF)
191 Recognizing the fiscal deterioration and the need to revise the Tenth Plan accordingly, the
Government initiated the preparation in parallel of a Medium Term Expenditure
Framework (MTEF) in late 2001. The key objective of the MTEF was to begin to implement
the Tenth Plan from the beginning of the fiscal year 2002/03, without waiting for the formal
finalization of the Plan. Accordingly, the key projects/programs and activities that are
considered essential for achieving the Tenth Plan's poverty reduction goals and their resource
requirements for the next three years were to be identified, and were to be given priority in
terms of budget allocations in the 2002/03 budget. Additional considerations guiding the
MTEF, in view of the fragility of the fiscal situation, were: (i) How to streamline the budget
which was already overextended well beyond resource availability, with over 600 ongoing
activities/budget lines? (ii) How to protect the Tenth Plan's key priorities in the event of
further shortfalls in resource availability? and (iii) How to ensure that the resources allocated
and released for priority activities would be effectively utilized? The MTEF was expected to
be the principal instrument for operationalizing the Tenth Plan, by prioritizing the proposed
Plan activities according to the changing resource situation, and firmly linking the annual
budget process and the Plan.
192 Thus, a three year MTEF was prepared in early 2002 by virtually the same line ministry
teams responsible for Tenth Plan preparation, using similar methodology for ranking and
prioritizing activities, (but with a sharper focus on implementability, short term financing
needs and results). On the basis of the MTEF, (i) the 2002/03 development budget was
initially set at a significantly lower level—Rs. 38 billion, compared to Rs. 50 billion in the
2001/02 budget; and the number of budget lines were reduced from over 600 to 430. (ii) Even
more importantly, all activities were classified into three groups according to their priority (P1
being the highest priority and P3 being the lowest); and (iii) The principle was established that
the priority classification would be strictly followed in releasing funds for development
activities. Thus, P1s will receive first priority in budget releases; and P2 and P3 will get funded
only if funds are still available after providing for P1s. This has established clear criteria and
methodology for adjusting resource allocations on the basis of Tenth Plan's priorities, in line
with changes in the resource situation. (iv) Finally, resource allocation was linked to
expenditure reporting and performance, in order to ensure satisfactory results. Thus, under the
new system that has been evolved, activities which do not provide statements of expenditures
(SOEs) for the preceding trimester will not be given additional funds, until they provide the
SOE's. (Section VII discusses these in more detail).
MEH/Nepal/Situational Analysis, April 2004
64
From Table 18 page 85
Key indicators/actions for Health
MEH/Nepal/Situational Analysis, April 2004
level of
analysis
frequency
Source
of data collection
responsible
agency
65
PRSP: Policy Matrix for Health
MEH/Nepal/Situational Analysis, April 2004
66
Annex 5
People met in Nepal during mission 16/12/03 – 06/01/04
1.
Dr. Klaus Wagner, WHO Representative Nepal
2.
Dr. Lin Aung, Health Planner, WHO Nepal
3.
Dr. Bhakta Raj Dahal. National Operation Officer WHO.
4.
Dr. Benu Bahadur Karki, Chief Policy, Planning & International Cooperation, MoH
(core member Subcommittee Macroeconomics and Health)
5.
Dr. Dr. Bishnu Prasad Pandit, Chief Specialist, MoH
6.
Dr. Rita Thapa, Senior Public Health Policy Adviser, MoH
7.
Mr. Tanka Mani Sharma, Under Secretary Finance, Chief Health Economics & Financing Unit (HEFU)
MoH
8.
Mr. Ram Krishna Tiwari, Joint Secretary National Planning Commission
(core member Subcommittee Macroeconomics and Health)
9.
Mr. Lal Shankar Ghimire, Under Secretary Foreign Aid Coordination Division, MoF
(core member Subcommittee Macroeconomics and Health)
10. Dr. Umesh Prasad Dhakal, Director Health Service Department, Nepal Red Cross Society
11. Mr. Ramesh Kumar Sharma, Chairman Nepal Red Cross Society
12. Mr. Badri Khanal, Executive Director, Nepal Red Cross Society
13. Dr. Sachey Kumar Pahari, Executive Chairman Nepal Medical College/Teaching Hospital, Chairman
Nepal Health Research Council
14. Dr. Anil K. Mishra, Member Secretary Nepal Health Research Council
15. Mrs. Chetna Thapa, publication officer Nepal Health Research Council
16. Dr. Tirtha Rana, Senior Health Specialist, WB Nepal
17. Dr. Aviva Ron, Consultant Health Policy (Masterplan Social Health Insurance Nepal -ILO)
18. Dr. Angelika Schrettenbrunner, Programme Manager Health Sector Support Programme GTZ
19. Ramji Dhakal, GTZ
20. Sheila Lutjens, Director Office of Health and Family Planning, USAID
21. Dr. Hernando Agudelo, Deputy Representative UNFPA
22. Mr. Harka Bahadur Thapa, Project Manager Rural Health Development Project, SDC
23. Mrs. Susan Clapham, Health Advisor DFID.
MEH/Nepal/Situational Analysis, April 2004
67
Annex 6
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