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Health spending in Bangladesh increased 16-fold in last 25 years but public investment lags behind

Health spending in Bangladesh increased 16-fold in last 25 years but public investment lags behind

Representational Image. Photo: Pixabay

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Total health expenditure in Bangladesh surged from Tk4,680 crore in 1997 to Tk77,720 crore in 2020 - representing a remarkable 16.61-fold increase, but public spending on health grew by a moderate 10.63 times during the same period

Mohammad Jahidul Islam

Publisted at 12:27 PM, Tue Jul 2nd, 2024

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Health expenditure in Bangladesh increased substantially over the last quarter-century - marked by a significant shift in financial burden towards households, a consequence of budget constraints within the public sector and perceived neglect of the healthcare sector, states a report by the World Bank.

The “Path to Transform Bangladesh's Health System for Better Results” report by the global lender reveals that total health expenditure in Bangladesh surged from Tk4,680 crore in 1997 to Tk77,720 crore in 2020 - representing a remarkable 16.61-fold increase, but public spending on health grew by a moderate 10.63 times during the same period.

Individuals' out-of-pocket spending experienced the most pronounced rise, increasing nearly 20.41 times over the period, a phenomenon largely attributed to limited growth in public sector health expenditure.

According to the report, allocation from the government for health services in percentage of gross domestic product (GDP) percentage of the total budget and as a share of total health costs in the country reduced over the period. 

The report revealed that the declining share of government health spending in real terms indicates a decreasing priority on the health sector.

It found significant inefficiency in the operation of the public sector budget in terms of allocative efficiency, technical efficiency and distributive efficiency. 

The lion’s share of the government allocation if the government for health goes for medicine and salary, wage and allowances of the staff and officials, the report revealed. 

A significant share of the health budget remained underutilised over a couple of decades, it added.

Out-of-pocket spending increased significantly

The report indicates that out-of-pocket (OOP) spending on healthcare has escalated substantially over the past two decades. 

In 1997, households spent Tk2,610 crore, which represented 55.8% of the total health expenditure.

By 2020, this amount had surged to Tk53,270 crore, accounting for 68.5% of the total health expenditure. 

This increase of Tk50,660 crore translates to a staggering 1941% rise, marking a 20.41-fold increase.

Government health expenditure has also grown but at a slower pace compared to OOP spending. 

In 1997, government spending was Tk1,690 crore, contributing 36.1% to the total health expenditure.

By 2020, it had increased to Tk17,970 crore, although its share of the total health expenditure dropped to 23.1%. 

This represents an increase of Tk1 crore6,280, a 963% rise, marking a 10.63-fold increase.

Development partners and non-governmental organisations (NGOs) have also played a crucial role in health financing. 

Contributions of development partners rose from Tk27,000 crore to Tk3,89,000 crore, an increase of Tk3,620 crore or 1341% - equating to a 14.41-fold rise. 

Similarly, NGO contributions increased from Tk50 crore to Tk1,340 crore over the same period, a significant increase of Tk1,290 crore or 2,580%, marking a 26.80-fold rise.

The private sector’s involvement in health expenditure has also grown, albeit from a smaller base. 

Spending increased from Tk60 crore to Tk1,250 crore, an increase of Tk1,190 crore or 1,983%, translating to a 20.83-fold rise.

Health spending accounted for 2.3% of GDP in 1997, with total health expenditure at 1.45% and OOP at 0.82%. 

By the year 2000, while total health expenditure remained constant at 2.3%, OOP rose slightly to 1.58% of GDP, and public spending decreased marginally to 0.77%.

Healthy ministry’s share in total budget also reducing

The allocation for the Ministry of Health and Family Welfare declined over the period, compared with the size of the national budget, according to the report of the World Bank.

It highlighted that the ministry received an allocation worth 6.2% of the national budget in the fiscal year 2010-11 but the share declined to 5% in the current fiscal.

The share saw a significant decline by 2014, reaching its lowest point at 4.1% and the percentage fluctuated but showed a general trend towards stabilisation, hovering around 5% in recent years.

Between 2017 and 2018, there was a notable increase, with the percentage rising from 4.7% to 5.2%. The budget share peaked in 2022 and 2023 at 5.4%, before slightly dipping again in 2024 to 5.0%.

Achievements in health sector

The report of the World Bank praised some improvements achieved in the last couple of years in the health sector of Bangladesh.

Life expectancy in Bangladesh increased from 64.5 years in 2002 to 72 years in 2021, thanks to public health advancements, revealed the report and added, maternal mortality rates dropped from 574 deaths per 1,00,000 live births in 1990 to 123 per 1,00,000 in 2020 due to government investments in antenatal care, skilled birth attendance, and family planning.

Child health also improved, with under-five mortality rates decreasing from 146 deaths per 1,000 live births in 1990 to 27 per 1,000 in 2021. 

Infectious disease control reduced tuberculosis and malaria rates significantly.

Efforts to combat malnutrition showed success, with stunting among children under five decreasing from 43.7% in 2011 to 31.9% in 2017-18, and underweight prevalence falling from 32.5% to 22.4%. 

These achievements are key to meeting Sustainable Development Goals (SDGs) on health and universal health coverage (UHC).

Still challenges remain in the health sector

Despite progress, Bangladesh faces challenges. High population density and ageing increase the risk of infectious and climate-induced diseases, requiring a person-centred primary health care system, revealed the report.

Health progress is uneven, with significant coverage gaps. 

Maternal mortality remains high at 123 deaths per 1,00,000 live births, exceeding the SDG target of 70. 

Urban women receive better antenatal care compared to rural women.

Malnutrition persists, with one in five women undernourished and one in three anaemic. 

Climate change worsens health outcomes. 

Managing non-communicable diseases (NCDs) like stroke, hypertension, and diabetes is challenging, accounting for two-thirds of the disease burden and mortality. 

Public sector gaps in NCD services lead to care breakpoints.

A poor-quality health system, inefficient resource allocation, and declining primary healthcare spending contribute to high health costs. 

In 2020, OOP expenditures made up 68.5% of total health spending, disproportionately affecting the poor.

Skilled health professional shortages and inadequate infrastructure further jeopardise the health sector. The pandemic has not improved the capacity to handle future health emergencies.

Bangladesh must transform its health system to build on progress and address deficits. 

Reforms are needed to enhance efficiency, improve resource distribution, enforce accountability, prepare for future challenges, and respond to rising healthcare expectations and global threats, said the World Bank.

It suggested strategic interventions and strong political leadership and said an in-depth review of Bangladesh’s health sector provides a roadmap for accelerating progress and ensuring equitable, efficient, and resilient health care for all citizens.

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