Inadequacies in Pakistan's health budget planning highlighted by the World Bank
In a recent report titled "Budget execution in health: from bottlenecks to solutions," the World Bank has identified serious inefficiencies in Pakistan's health budgeting system.
One of the key issues highlighted is the extensive approval process for even low-value transactions, such as a bill as small as Rs200 in Pakistan undergoing the same extensive approval process as one exceeding Rs1 million. This, according to the World Bank, causes unnecessary delays and duplication of internal controls.
Moreover, the report notes chronic weaknesses in fund release mechanisms in Pakistan. Health facilities have reported that unpredictable and delayed disbursements compromise their ability to meet operational costs, including payment of utility bills.
The lack of autonomy for health facilities in managing their finances is a significant challenge in Pakistan. This lack of autonomy is particularly acute, as highlighted by the World Bank. The highly centralized budgeting processes often result in unrealistic cost projections and a mismatch between allocations and actual service delivery needs.
Weak cashflow management and poor revenue forecasts in Pakistan have contributed to frequent under-execution of the health budget. The World Bank's report did not address the role of fiscal constraints and mid-year cuts in exacerbating these problems.
The World Bank study also highlights the challenge of relying on historical allocations instead of proper costing estimates for annual health budgets. Overruns or underruns in expenditure have occurred due to this practice.
Automated reporting systems exist in Pakistan, but poor connectivity leads to delays in financial reporting from decentralized facilities, reducing the government's ability to monitor execution in real time.
The organization responsible for implementing the announced financial reforms in Pakistan's healthcare sector is the Government of Pakistan, supported by the World Bank. The World Bank plans to approve a $600 million Public Resources Programme for these reforms, with a grant of approximately 750 million US dollars.
However, the report did not discuss the impact of the proposed programme on the efficiency of Pakistan's health budgeting system. Nor did it specify whether the lack of autonomy for health facilities in managing their finances is unique to Pakistan or a common challenge across case-study countries.
The World Bank emphasized the need for broader reforms to improve efficiency in Pakistan's health budgeting system beyond the "Green Corridor" mechanism for low-value transactions. These reforms are crucial to ensure that funds are allocated and disbursed effectively, improving the delivery of healthcare services in Pakistan.
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