The Financial Express

Healthcare financing in Bangladesh

How to fight current and oncoming effects of Covid-19

| Updated: November 17, 2021 21:05:18

A patient, receiving oxygen from portable cylinder, is accompanied by others in front of a hospital in Dhaka last year. —FE Photo A patient, receiving oxygen from portable cylinder, is accompanied by others in front of a hospital in Dhaka last year. —FE Photo

As the Covid-19 pandemic enters its second year, rising cases and the spread of the more infectious Delta variant have significantly worsened the situation in Bangladesh. The adverse impacts of the pandemic are felt not only through the increased pressure on the health sector but also through the economic impacts related to lockdowns.

In late 2020, ThinkWell undertook a study to fully grasp the effects of Covid-19 on the Bangladesh health system, in partnership with the Planning Wing and the Health Economics Unit of the Ministry of Health and Family Welfare (MOHFW) in collaboration with the Institute of Health Economics at the University of Dhaka. The study analysed health service data and found that compared to 2019, the utilisation of essential health and family planning services declined significantly at the onset of theCovid-19 pandemic. The study also analysed resource allocations, grants, and incentives given to the health sector in 2020 to combat the Covid-19 pandemic and used this information to make recommendations to sustain the delivery of essential health services and support the fight against future waves of the pandemic.

In addition to significant volumes of stimulus funding to overcome the economic impacts of the Covid-19 pandemic, the Government of Bangladesh recruited 5,000+ nurses and 2,000+ doctors from a prequalified waiting list during the initial Covid-19 period. This initiative supported sustaining the essential health services delivery given the long-standing human resources shortages in the health sector. To increase health system preparedness for future health emergencies, the government could consider maintaining a list of prequalified candidates for each health cadre (doctors, nurses, lab technologists, and others).

To ease the initial stress from the first wave of Covid-19 in the health sector, the government allowed unspent money allocated to hospitals for medical and surgical requisites (MSR) to be used for pandemic-related expenses. Now, a separate allocation has been made to address Covid-19 expenses in FY 2021-22. However, improving and streamlining the process for reallocating the budget surpluses could further increase health system resilience in addressing future waves of Covid-19 and similar threats. Initiatives to address the gaps in health managers' knowledge and capacity to manage financial resources in general, and the increased flexibility of the MSR budget in particular would significantly improve the efficiency of government spending on the pandemic response.

Additionally, during the first wave of the pandemic, grants and health resources donated by cross-sector agencies and development partners supported the threats of Covid-19. Assistance like this will continue to play a vital role as Covid-19 surges in Bangladesh, especially ensuring that hospitals have ready access to oxygen, vaccines, and other necessities. Actions are taken by the community and local NGOs to initially combat the Covid-19 pandemic by a variety of means, including through cash assistance programmes for the poor, raising awareness on the risks of Covid, and mobilising critical supplies like personal protective equipment and oxygen. These community-led and community-owned initiatives will be essential components of the country's ongoing response to the pandemic.

Almost three-quarters (74 per cent) of the money spent on health in Bangladesh comes from the pockets of the general people, and this rate is growing at an alarming pace. Covid-19 might have increased the amount of money spent on healthcare by individuals. Establishing strategic partnerships with private healthcare providers could be yet another possibility for the government to consider expanding healthcare access to every citizen and reducing the burden of healthcare-related costs. An interesting finding of the collaborative study was that a few district- and sub-district-level hospitals were struggling to make full use of the funds allocated by Ministry of Health and Family Welfare to address Covid-19. This seems to be due to administrative complexities and a lack of understanding of budget management procedures among health managers.

Aside from issues with budget management, the annual budget planning process for health facilities rarely considers local needs; instead, budgets are just increased proportionally based on the previous year's allocations. On top of this, surplus funds dedicated to specific items are not allowed to be spent on another item; unused money is returned to the central treasury.

Factors mentioned above, including procedural requirements, lack of capacity, and gaps in awareness were found as the root causes of budget inefficiency.

The MOHFW allocation process follows a standard set of rules, and efficient use of funds and delivery of services is an immense struggle for local health managers. This can be solved in a handful of ways:

1. Selected procedures for financial management could be simplified at all levels without altering the accountability process,

2. Health facility budgets could be better tailored to local needs through improving the capacity of local health managers to plan and develop those budgets,

3. Knowledge of accounting and financial management best practices should be improved across local health managers through targeted capacity-building and training, and

4. The process of budget utilisation could be eased for different line items at the health facility level, including approval for changing line items (unspent funds dedicated to one health area could be used to address a deficit in another area).

These actions could play an important role in strengthening the health sector's capacity in responding to the Covid-19 pandemic and future health emergencies. ThinkWell and its partners call on the health community of Bangladesh and policymakers to take a closer look at the nuances of Covid-19, its effects, and how to address them.


Dr. Shamima Akhter, Md. Nurul Amin, Professor Syed Abdul Hamid,Afroja Yesmin, Md. Tarek Hossain, Dr. Mursaleena Islam, and Professor Nasrin Sultana are from the Health Economics Unit of the Ministry of Health and Family Welfare,

ThinkWell Bangladesh, and Institute of Health Economics at the University of Dhaka.

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