No plan to reduce out-of-pocket expenditure

Going against the trend of the neighbouring countries, the government has placed a budget that would further increase the people’s out-of-pocket expenditure (OOPE) on health.

According to the Health Economics Unit (HEU), in 2020, people in Bangladesh carried around 69 per cent of the total health expenditure which is in a rising trend for years.

Experts are saying that cutting the allocation to different segments of the health sector will ultimately increase people’s health expenditure more.

Responding to the proposed budget on Friday morning, the Centre for Policy Dialogue (CPD) said that Bangladesh’s out-of-pocket expenditure as a percentage of current health expenditure was 74% in 2020. The OOPE has been increasing in the country during the past two decades whereas it shows a decreasing trend in the neighbouring countries including India, Pakistan, Bhutan, Nepal and Sri Lanka.

In India, the OOPE as a percentage of the total health expenditure (THE) has declined substantially from 64.2 per cent in FY14 to 48.2 per cent in FY19. India’s Union Finance Minister M Nirmala Sitharaman while presenting the budget in February this year said their focus would remain on the issue.

But Bangladesh’s OOPE on health per capita was the 7th highest among 44 LDCs in 2020, CPD said.

Professor Syed Abdul Hamid of the Institute of Health Economics fears that the expenditure will further increase in the coming days.

“Following the devastating situation created by the Covid pandemic, we needed additional allocation in the health budget to reform the health sector, but the allocation made everyone disappointed,” he said.

The World Health Organisation (WHO) recommends that countries like Bangladesh should allocate 5 per cent of GDP to the health sector. But in the proposed budget, the allocation unfortunately is less than 1 per cent.

CPD said that at least 44 LDCs spent more than 1% of the GDP on healthcare in 2020. Bangladesh’s government expenditure on health as a share of GDP was the 4th lowest among 44 LDCs in 2020 – only Djibouti, Benin, and Gambia spent less on health than Bangladesh.

Research Director and Head of Research of CPD Dr Fahmida Khatun said that the share of the health sector (6.2 per cent) in the Annual Development Plan (ADP) for FY24 has decreased from 7.8 per cent in ADP FY23 – this indicates a 16% drop in monetary terms.

The decline in education and health sectors’ share in ADP is perhaps a reflection of their poor implementation during FY23, she added.

According to CDP, the total budget allocation for health has increased only by 3 per cent this year. Development budget allocation has decreased by 17 per cent, whereas non-development budget allocation increased by 24 per cent.

The share of development budget allocation in total health budget allocation has decreased from 51 per cent in FY23 to 41 per cent in FY24. Again, the share of revised development budget allocation in total health budget allocation decreased from 47 per cent in FY22 to 41 per cent in FY23.

Development budget utilisation has decreased from 86 per cent in FY12 to 76 per cent in FY22. Total budget utilisation decreased from 94 per cent in FY12 to 78 per cent in FY22, CPD analysis found.

Abdul Hamid said that further cuts in the allocation will hamper the progress that the country has made in the health sector.

No good news for device manufacturers

Experts and industry insiders said the government has proposed the import of some raw materials for drug production at a concessionary rate, but there is no good news for the manufacturers of medical devices.

Fahmida Khatun said that raw materials for medicines, medical products and some healthcare products will be imported at a concessionary rate. This will help reduce the cost of domestic production of these items.

On anonymity, the managing director of a pharmaceutical company said the import of raw materials for manufacturing cancer medicines at a concessionary rate will help reduce the prices of the medicines. The proposed budget might also contribute to reducing the price of antimalarial and anti-tuberculosis drugs.

“But the budget lacks a definite sign to pave the industry’s way to become self-dependent after LDC graduation,” the MD added.

Moushumi Islam, MD of Promixco, said: “We hoped that the import of raw materials for manufacturing medical devices would be allowed at a concessionary rate, but the proposed budget disappointed us.”

“The government promised a lot about providing support to the manufacturers but the assurances have not been realised in the proposed budget,” she said. “Whatever the situation is, the truth is the country needs an organised, priority-based development plan so that the country has a structured healthcare system and the OOPE comes down to the level the patients can afford,” she added.

Professor Dr Hamid said, “Such conventional health budget allocation will not help the patients much. We need major reform in the sector, including in the budget allocation.”