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Public Financial Management in the Health Sector in Lao People's

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Public Financial Management in the Health Sector in Lao People's Public Disclosure Authorized Public Disclosure Authorized Public Financial Management in the Health Sector in Lao People’s Democratic Republic - Service Delivery Challenges and Public Disclosure Authorized Opportunities Public Disclosure Authorized December 2018 Contents 1. Executive Summary ......................................................................................................................... 1 2. Objective and Background to this PFM Assessment in the Health Sector...................................... 8 2.1 Objective ................................................................................................................................. 8 2.2 Background and Approach ...................................................................................................... 8 3. The Health Sector in Lao PDR .......................................................................................................... 9 3.1 Overview ................................................................................................................................. 9 3.2 Access and Service Utilization ................................................................................................. 9 3.3 Health Service Delivery ......................................................................................................... 11 3.4 Health Financing ................................................................................................................... 12 3.5 Health Sector Reforms .......................................................................................................... 14 3.6 National Health Insurance .................................................................................................... 15 4. The PFM system in Lao PDR .......................................................................................................... 16 4.1 Overview ............................................................................................................................... 16 4.2 Constraints of the national level PFM systems ..................................................................... 17 4.3 PFM Reform Plan in Lao PDR ................................................................................................ 18 5. How PFM Bottlenecks Affect Service Delivery .............................................................................. 19 5.1 Overview ............................................................................................................................... 19 5.2 Data Collection ...................................................................................................................... 19 5.3 Planning and Budgeting ........................................................................................................ 20 5.3.1 National Systems ........................................................................................................... 20 5.3.2 MoH............................................................................................................................... 21 5.3.3 PHO Planning and Budgeting ........................................................................................ 24 5.3.4 Inadequate Supplies of Drugs and Equipment ............................................................. 25 5.3.5 Fragmented and Poorly Executed Infrastructure Budget ............................................. 28 5.3.6 Health Workforce – Resource and financing issues ...................................................... 28 5.3.7 Volunteer Health Workers ............................................................................................ 32 5.3.8 Health Workforce Issues ............................................................................................... 33 5.4 Budget Execution and Treasury ............................................................................................ 34 5.4.1 MoH............................................................................................................................... 34 5.4.2 Subnational Budget Execution ...................................................................................... 34 5.5 Accounting and Reporting .................................................................................................... 37 5.5.1 National Level and MoH ................................................................................................ 37 5.5.2 Subnational Systems ..................................................................................................... 37 ii 6. Options for Consideration ............................................................................................................. 39 7. Annexes ......................................................................................................................................... 43 Annex 1 – Bibliography ..................................................................................................................... 43 Annex 2 – Summary Findings from the PFM Health Assessments ................................................... 44 Annex 3 – Survey Questionnaires ..................................................................................................... 66 Annex 4 – List of Survey Respondents .............................................................................................. 94 Annex 5 – Summary of Performance Measurement Scores – 2010 PEFA ........................................ 96 Annex 6 - Other Macro Level Reforms That Will Impact On The Health Sector ............................... 97 Annex 7 – Recommendations from Other Assessments .................................................................. 99 List of Tables Table 1: Summary of Recommended Actions for MoH in Short to Medium Term ................................ 3 Table 2. Outpatient utilization of health services in the past four weeks by economic quintile (2012– 13) (%) ................................................................................................................................................... 10 Table 3: Health financing indicators – Lao PDR and comparator countries, 2015 ............................... 14 Table 4. Number of health workers and vacancies in 2016 .................................................................. 29 Table 5. Number of vacancies by level or location in 2016 .................................................................. 30 Table 6. Vacancies by type of health worker, 2016 .............................................................................. 31 Table 7. Filled and vacant positions by facility type 2016 .................................................................... 32 List of Figures Figure 1. PFM-related constraints on service delivery at the subnational level..................................... 7 Figure 2. Percentage of individuals who sought outpatient care (any type) in the past four weeks (by income quintile) (2012–13) ................................................................................................................... 10 Figure 3. Proportion of patients using facilities by type of facility ....................................................... 11 Figure 4. Cause-effect diagram on low rates of facility access and utilization ..................................... 11 Figure 5 Total Health Expenditure per capita, 2016 ............................................................................. 13 Figure 6 Composition of Health Expenditures ...................................................................................... 13 Figure 7. Public health spending including donor support (in LAK, billions) ........................................ 13 Figure 8. Proportion of facilities and offices involved in budget preparation by type of facility ......... 24 Figure 9. Proportion of facilities with skilled financial specialist by type of facility ............................. 24 Figure 10. Level of satisfaction with budget for operational purchases by facility type - 2018 ........... 26 Figure 11. Level of satisfaction with budget for repairs by facility type - 2018 .................................... 26 Figure 12. Cause-effect diagram on inadequate supply of equipment and drugs ............................... 27 Figure 13. Public health spending by chapter by year, and by level of government ............................ 28 Figure 14. Cause-and-effect diagram on health workforce shortages and misallocations .................. 29 Figure 15. Percentage of health facilities with doctor by province (2016) ........................................... 30 Figure 16. Proportion of qualified health workers by qualification and level of facility, 2016 ............ 31 Figure 17. Recruitment, retirement, and vacancy gap in 2016 (# of positions) ................................... 31 iii Figure 18. Numbers of volunteers and non-volunteers by type of health office or facility ................. 33 Figure 19. Reasons given for not seeking treatment when illness warranted treatment .................... 36 iv Acronyms and Abbreviations ADB Asian Development Bank ANC Antenatal Care CF Conceptual Framework CoA Chart of Accounts DH District Hospital DHO District Health Office DoF Department of Finance DPC Department of Planning and Cooperation DRF Drug Revolving Fund DT District Treasury EU European Union FMIS Financial Management Information System GDP Gross Domestic Product GFIS Government Finance Information
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