1 Public Expenditures Review in Health Agnes Soucat, Lead Economist

2 Presentation Outline Efficiency Analysis and PERs Equity Analysis and PERs Public Expenditure Management and PERs

3 Efficiency Analysis and PERs Examples Efficiency Analysis: –Allocative efficiency: does money go to priority areas? –Technical efficiency: are the inputs minimized for a given output? –Input efficiency: Is the balance of inputs appropriate?

4 Allocative Efficiency Key questions: –Is the public spending focused on pure (or nearly pure) public goods or goods with large externalities ? –Is the public spending focused on activities that contribute to increased returns in education and investments, economic growth and poverty reduction? –Is the public spending focused on activities that are most likely to benefit the poor?

5 Priority Programs (examples) vector control: eg: snails, rats, mosquitos …. environmental health : eg: toxic wastes, quality of water, clean air communicable disease surveillance and management: eg Tuberculosis Immunizations: “herd immunity”

6 Per capita GDP 1990 Improvements in health and economic take-off: changes in Per Capita GDP and IMR in Singapore Contribution to Economic Growth and Poverty Reduction..

7 IMR at the time of Economic Take-off in East Asia Contribution to Economic Growth and Poverty Reduction..

8 Nutrition in agriculture based economies Some diseases: HIV, malaria Child mortality, fertility reduction associated with high investment in education and low dependency ratios Contribution to Economic Growth and Poverty Reduction..

9 Efficiency Analysis and PERs Examples Efficiency Analysis: –Allocative efficiency: does money go to priority areas? –Technical efficiency: are the inputs minimized for a given output? –Input efficiency: Is the balance of inputs appropriate?

10 Technical Efficiency: Key questions –What is the relative weight of various sub- sectors (e.g. Tertiary VS Secondary VS Primary VS outreach VS community based programs ) -What is the mix of services provided (e.g. Curative Vs Preventive)

11 Technical Efficiency:

12 Relative allocation to levels of care: Mauritania Technical Efficiency:

13 Efficiency Analysis and PERs Examples Efficiency Analysis: –Allocative efficiency: does money go to priority areas? –Technical efficiency: are the inputs minimized for a given output? –Input efficiency: Is the balance of inputs appropriate?

14 Input Efficiency Key questions: –Are recurrent cost at the level required by capital invested (eg unreliable, insufficient funding of key inputs (drugs)..) –Are Non-Salary Recurrent expenditures and the wage bill balanced? (e.g s alaries crowding out other inputs, non salary recurrent “recycled” into staff incentives)

15 Evolution of health budget: Mauritania Input Efficiency

16 Presentation Outline Efficiency Analysis and PERs Equity Analysis and PERs Public Expenditure Management and PERs

17 Equity Analysis and PERs Examples Equity Analysis: –Physical Access –Human Resource Deployment –Availability of Drugs or other inputs –Benefit Incidence Analysis Equity and Financing Mechanisms –Insurance Incidence –Impact of Cost Recovery

18 Physical Access to Essential Health Services, Mauritania, 1999 Poorer Richer

19 Availability of Nurses and Infant Mortality- Cameroon 1999

20 Availability of Essential Drugs per Region, Mauritania, 1999 Poorer Richer

21 BIA India Example Who Gets the Public Subsidy?

22 Population covered by publicly funded health insurance, Thailand 2000