SriLanka National Health Accounts 2000 –2002

Research team

IPS Research Team

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ISBN

955-8708-44-9

Published Year

December 2005

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US$ 20

Executive Summary

This report presents the Sri Lanka National Health Accounts (SLNHA) preliminary estimates for the period of 2000-2002. Estimates throughout this report are derived from the Data Base of the IPS Health Policy Programme.

The estimates cover total national health expenditures, disaggregated by basic areas of expenditure by source, functions, and by provider. It also provides estimates of expenditure at the Central and Provincial level by source and by functions. The report concludes with comparative health expenditures of selected countries, for which data exist.

The expenditure aggregates in this report are expressed both in nominal terms, and in constant (1996) prices. In converting current price aggregates into constant prices the Central Bank’s GDP deflator has been used throughout. Estimates of private expenditures are compiled mostly from survey sources.

Health Expenditures Sri Lanka National Health Account 2002 is reported domestically using SHA based SLNHA conceptual framework. It is based on the OECD System of Health Accounts using locally adapted classification system for source, function and provider.

Trend in Total Expenditure on Health

The Total Expenditure on Health (TEH) which was Rs. 11 billion in 1990 had reached Rs. 59.5 billion in 2002 or 3.8 per cent of GDP. The latter compared with 3.7 per cent of GDP in the years 2000 and 2001.

The annual growth of TEH which was 14 per cent in 2000 declined to 13 per cent in 2001 before increasing to 15 per cent in 2002. TEH per capita was Rs. 2,499 or US $ 31 in 2000 but increased to Rs. 3,152 or US $ 33 in 2002.

Expenditures by Source

In 2002 total government health expenditure amounted to Rs. 25.8 billion, which was 43 per cent of total financing while the private sources financed Rs. 33.7 billion equivalent to 57 per cent. In 1997 the respective shares of the government and the private sources were approximately 50 per cent each. The rate of increase of government expenditure was 15 per cent in 2000, 13 per cent in 2001 and 15 per cent in 2002.

In GDP terms, government sources accounted for 1.6 per cent of total health expenditure in 2002, while the private sources contributed 2.1 per cent. Private expenditures increased from 1.9 per cent of GDP in 2000 to 2.0 per cent in 2001, and 2.1 per cent in 2002.

Government sources consisted mainly of central government revenues and donor assisted external resources. Other government sources were the President’s Fund, Employees’ Trust Fund (ETF) and the Provincial Councils revenues which were relatively insignificant.

Private expenditure funding sources were mostly household out-of-pocket spending, with smaller contributions from private sector employers, commercial health insurance and NGOs’ own sources of funding.

Expenditures by Function

Services of curative care, and medical goods dispensed to out-patients are the two largest categories of spending by function.

Services of curative care which includes mainly hospital in-patient care services, hospital out-patient care services and services of rehabilitative care accounted for 49 per cent of total spending by function, followed by retail sales and medical goods dispensed to out- patients which was 29 per cent in 2002. Services of curative care were mostly funded by government sources.

Out of the total government spending by function, Services of Curative Care account for 65 per cent in 2002. Share of Preventive and Public Health Services has remained at 9 per cent 2000 through 2002.

In the Non-government sector’s spending by function, Services of Curative Care accounted for 36 per cent in 2002, which was 40 per cent in 2000 and 38 per cent in 2001.

A marginal increase was seen in the share of Health Programme Administration and Health Insurance at national level, from 4 per cent to 5 per cent during 2000 to 2002. Share of Capital Formation of Health Care Provider Institutions declined from 10 per cent in 2000 to 7 per cent in 2002. In the government sector, capital formation decreased from 21 per cent of total expenditure in 2000 to 15 per cent in 2002.

Provincial Expenditures

Consequent to the 13th Amendment to the Constitution and the setting up of Provincial Councils, certain functions connected with health were devolved to the Provincial Councils. The Central Government MOH retained the policy making responsibilities, national health planning functions, teaching hospitals, other specialized hospitals, island- wide medical services, and transferred most of the primary, secondary and other health care functions to the eight Provincial Councils. In 2000 the Provincial Special Development Grant (PSDG) was introduced for project-based capital expenditures and all other grants such as Criteria Based Grants, Matching Grants, and Block Grants came through the Ministry of Provincial Councils and Local Government on the recommendation of the Finance Commission. These transfers have been taken into account as Provincial Council expenditure since it is the responsibility of Provincial Councils to expend on health services.

The share of central government spending at provincial level was in the region of 60 per cent of total government spending in 2002. Provincial Council spending fluctuated between 32 per cent 33 per cent. Total health expenditure varied widely between the Western Province and all other provinces mainly due to the facilities located in the Western Province by the Central MOH. It is to be noted that the majority of teaching hospitals and specialised care units which fall under MOH and most of the private sector health care institutions are located in the Western Province. Per capita spending gap between the Western province and the province with the second highest level is around 37 per cent. In nominal terms, Government expenditure by province also varies largely between the Western Province and the other provinces. The gap between the Western province and next highest spending province is around 200 per cent.