Pakistan Bureau of Statistics National Health Accounts
xi List of Figures Figure 1: Total Health Expenditure by main financing agents in the FY 2021-22 in % ................... xiv Figure 2: Key health expenditure indicators, by SAARC with neighbouring countries for the FY 2019-20…..…………..………………………………………….………..…………………………………xvi Figure 3: Flow of funds ....................................................................................................................... 4 Figure 4: NHA links to health policy .................................................................................................... 5 Figure 5: General Government Health Expenditure by its financing agents 2021-22 in % ............ 16 Figure 6: Private Health Expenditure breakup by its main financing agents 2021-22 in % ............ 18 Figure 7: Three axes of health accounts .......................................................................................... 73 Figure 8: Overview of social protection in Pakistan .......................................................................... 80 Figure 9: Social security system in Pakistan .................................................................................... 82
List of Matrices Matrix 1: Current health expenditures by financing sources and financing agents in Pakistan 2021- 22 (Million Rs.) .................................................................................................................................. 27 Matrix 2: Current Health Expenditures by Health Care Providers and Financing Agents 2021-22 (Million Rs.) ....................................................................................................................................... 35 Matrix 3: Financing Sources by Financing Agents - Punjab Current Health Expenditures 2021-22 (Million Rs.) ....................................................................................................................................... 40 Matrix 4: Financing Sources by Financing Agents – Sindh Current Health Expenditures 2021-22 (Million Rs.) ....................................................................................................................................... 41 Matrix 5: Financing Sources by Financing Agents – Khyber Pakhtunkhwa Current Health Expenditures 2021-22 (Million Rs.) ................................................................................................... 42 Matrix 6: Financing Sources by Financing Agents –Baluchistan Current Health Expenditures 2021- 22 (Million Rs.) .................................................................................................................................. 43
Pakistan Bureau of Statistics National Health Accounts
xii List of Annexure Annexure 1: Data sources ................................................................................................................ 88 Annexure 2: Literature ...................................................................................................................... 89 Annexure 3: Structure of Provincial Health Care .............................................................................. 90 Annexure 4: Schematic overview of Health Care System ................................................................ 91 Annexure 5: Military Health Care System ......................................................................................... 92 Annexure 6: ICHA classification financing sources (FS) .................................................................. 94 Annexure 7: ICHA classification financing agents (HF) .................................................................... 94 Annexure 8: ICHA classification for health care providers (HP) ....................................................... 95 Annexure 9: ICHA classification for health care functions (HC) ....................................................... 96 Annexure 10: Functional Classification (by PIFRA) ......................................................................... 99 Annexure 11: Purchases of pharmaceuticals (million Rs.) ............................................................. 101 Annexure 12: Questionnaires of Census of Autonomous Bodies/Corporations & Out of Pocket Health Expenditures 2019-20 ......................................................................................................... 103
Pakistan Bureau of Statistics National Health Accounts
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List of abbreviations
AGPR
Accountant General Pakistan Revenues
BHUs
Basic Health Units
CoA
Chart of Accounts
CMHs
Combined Military Hospitals
DAOs
District Account Offices
DHQ
District Headquarter Hospital
EAD
Economic Affairs Division
ESSI
Employment Social Security Institution
FBR
Federal Board of Revenue
FY
Financial Year
GDP
Gross Domestic Product
HIES
Household Integrated Economic Survey
ICHA
International Classification of Health Accounts
ILO
International Labour Organization
ICT
Islamabad Capital Territory
IPC
Inter-Provincial Coordination
IMF
International Monetary Fund
MCHC
Maternal and Child Health Centre
MoF
Ministry of Finance
CGA
Controller General of Accounts
MoNHS
Ministry of National Health Services, Regulations & Coordination
NGOs
Non-Government Organizations
NHA
NLHI
National Health Accounts
National Level Health Institutions
NPOs
Non-profit Organizations (synonymous with non-profit institutions)
NSK
Not Specified by Kind
OECD
Organization for Economic Co-operation and Development
OOP
Out Of Pocket
PAOs
Provincial Accounts Offices
PBS
Pakistan Bureau of Statistics
PIFRA
Project for Improvement in Financial Reporting and Auditing
PSLM
Pakistan Social and Living Standards Measurement Survey
RoW
Rest of the World
SECP
Securities & Exchange Commission of Pakistan
SHA
System of Health Accounts
TB
Tuberculosis
WHO
World Health Organisation
Pakistan Bureau of Statistics National Health Accounts
xiv
Executive Summary
National Health Accounts (NHA) is a macro-economic accounting framework for reveal-
ing a country’s aggregated expenditures on health. The compilation of NHA -Pakistan reports
follows international standards set by WHO and OECD. This report presents the results for fiscal
year 2021-22 which is the 9th round of such a compilation. Earlier rounds were published for
fiscal years 2005-06, 2007-08, 2009-10, 2011-12, 2013-14, 2015-16, 2017-18 & 2019-20.
Total health expenditure in Pakistan in the fiscal year 2021-22 is estimated at Rs. 1,962
billion. This shows an increase of Rs.496 billion over the fiscal year 2019 -20, which is around
34% increase in nominal terms as it includes inflation of health care goods and services.
As per the results of ‘financing agents’ for the fiscal year 2021-22, it has been observed
that out of total health expenditure in Pakistan, 47% are made by general government. Out of
total general government health expenditures, 25% are incurred by the federal government out
of which 74% accrue from its civilian part and 26% from its military setup. Around 52.6% of the
health expenditures are made through private sector out of which 8 9% is out of pocket (OOP)
health expenditures by private households. Development partners/donor’s organizations have
0.4% share in total health expenditures of Pakistan for the FY2021-22.
Figure 1: Total Health Expenditure by main financing agents in the FY 2021-22 in %
The annual per capita Current Health Expenditures (CHE) for Pakistan as per NHA 2021-22 are (48.05US$) Rs. 8,526 while in NHA 2019-20 it was (40.7US$) Rs. 6,432. According to NHA-2021-22 report, the ratio of CHE to Gross Domestic Product (GDP) is 2.91%, while the ratio of general government health expenditures to total general government final consumption
Pakistan Bureau of Statistics National Health Accounts
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expenditure is 13.2%. The ratio of private sector health expenditures according to NHA over
total household final consumption expenditure are 1.8%.
For comparison, the following table gives an overview of some Key health expenditure
indicators in respect of SAARC countries along-with China & Iran (neighboring countries of Pa-
kistan) for 2019-20.
Table 1: Key health expenditure indicators, by SAARC countries, China & Iran for the FY 2019-20
Sr. No
Country
Indicators
CHE Per Capita in US$
OOP Health Expenditure as % of CHE
1
Pakistan1
40.7
55.44 (47% 2021-22)
2
India
56.63
50.59
3
Bangladesh
50.66
74.00
4
Sri Lanka
151.06
46.58
5
Nepal
58.31
54.17
6
Bhutan
133.70
15.42
7
Maldives
825.57
16.91
8
Afghanistan
80.29
74.81
9
Iran
573
37
10
China
583
35
Sources: NHA-Pakistan 2019-20 report and WHO, https://apps.who.int/nha/database/Select/Indicators/en
OOP spending as a share of total current health expenditure measures the size of OOP in the total national current health spending. It shows how much the health system relies on households OOP spending to finance it. The above table shows that OOP spending is still the largest source of health care financing in five out of eight SAARC countries as OOP spending is more than 50% of CHE. Figure 2: Key health expenditure indicators, by SAARC with neighboring countries for the FY 2019-20
1 Figures by indicators of Pakistan are according to NHA-2019-20 report while the latest figures for the SAARC, Iran and China were available on the WHO website for the FY 2018-19.
Pakistan Bureau of Statistics National Health Accounts
xvi OOP spending is a payment by households directly to health providers to obtain services and health products. It includes purely private transactions (individual payments to private doc- tors and pharmacies), official patient cost-sharing within defined public or private benefit pack- ages, and informal payments
For the 9th rounds of NHA 2021-22, the results of the census of big hospitals and survey of the rest of health care providers for FY 2009 -10 have been extrapolated forward in order to arrive at the respective estimates for the year 20 21-22. In its 9th round, the big advantage of including data of the private health care providers is to authenticate or reconcile information based on demand-side data derived from supply-side data (private providers).
Despite of its name “National” Health Accounts, NHA also provides figures of the four provinces Punjab, Sindh, Khyber Pakhtunkhwa (KP) and Baluchistan. It is not fully comprehen- sive as the total health expenditures for the provinces do not sum up to the national total. For empirical reasons only Rs. 1,724 billion of Pakistan’s total current health expenditures could be allocated to the p rovinces (“regionalized”). Overall, the results of the respective provinces in Chapter 3 of this report shows the shares of financing agents of the health expenditures which are relatively heterogeneous among the provinces.
NHA Pakistan estimates for the year 2021-22 are based on the concepts, accounting framework and guidelines of WHO. The compiled accounts are also internationally comparable, as NHA Pakistan has adopted the International Classification of Health Accounts (ICHA) of WHO. The annexure provides abbreviated versions.
Pakistan Bureau of Statistics National Health Accounts
- Introduction
Pakistan Bureau of Statistics National Health Accounts
Pakistan Bureau of Statistics National Health Accounts
3
1.1 Scope, purpose and limits of health accounts
The definition recommended for developing countries by WHO for health expenditures is as
follows:
“National health expenditure encompasses all expenditures for activities whose primary pur-
pose is to restore, improve, and maintain health for the nation and for individuals during a defined period
of time”2. Health expenditures in the context of NHA as well as in the context of this report stand for
inclusion of the health care functions under classification codes HC.1 to HC.7 plus capital formation by
health care providers (HC.R.1). For details see Annexure 9 of this report.
NHA Pakistan comprises of the health expenditures for the four provinces (Punjab, Sindh, Khy-
ber-Pakhtunkhwa and Balu chistan) and federal health expenditures, which amounts to the national
health expenditures. NHA Pakistan shows health expenditure for and of Pakistani citizens and residents
as well as spending by external agencies, like bilateral donor agencies and UN offices , on inputs to
health care in Pakistan. This means that NHA Pakistan:
Includes:
■ Health expenditures by citizens and residents temporarily abroad
■ Donor spending (both cash and in -kind) whose primary purpose is the production of
health and health-related goods and services in Pakistan
Excludes:
■ Health spending by foreign nationals on health care in Pakistan (as NHA treats this as
export of health care services and does not include in NHA estimation)
■ Donor spending on the planning and administration of such health care assistance
It is recommended that NHA may use the accrual method in accounting for expenditures, not
the cash method. This would mean that expenditures are related to the time period during which the
actual activity takes place. The accrual method uses the expenditures, which are attributed to the time
period during which the economic value was created whereas the cash method refers to the expendi-
tures, which are registered when the actual cash disbursements take place. However, the data situation
in Pakistan does not allow for application of the accrual method. For the time being the figures presented
for Pakistan’s NHA are cash-based.
The earlier rounds of NHA-Pakistan were dedicated to FYs 2005-06, 2007-08, 2009-10, 2011-
12, 2013-14, 2015-16, 2017-18, 2019-20. According to advice from the WHO the scope of tables for
the first round was limited. While in the second, and onwards rounds including the current r ound of
NHA-Pakistan 2021-22, besides the updated information on previous tables, it contains information on
the dimension of health care providers as well. More comprehensive NHA will be available in the up-
coming rounds as it is a cumbersome task to collect data on all the required entities, though the prelim-
inary and partial NHA reports would be published time to time as per availability of data. It is hoped that
NHA in Pakistan would be a milestone towards the evidence-based policy making in health sector.
The primary aim of developing NHA framework for Pakistan…
• To describe the flow of funds, sources and uses of funds in the health care system,
• To map out the profile of the health care system,
• To build and enhance sustainable capacity for NHA in PBS.
One of the objectives of NHA is to give the comprehensive picture of health care spending in
the country and to show the flow of funds dedicated to health expenditure in an overall, comprehensive
and self-checking accounting framework of internationally agreed standards (see Figure 2).
2 World Health Organization, 2003, Guide to Producing National Health Accounts: with special applications for low -income and middle-income countries, pp. 20. Pakistan Bureau of Statistics National Health Accounts
4 NHA is a standard set of matrices, or tables, which presents various aspects of a nation’s health expenditures and deals with the questions like, (i ) who is financing health care in a particular country? (ii) how much do they spend? and (iii) on what type of services? This globally accepted tool based upon the expenditure review approach, highlights the “financial health” of national health systems in respec- tive country3. Figure 3: Flow of funds Source: WHO, Guide to producing national health accounts NHA is designed particularly as a tool for improving the capacity of health sector planners to manage their health systems. The NHA methodology organizes and presents health spending infor- mation in a manner that even those who do not have a backg round in economics or statistician easily understand and interpret the results. It allows policy makers to understand how resources are used in a health system and to assess the efficiency of resource used (if NHA is combined with other data sets) and to e valuate impact of health reform s on different stake holders i.e., who are the beneficiaries of health expenditures, poor or rich? NHA have a vital role in devising a better informed and more participatory policy and health sector reforms and developing a more equitable and sustainable health financing system in the country. Figure 3 shows how NHA can be linked to the health policy questions. NHA also allows for comparisons of health expenditures at different points in time as well as the cross-country comparisons where data is available.
NHA have a vital
3 World Health Organization, 2003
Financing Agents
Rs
Rs
Providers
Health services
& Functions
Functions
Beneficiaries
(By age, sex, region, disease, income group)
Financing Sources
Pakistan Bureau of Statistics National Health Accounts
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Figure 4: NHA links to health policy
Health policy decision
areas Flow of resources in
health financing Some key policy questions
Resource mobilization /
financing strategies
Financing Sources ▼
How are resources mobilized? Who pays? Who finances? Under what scheme?
Pooling arrangements
Cost recovery regulation of payers
Financing Agents ▼
How are resources managed? What is the financing structure? What pooling arrangements? What payment / purchasing ar- rangements?
Financial incentives
Subsidies
Resource Allocation
Provider regulation
Inputs, Providers,
Functions
▼
Who provides what services? Under what financing arrange- ments? With what inputs?
Targeting redistributive pol- icies
Important distributions e.g. age, gender, location, social status
Who benefits? Who receives what? How are resources distributed? Source: National Health Accounts Trainer Manual 2004 Financing Sources are institutions or entities that provide the funds used in the system by Fi- nancing Agents. In Pakistan, the Financing Sources would typically include the Federal Government, Provincial Governments, donors, NGOs, insurance companies, and households. Financing Agents include institutions or entities that channel the funds provided by Financing Sources and use those funds to pay for, or purchase, the activities inside the health accounts boundary. In Pakistan, these include the Ministry of National Health Services, Ministry of Defense, autonomous bodies, NGOs, and households etc. Providers include entities that receive money in exchange for or in anticipation of producing the activities inside the health accounts boundary. Examples of providers are hospitals, clinics, Community Health Centers in the public and private sectors, pharmacies, private practitioners, traditional health care providers etc. Functions are the types of goods and services provided and activities performed within the health accounts boundary. It includes services of curative care (inpatient and outpatient), medical goods (e.g., pharmaceuticals, and appliances), prevention and public health services, health administration and health insurance, etc. Presently, there are different methodologies in practice around the world to estimate the health accounts, most common are (i) System of Health Accounts (SHA) developed and used by OECD and some other countries; (ii) National Health Accounts (NHA) which are based on SHA but with more flexibility regarding classifications and more appropriate for developing countries because it allows to add the traditional care providers in the system. In this regard, WHO has published “Guide to Producing National Health Accounts: with special application for lo w income and middle-income countries”. More recently WHO, OECD and EUROSTAT, jointly worked on revision of SHA and came up with a single Pakistan Bureau of Statistics National Health Accounts
6
coherent document (SHA 2011) which is to be followed globally for conducting health accounts. SHA
2011 has already been released and available on the websites of WHO, OECD and EUROSTAT.
The main purposes of the System of Health Accounts are the provision of internationally com-
parable health accounts, the definition of internationally harmonized boundaries, the presentation of
tables for the analysis of flows of financing and the monitoring of economic consequences of health
care reform and health care policy.
As suggested, the NHA work in Pakistan has been done under the guidelines of WHO. Also,
the International Classifications of Health Accounts (ICHA) has been used, tailor-made to include the
categories relevant to Pakistan. These classifications assign a unique code to different actors in health
sector and classify each of them in sub- classification codes, allowing for a systematic tracking of health
expenditures in the economy. Cross tables namely-financing sources by financing agents, financing
agents by health providers have been developed in this report.
In this report as well as in NHA-related literature the terms “health expenditures” and “health
care expenditures” are used almost as synonyms. “Health expenditures” is the broader term covering
administrative and other services while “health care expenditures” usually is used for the medical and
curative part of these services in a narrower sense.
Despite of the fact that NHA gives very detailed and comprehensive information on health ex-
penditures and provide a basis for evidence-based health policy, there are some limitations of NHA as
well. Mainly NHA cannot provide information on efficiency and cost effectiveness. The following table
gives the insight to strengths and limitations of NHA.
Table 2: Limitations of NHA
Question
Does NHA address it?
What is total spending on health?
Yes
Who is spending it?
Yes
What is being spent on?
Yes
What are the sources of this expenditure?
Yes
How does this compare to other countries?
Yes, if other country has NHA
What are the main trends?
Yes, if there is time series
How efficiently are the funds being allocated and spent?
No
How to improve the financing of health services by:
a) increasing the resources available?
No
b) using existing resources more efficiently?
No
Are subsidies or public transfers effectively targeted to poor and vulnerable groups?
Generally, no
Source: Mark Pearson, National Health Accounts: What Are They and How Can We Use Them? Briefing Paper, A paper
produced by the Department for International Development Resource Centre for Health Sector Reform, 2000.
To build and enhance capacity within PBS, NHA Section has conducted different trainings on
NHA as well. The objective is to make PBS capable of conducting NHA studies at regular intervals
(usually every two/three year) without external technical assistance. Institutionalization of NHA is facil-
itated by investment in the development of data tracking and reporting systems, accounting systems,
and associated activities such as the various surveys required by the NHA study. This investment not
only produces required financial data but also improves country capacity in health sector analysis, evi-
dence-based policymaking as well as skills in designing and conducting various types of surveys.