Case Example Financing Maternal Health Services in Uganda

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					          Case Example: Financing Maternal Health Services in Uganda
                                   Freddie Ssengooba and Barbara McPake
                  For the World Bank Institute’s Third Annual Adopting to Change Core Course

Uganda is one of the East African countries with a population of 22 million and population growth rate of
2.5% annually. Most Ugandans live in rural areas with 14 percent urban population. At $ 300 per capita
GNP, Uganda is among the poorest countries in the world. The average life expectancy is 47 years while
the population per physician is 18,575 and per midwife is 1800. Overall literacy rate stands at 54 percent
with female literacy at 45 percent.

Since 1986, the government has pursued economic policies and structural adjustments with the support of
development partners. Although still among the world’s poorest countries, the annual economic growth
rate has averaged 6.5 of GDP since 1990. Major increases in the GDP have come from agro-based
industries, manufacturing, construction, and transport sectors. Coffee, tea and cotton are the major
earners of foreign exchange. Using minimum basic expenditures for food and basic family requirements
of $ 24 per month, 10% of the population has been lifted above this absolute poverty level during the period
1994 to 1997. However, 45 percent of Ugandans still live in absolute poverty by this definition.

In a bid to deal with poverty and its influence on people’s health status, the government has put in place a
multi-sectoral poverty alleviation action plan with the top priorities being universal primary education
(UPE), primary health care, rural water and sanitation, rural roads maintenance and agricultural extension
and modernization. UPE provides opportunity for free basic education and has improved school enrolment
of girls. It is envisaged that action in these priority areas will provide an impetus for development in all
other sectors of the economy and improve maternal health status in Uganda.

Health Status
Indicators of health status such as life expectancy of 47 years, infant mortality rate of 97/1,000 live births
and maternal mortality rate of 504/100,000 live birth points to a low level of health status. Largely
preventable diseases (National and District Burden of Disease, 1995) account for over 75% of the life
years lost to premature death. Perinatal and maternal conditions account for 20.4% of the life years lost
due to premature death. Malaria accounts for 15.4%, pneumonia 10.5%, AIDS 9.1% and diarrhea 8.4%.

Maternal Health Status
The prevailing high rates of fertility (6.8 birth per woman) – in an environment of poor access to quality
maternal and neonatal care – have continued to expose Ugandan mothers and infants to the highest risk of
dying from pregnancy related causes (Safe Motherhood, 1997). The main causes of maternal morbidity
and mortality in Uganda include preventable/treatable causes such as abortion, hemorrhage, obstructed
labor, sepsis, eclampsia and anemia (MOH-MCH/FP 1997). Maternal health is a priority service area that
the Ministry of Health is investing its resources to try and reduce the high maternal mortality.

The Ministry of Health has finalized the definition of the essential safe motherhood packages. These
include: a) antenatal care; b) safe delivery; c) post-natal care including breast feeding; d) emergency
obstetric services such as caesarian section and incomplete abortions; e) prevention and treatment of
infections in pregnancy including sexually transmitted infections; f) information and counseling on human
sexuality and responsible parenthood and g) prevention and treatment of infertility (MOH-DHSP 1996).

Human Resources and Access to Care
The main challenge to achieving safe motherhood goals still remains access to quality care. Skilled
manpower training is a major handicap in the interim period towards implementation of the safe
motherhood program. There are inadequate trained service providers with a relative concentration at the
tertiary level of care. Untrained providers serve the rural primary health care network. Poor incentives
for rural deployment of highly skilled human resources are largely responsible for the unfavorable staffing
patterns of the primary health care network that serves the majority of the population. The salary
structure of the health care providers is the lowest in the region thus encouraging attrition to high-income
countries. The salary and benefits package for a doctor and midwife respectively are $ 2400 and $ 940
annually. Although most providers are employed by the public sector, the majority operates private-for-
profit clinical practice alongside their public roles to supplement their meager salaries.

The cornerstone in the implementation of safe motherhood intervention is midwifery skills. The Human
Resource Inventory for health services of 1996 put the total number of midwifes in Uganda at 2602.
Health care providers of all cadres are being retrained in midwifery skills and related services to
operationalize the government policy of providing integrated services (known as the ‘supermarket
approach’). The USAID-funded DISH project has pioneered the effort to train midwives in
comprehensive reproductive health that incorporates basic midwifery with management of sexually
transmitted infections, HIV counseling, family planning and post-abortion care. Nursing training institutions
are now providing comprehensive nursing training to ensure functional midwifery skills in all nursing

Pilot efforts in the area of emergency obstetric care and referral care have demonstrated the importance
of communication and ready transport/ambulance services in the reduction of maternal mortality however,
the high cost for such pilots limits the capacity to implement similar programs to scale (4).

Health Infrastructure:
About 49% of the population resides within 5Km from a health facility. This is brought about by a network
of 1,505 health facilities of which 98 are hospitals and 714 health centers (Inventory of Health Services in
Uganda, MOH 1996) Geographical access to health facilities does not however translate into service
access and utilization. For example, 33% of health facilities in the country do not provide maternity
services, and only 57 % of the hospitals are equipped to conduct general anesthesia (MOH 1996) 1. Many
families rely on self-treatment or seek services of traditional healers and traditional midwives. Whereas
nearly 90% of pregnant women make an antenatal care visit, over 64% do not benefit from a trained
assistant during childbirth (UDHS 1995). The Ministry of Health is upgrading selected health center at
each constituency level to provide essential obstetric care, cesarean section and basic emergency surgery.
In addition, the Health Sector Strategic Plan has encouraged the training of the community level providers
like the traditional birth attendants and contraceptive distribution agents to improve on the services
provided at the community level.

Financing Health Care
The most critical issue in the health sector financing is the overall level of resources (Kiyonga, 1997).
Although the health sector share of total public expenditure has grown from 6 to 8 percent of total
government budget, its contribution is less than one percent of GDP. Uganda is heavily dependent on
donor resources to finance health programs. The health sector has attracted an increasing share of total
international aid allocation to Uganda from 13 to 22 percent corresponding to US$ 60M to US $ 110M
from 1995 to 1997. The Health Financing Strategy document (1999) estimates that donors contribute 34
percent of the recurrent health budget and 82 percent of the development health budget.

The government budget allocation to health is cast within a low tax and stringent fiscal policy framework.
This limits what is possible for the public sector to do, especially in terms of salaries, supplies and drugs.
Due to largely small-scale peasant and informal sector activities, tax revenue is low and collection systems
are inefficient. In 1996/7, tax revenue was 11.8 percent of GDP. Although financing a small share of the
health services, Uganda’s growing economy and increasing revenue has allowed the government to
allocate an increasing share of its budget to health over the past five years. Central government
expenditures on health serve in a number of ways:

    1. Payment of salaries is by far the largest budget item. The Ministry of Finance and Economic
       Planning pays salaries of health workers through consolidated grants sent to the district on the
       advice of the Ministry of Public Service. The salaries are remitted to the health personnel at the
       district level through the local authority. Development grants to districts serve to finance priority
       development programs such as contraction of Health Centers Schools and providing seed monies
       for community development projects such as water and road networks (see figure 1 and 2).

    2. The Primary Health Care (PHC) grants are made to districts to finance the key program areas in
       the essential health care package of government. This grants have substantially increased in size
       over the last 5 years due to the funds made available from the poverty action fund (PAF)
       emanating from the debt relie f by multilateral and bilateral development partners to Uganda.

    3. Provision of key supplies at health facility level is another form in which government finances
       health service delivery. Through Essential Drugs Program of government, and key program
       assistance from DANIDA and UNICEF, drug kits and vaccines are delivered to the districts.
       Increasingly however, the funds to purchase essential drugs are being decentralized to the districts
       in a effort to improve logistical management and reduce stock-outs at health facilities.

The Ministry of Planning and Economic Development data shows the expenditure priority of government
in the year 1996/97 to 1998/1999. The figures 1 and 2 show a declining budget allocation to Health
services but a marked increase in the Education sector. This is mainly due to the capitalization phase of
the Universal Primary Education (UPE) Program of government that started in 1997/98. . The social
sector financing in Ugandan context includes the ministry of Gender, Youth and Community Development.
 Although relatively small allocation is going to community development, this financing option is the main
vessel for poverty alleviation activities and gender empowerment. The development expenditures, figure
2, shows a rotating priority in infrastructure development in Health Education and Community development

        Figure 1: Central Government Recurrent Expenditure on Social Sectors 1995/96 –
                      (Percentage share of total central Govt. recurrent expenditures)

                    $                                        Recurrent expenditure
                    60000                                                 10.6%
                    50000              9.7%

                    40000                            6.6%
                    30000                                             4.5%
                                              1.6%             1.4%               1.0%              0.8%
                                  1995/96             1996/97            1997/98            1998/99
                                 Health              Education               Community
                Source: Uganda Bureau of Statistics Ministry of Planning and Economic Development
                 Actual expenditures adjusted for Official USD Average exchange rate for the year.

        Figure 2: Central Government Development Expenditure on Social Sectors 1995/96 –
                      (Percentage share of total central Govt. development expenditures)

                      $ Amount ('000)                                 Development spending


                          20000                                                                                7.4%
                                                             11.6%                               7.4%
                                                                     9.9%             10.2%
                          10000        7.1%    7.8%                            5.5%
                                                      2.9%              2.1%

                                        1995/96              1996/97           1997/98               1998/99

                                      Health            Education                  Community
                 Source: Uganda Bureau of Statistics Ministry of Planning and Economic Development
                 Actual expenditures adjusted for Official USD Average exchange rate for the year.

Financing a decentralized Health system
Although decentralization of health care appears to have meant an increase in the recurrent resources
available for health services from the public budget, a study of 13 districts between 1992-3 and 1996-7,
found that two thirds of the total health spending comes from individuals’ out-of-pocket expenses. The
study found an increase in the total district health sector financing from $ 7.4 to $ 9.4 per capita from
government, donors and private out-of-pocket spending (Ministry of Health, 1997).

During the process of rolling out the decentralization process, decisions of the newly created local
government authorities did not favor allocation of funds to priority services of the central government. To
ensure that the financing priorities of the central government are met at the district, a conditional “Primary
Health Care” (PHC) grant was created in 1997/98 to ensure that primary health care financing does not
fall below the grant level. At its inception, the grant was $4.8 million, but the grant has been boosted from
the funds made available to government through the debt relief (HIPC) initiative. Although the broader
reproductive health services (including maternal services) are part of the services financed from the
Primary health grant, it is difficult to establish the extent of allocation to maternal health care. As PHC
grant increases, it is shouldering more of the recurrent costs of delivering health services through payment
of salaries of the newly recruited staff that are not on the civil service payroll (figure 1).

                 Figure 3: Trend of Primary Health Care (PHC) Grant to Districts 1997/98 – 2001/02

                   $ AMOUNT ('000)
                                                           PHC Grant-Trend

                                1997/98      1998/99   1999/00     2000/01    2001/02

Decentralization and hospital care financing
Considerable progress has been made in health sector reform in Uganda particularly with regard to
decentralization and strengthening of the planning process. Districts are responsible for all primary care
services including district hospitals – they hold recurrent budgets and employ all their staff. Although an
estimated 60-80 percent of health sector budget is spent on hospitals, public hospitals are under-funded and
this is reflected in the shortage of supplies and the low morale of health of providers. District hospitals fare
slightly better than referral hospitals (Figure 4). There is some hope for improvements in hospital-level
allocations due to the debt relief funds channel as PHC grant (Figure 3). The overall picture shows a
marginal increase in allocations to hospitals (figure 4). The population per hospital bed is about 800:1
(1996 PEAP).

                 Figure 4, Expenditure allocation per hospital bed 1999-2002

                     USD        Allocation





                               1999/00               2000/01            2001/02
                      Referal Hospital bed      District hospital Bed   FINANCIAL YEAR

There are policy proposals seeking to promote managerial autonomy in order to improve the standard of
service and improve the efficiency of public hospitals. In addition, the government intends to target the
expenditures on clinical services to cost effective interventions that constitute the minimum health care

Uganda has had a protracted debate regarding the policy of user-fees at public health facilities. When the
decentralization policy was implemented in 1993, local governments were mandated to decide on financing
options for health care in their districts. By 1997, “cost sharing” was implemented in the public health
facilities by all but two districts. MoH provided guidelines on how to manage the fees, and established a
community structure of representatives to set fees for health care services in their locality and to use the
revenues to improve the quality of services and staff morale at the site of collection. However, most
evaluation studies on user-fees in public facilities have indicated that fees contributed a small percentage
(not exceeding10%) of the recurrent costs. During the 2001 presidential campaign, all presidential
candidates were against “cost sharing” in public health facilities. A directive was made to stop cost
sharing in public facilities with effect from March 2001. The PHC grant has been increased to fill the gaps
created by the decision to abolish cost-sharing. Non-governmental health facilities were not affected by
the directive and have a long history of charging users. They recover about 50 percent of their recurrent
costs (Pearson 1997). The table below gives estimates of average price for maternal health services in
the two types of facility.

        Table 1: Average Fees for Basic Health Services
        Service                          Public Health               Non
                                         facility US $               Governmental
        OPD – Below Health center IV                    0.30         1.00
        OPD – Health center IV and                      0.60         1.50 (malaria)
        Basic laboratory service charge                 0.30         0.50
        Antenatal care visit                            0.30         0.3
        Normal delivery                                 2.00         5.50
        Family planning visit                           0.30         -
        C-section and emergency surgery                 3.00         20.50
        Non emergency (major) surgery                   6.00         30.50
        In-patient care – child (a week)                2.00         7.50
        In-patient care -adult (a week)                 3.00         15.0
        Average cost recovery                           7.0 %        45 %
        Source: MOH-Planning Dept “Cost sharing in Uganda”

In an evaluation of the impact of user fees in government health units in Uganda, Konde-Lule and Okello
(1998) concluded that user fees had had some positive impact on the quality of health care in many units.
They identified available money to rehabilitate buildings, improve supplies of drugs and other consumables,
expand the presence of health workers at health units and provide better quality of health care. Health
workers reported higher morale. Patients were less enthusiastic though some considered there were
positive outcomes including those listed above. They complained of rude staff and corruption in health units
(see the ‘Informal economy of health workers’ section below). However, few respondents to a survey
(26%) complained that fee levels were not affordable . (70% considered fees affordable).

Effect of User-fee abolition in Public Health Units

The abolition of user-fees in government health facilities was abruptly announced during the March 2001
campaigns for presidential election after the incumbent government recognized that none of the seven
manifests of the opposing candidates supported cost sharing in government facilities. The immediate result
of this decision was a surge in the OPD cases treated in government health facilities but less dramatic
changes have occurred in the institutional deliveries as reflected in the figure 5.

Figure 5: Changes in the utilization of the OPD and Delivery in Health Units in Kisoro District

                                                       Cost sharing abolished






                           Dec-00         Jan-01        Feb-01         Mar-01        Apr-01        May-01

                                                       OPD             DELIVERIES

          Source: HMIS Data Ministry of Health. Kisoro is the only district with 100% units report for the review period.

Community Social Insurance
Several pilot schemes in community health financing have been evaluated, the largest being under the
Health Financing Project supported by DFID-UK. Most of the community financing schemes have been
provider-based and (except one) linked to NGO Hospitals. The intended incentive for provider-managed
schemes was keeping the cost of care down and engaging in preventive services (health maintenance
organization model). This pilot effort enrolled already organized groups such as burial-support groups,
school pupils and staff, and micro-financing groups to minimize the selection of only the sick individuals
into the scheme (adverse selection). For the period 1995 to 2000, over 20,000 individuals were covered.
Most of the facilities chosen for the pilot were in remote areas with little alternative and or with superior
quality of care. In addition, the scheme health facilities were charging higher fees compared to public
facilities that motivated the communities to join the insurance schemes. Cost recovery was much higher
than in public facilities as reflected below:

Table 2: Cost recovery of the community health financing schemes in Uganda, 2000
Scheme Provider           Quarterly           Quarterly Value Percentage
                          Revenue (Oct-       of Services US $ Cost
                          Dec) 1999, US $                       Recovery
Kisiizi Hospital          5157.0              9115.0            57
Nyakibale Hospital        792.0               756.0             105
Bushenyi Medical center   11748.0             17820.0           66
Kitovu Hospital           1042.0              1434.0            75
Mutolere                  1378.0              2362.0            58
Isaka hospital            1590.0              8,426.0           19
Nsambya Hospital          1208.0              1710.0            71
Quarterly performance     22,915              41,623            55
Source: MOH, Output-to-Purpose Review 2000, Uganda Health Financing Project

Premiums are paid for a period of three months. A family of four persons would pay a range of US $ 5.0
to 7.0 per quarter. An additional member of the family would attract about US$ 1.0 to 1.5 additional
payment. A co-payment of US$ 0.3 is paid for ambulatory care while US$ 2.0 for admission. Most of the
schemes have included antenatal and delivery care in the services packages. Delivery service coverage is
conditional to a specified minimum of three antenatal care visits made by the mother. Other maternal
conditions such as instrumental delivery and post abortion care are not covered. On average a Cesarean
section cost between US$ 20.0 to 70.0 at the pilot hospitals. In Ishaka Hospital, the community insurance
scheme introduced a part coverage of C-sections by providing 50 percent of the hospital costs. Due to the
small number of beneficiaries, there is not enough data yet to assess the impact of the community
insurance schemes on access to health care and maternal services in particular.

The informal economy of health workers

Years of under-pay and poor regulation and supervision of the health sector resulted in widespread
involvement of public health workers in an ‘informal economy’. Many health workers routinely charged
informal user charges did not report collected formal user charge receipts, diverted drugs supplied to their
health units for other purposes, and engaged in private business outside the health facility. 56% of patients
reported paying informal charges according to Konde-Lule and Okello, (1998), A study from the mid-
1990s measured extensive involvement in all these activities. Informal charges for maternal services were
found to be high, commonly around US$5 for a normal delivery at a primary level facility, excluding
additional charges which might be levied for related services, and reaching levels as high as US$200 in
cases of obstructed labor at a district hospital, once the range of charges levied by different health
workers for different services were included. Leakage of the revenues collected through the formal user
charge system was estimated at 57% in the median facility surveyed, and leakage of the drug supply at
78% in the median facility. On average, incomes earned from private businesses were estimated at
US$1,200 for those operating private clinics, US$460 for those operating drug shops and US$122 for those
offering treatment from their own homes. These compare to a medical assistant’s monthly wage of US$50
and a nursing aide’s of US$19, at the time of the study (McPake et al., 1998). It should be noted that the
current salary levels cited earlier, though not directly comparable , indicate considerable salary
improvement since the mid-1990s, which is likely to have reduced the extent of health workers’ informal

Private sector:
In regions of the country with relatively higher incomes, the private sector has established health services
in the communities. Private midwives have setup private maternity homes in their communities with the
assistance of national and international donors who have provided them with start-up capital and
equipment. In such districts, the private midwives have provided a commendable service. However, the
private sector has witnessed a stagnation of income and has tended to avoid investment in essential but
costly care-options such as emergency surgery /Caesarian section or blood transfusion (6).

The government policy is to collaborate with the non-governmental sectors in the planning, and
implementation of sectoral programs. Hospital-based NGOs providing services in under-served areas
have been assisted with grants to make available their services to the poor as a measure of equity and
poverty alleviation (Figure 6).

Figure 6: Trend of Public Subsidies to Facility-based NGO Health Providers
  Billion Uganda Shilling






              1997/98        1998/99        1999/00   2000/01   2001/02

Source: Ministry of Health Planning Department

The above support was started as a stopgap measure in response to declining external support to NGO
hospitals. Over time, the need to elaborate specific contracts as a basis for public grants to NGOs has
surfaced. This provides an opportunity to tag public financing to incentives to improve maternal health
services, for example by ensuring fee waivers for expensive catastrophic maternal care such as C-section,
post abortion care and Infant nursery.

Attention has been paid to the unpredictability of high-risk pregnancy and the central role of trained
attendants at birth in improving maternal health outcomes. Financing is a key policy lever in ensuring that
health services in general, and maternal health services in particular, improve. The challenge is to identify
within each country context, the options available within the financing mechanisms to provide appropriate
incentives that will improve access to quality maternal health services. In Uganda, this challenge has lead
to the abolition of cost-sharing, financing the expansion of the primary health care infrastructure with
Conditional Grants with particular emphasis to making emergency obstetric care available to a defined
population of 70,000 (at the health sub-districtlevel). In addition, subsidies are given to the Hospital-based
NGO providers although this support is not tagged to specific contract, outputs or utilization incentive such
as lower charges, or fee waivers. The feasibility of community health insurance is being explored, but
owing to low-income levels and high disease burdens in communities, this option may not make a major
contribution to financing maternal health services in the medium term.

     1. Uganda Government 1996 Ministry of Health, Safe motherhood Needs Assessment Survey
     2. Ministry of Health, 1997 Health Expenditure survey in Uganda
     3. Mark Pearson 1997, Cost of hospital services, Ministry of Health
     4. UNFPA 1997, Maternal Rescuer Evaluation Project for Maternal in Iganga District Uganda.
     5. F. Ssengooba L. Atuyambe, Barbara McPake and Kara Hanson, 2001; Prospects for Public Hospital
        Autonomy in Uganda (unpublished report)
     6. F. Ssengooba 2000: Feasibility of Establishing Medical Centers of Excellence in Uganda, Uganda Investment
        Authority (unpublished report)
     7. Konde-Lule, J.K. and Okello, D. User fees in government health units in Uganda: Implementation, impact and
        scope, Partnerships for Health Reform, Abt Associates Inc., Bethesda, Maryland, June 1998
     8. McPake, B., Asiimwe, D., Mwesigye, F., Ofumbi, M., Streefland, P. and Turinde, A. (1998) The economic
        behaviour of health workers in Uganda: Implications for quality and accessibility of public health services,
        Department of Public Health and Policy, No. 27