Letters

Resource allocation in decentralized health systems

Editor – As highlighted by Andrew Green and his coworkers in relation to Balochistan, Pakistan (1), budgetary mechanisms for resource allocation are often a neglected component of policies of decentralization. This is particularly true when a single sector is decentralized. Any attempt to develop a needs-based allocation mechanism may deal with this problem to some extent, and several other measures can also be taken to help the reform attain its objectives, such as increasing community participation and setting a clear agenda for decentralization. However, technical solutions alone, in the absence of wider political commitment, may not lead to change. The experience of political decentralization in Kerala state may throw some light on this aspect.

Kerala state in south-western India has among the world’s best rates of life expectancy, infant mortality, and literacy, despite having one of the lowest per capita incomes (2). Recently, serious doubts have been raised about the sustainability of such high levels of developmental indices. Deterioration of the quality of care in public health services, high levels of morbidity, and the state’s financial crisis appear to be signs of unsustainability in the Kerala model of development (3).

The newly constituted State Planning Board decided in 1996 to initiate a political decentralization process. This included financial devolution of 40% of the state’s ninth five-year plan fund and transfer of decision-making powers to local elected bodies, which each represent an average of 20 000 population and control at least one health care facility. The transfer of responsibility for financing and planning to a politically elected administrative structure below the state level also required changes to the central and peripheral levels.

Kerala has some similarities with all four alternative allocative models suggested for Balochistan province (1). Since Kerala’s decentralization is across many sectors, allocations to local bodies were only on the basis of total population and the presence of disadvantaged communities. This is incremental in nature. However, each local body can allocate to different sectors including health, according to priorities, through a five-stage planning process that involves community representatives, bureaucrats, local-level experts, etc. At the start of the ninth five-year plan, an effort was made to identify the health needs of the local community by compiling information such as the perceived health needs of the people, local morbidity patterns, and hygiene and sanitary conditions. This information is the basis of planning for the next five years. However no formula has been developed based on the above information.

Changes in the public sector allocation to health that is expected in the ninth five-year plan compared with the eighth five-year plan are enormous: the 2.2% allocation to health is expected to increase to 5.02% (4). Moreover, increased community participation in decentralization activities is also expected to help the successful implementation of health projects. Data show that three million people participate in such activities each year.

But the reform is not without flaws, in particular due to the inability of local bodies to undertake long-term plans and difficulty in integrating local plans at the higher levels.

Joe Varghese
MPH Scholar
Achutha Menon Centre for Health Science Studies
Sree Chitra Tirunal Institute for Medical Sciences and Technology
Thiruvananthapuram 695011
Kerala, India
(email: joe@sctimst.ker.nic.in fax: 91.471.446433)

Conflicts of interest: none declared.

1. Green A et al. Resource allocation and budgetary mechanisms for decentralized health systems: experiences from Balochistan, Pakistan. Bulletin of the World Health Organization, 2000, 78: 1024–1035.

2. Franke RW, Chasin BH. Kerala state, India: radical reform as development. International Journal of Health Services, 1992, 22 (1): 139–156.

3. Nagaraj K. Decentralisation in Kerala: a note. Kerala, Research Programme on Local Level Government, 1999 (Discussion paper series).

4. State Planning Board. Health sector: a guide for planning, people’s plan campaign. Health and Family Welfare Department, Government of Kerala, 1998.